Virus fears push stocks to 2-week low

Shares tumbled in Asian markets as China announced sharp increases in the number of people affected in an outbreak of a potentially deadly virus. (AFP)
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Updated 28 January 2020

Virus fears push stocks to 2-week low

  • China has confirmed more than 2,700 cases of the new virus, with 81 deaths. Most have been in the central city of Wuhan

LONDON: World shares slipped to their lowest in two weeks on Monday as worries grew about the economic impact of China’s spreading coronavirus, with demand spiking for safe haven assets such as Japanese yen and Treasury notes.

The death toll from the coronavirus outbreak in China rose to 106 and the virus spread to more than 10 countries, including France, Japan and the US. Some health experts questioned whether China can contain the epidemic.

By midday in London, MSCI’s All-Country World Index, which tracks shares across 47 countries, was down 0.6 percent to its lowest since Jan. 9.

In Europe, stock markets slumped at the start of trading, tracking their counterparts in Asia. The pan-European STOXX 600 index fell 2 percent to its lowest level since Jan. 6, and the Euro Stoxx 50 volatility index jumped to its highest level since December.

“The coronavirus is an economic and financial shock. The extent of that shock still needs to be assessed, but it could provide the spark for an arguably long-overdue adjustment in the capital markets,” Marc Chandler, chief market strategist at Bannockburn Securities, told clients.

In Asia, Japan’s Nikkei average slid 2 percent, the biggest one-day fall in five months. A Tokyo-listed China proxy, ChinaAMC CSI 300 index ETF, fell 2.2 percent. Many markets in Asia were closed for the Lunar New Year holiday.

US S&P 500 mini futures were last down 1.36 percent, suggesting an open in the red on Wall Street later. The VIX volatility index, also known as Wall Street’s “fear gauge,” hit its highest levels since October.

The ability of the coronavirus to spread is getting stronger and infections could continue to rise, China’s National Health Commission said on Sunday. More than 2,800 people globally have been infected.

China announced it will extend the week-long new year holiday by three days to Feb. 2 and schools will return from their break later than usual. Chinese-ruled Hong Kong said it would ban entry to people who have visited Hubei province in the past 14 days.

“While the continued spread of the virus is concerning, we were expecting that the outbreak could worsen before being brought under control,” UBS strategists wrote in a research note, adding that they expected impact on the region’s economy and risk assets to be short-lived.

“Sentiment may remain depressed in the near term, especially for those sectors most impacted, however we retain a positive outlook for emerging market stocks, including a preference for China equities within our Asia portfolios.”

MSCI’s broadest index of Asia-Pacific shares outside Japan was off 0.45 percent, although markets in China, Hong Kong, Taiwan, South Korea, Singapore and Australia were closed on Monday.

All three major Wall Street indexes closed sharply lower on Friday, with the S&P 500 seeing its biggest one-day percentage drop in over three months.

The S&P 500 lost 0.9 percent, the Dow Jones Industrial Average 0.6 percent and the Nasdaq Composite 0.9 percent. The US Centers for Disease Control and Prevention has confirmed five case of the virus on US soil.

US Treasury prices advanced, pushing down yields. The benchmark 10-year note’s yield fell to a three-and-half-month trough of 1.6030 percent. It last traded at 1.6321 percent.

Elsewhere in bonds, the Italian 10-year yield fell to a three-month low Monday after right-wing leader Matteo Salvini failed in his bid to overturn decades of leftist rule in the northern region of Emilia-Romagna on Sunday, bringing some relief to the government.

In the currency market, the Japanese yen strengthened as much as 0.5 percent to 108.73 yen per dollar, a two-and-a-half-week high.

The euro last traded unchanged to the dollar.

China’s yuan tumbled to a 2020 low, and commodity-linked currencies such as the Australian dollar fell, as growing fears about the spread of a coronavirus from China pushed investors into safe assets.

The coronavirus outbreak also pressured oil and other commodity prices.

US West Texas Intermediate crude futures plummeted 2.69 percent to a three-and-a-half-month low of $52.13. Brent shed more than 3 percent to a three-month low of $58.50 per barrel.

Spot gold rose as much as 1.0% to $1,585.80 per ounce, the highest level since Jan. 8, as the coronavirus outbreak pushed up demand for the safe-haven metal.


Finnish-style play-based learning to provide alternative to Gulf's hothouse education scene

Updated 21 February 2020

Finnish-style play-based learning to provide alternative to Gulf's hothouse education scene

  • The Finnish approach to education is grounded in the idea of providing schools with autonomy and support and giving teachers freedom
  • Finland has a national pre-primary curriculum that is focused on holistic, play-based learning and skills development

DUBAI: Finland’s school operators are capitalizing on the country’s reputation for educational excellence by establishing a foothold in the Middle East.
The Finnish approach to education is grounded in the idea of providing schools with autonomy and support and giving teachers freedom to choose how they go about their work.
It represents a stark contrast to more rigid US and British curriculum schools in the region where many expatriates send their children.
“We don’t really want to compare the Finnish education with other systems," said Jouni Kangasniemi, program director of Education Finland, in an interview with Arab News. "But it has one of the best education systems in the world and we are ready to share our ‘secrets’ openly. Finnish expertise is one of the late-comers in the market … and it is well worth exploring what kind of alternatives we have to offer. Education systems in most countries rely heavily on standardized testing and inspections. In Finland, we do not believe – nor need standardized heavy testing or school inspectors to supervise the quality of instruction.” he added.
Among the Finnish educational system’s key features is a national pre-primary curriculum that is focused on holistic, play-based learning and skills development.
“Our teachers are professionals of learning sciences and focus on helping every child flourish. The education methods are improved continuously. There is a lot of innovation happening in all our schools every day. Students learn and are happy to go to school at the same time,” said Kangasniemi.
Students start first grade education at seven-years-old compared with six for the American system and even younger for the British system where children have entered school by the time they are five.
“It is a very odd situation in an international comparison – as in many countries learning outcomes are good, but students are very stressed and tired of long school days,” Kangasniemi said.
The initial successes of Finnish schools and education providers which have established a foothold in the region do not mask the challenges they face.
Omnia Education Partnerships CEO Mervi Jansson recalls an entrepreneurial course it conducted for 130 Saudi high school students, most of whom had aspirations of careers with national oil company Aramco.
“They used to think entrepreneurship was only for those who failed university,” Jansson said. “We took the Finnish competencies and built this into a course suitable for Saudi Arabia, we localized it. We taught the Saudi teachers, we supported them and they taught the course in their own schools.”
“I think Saudi Arabia needs to look at their education strategy in terms of lifelong learning, in terms of how to provide upskilling and reskilling for a large variety of population but also to see what kind of program they should offer to the youth that is more interesting.”
Jansson was nonetheless heartened by the positive feedback from Saudi education officials and hoped the course would be “expanded into 100 Saudi schools,” plus a potential partnership in the UAE.
Meanwhile Finnish Global Education Solutions is starting the first early childhood education center in the MENA region, CEO Antti Kaskinen told Arab News.
“We cannot yet officially divulge which country it is because we want the Finnish and host country’s ministers of education to meet first, and make the partnership official,” Kaskinen said.
“We are also looking into schools and teachers’ education in Saudi Arabia. We are holding ongoing negotiations [at an early stage] and met in December concerning this. It looks quite good … by the end of this year we will have something,” Kaskinen added.
Helsinki International Schools and its Saudi partner EduGuide for Education and Training, meanwhile, signed two new agreements to open three Finnish-based schools in the Kingdom – one in Riyadh this year, and one each in Jeddah and Dammam by the end of 2021.
Other Finnish education companies are looking forward to open in the region despite tough competition, and which Education Finland’s Kangasniemi said the Nordic government is actively involved in.
“An important part of our work is to maintain a constructive dialogue between the decision makers and ministries of education both in the Gulf and in Finland, aside from providing training on cultural and business aspects in the Gulf markets,” he said.