If you’re selling masks, Hong Kong is buying.
Specifically, the government has “procured” five million for hospitals and public institutions, and purchased another eight million on top of that for the retail market, Chief Secretary Matthew Cheung said, at a briefing Thursday.
In addition to those 13 million masks, the city is arranging to buy another 24 million, and a mask factory at Hong Kong’s correctional institution is set to work around the clock to churn out still more protective gear.
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That’s a lot of masks. And it underscores the fact that the coronavirus crisis has escalated into something approximating a full-blown panic. China has now reported 7,711 confirmed cases. 170 people are dead. The outbreak has also spread to India.
Asian stocks recoiled on Thursday, with Taiwan suffering a grievous body blow after reopening following the holiday. The Taiex closed down 5.8%. That, folks, is the largest one-day drop since October of 2018, and may well have been the second-worst drop since the crisis.
TSMC dove 5% and Hon Hai dropped 10%. Turnover was the highest in a dozen years, apparently.
That may well approximate the kind of plunge you can expect when mainland markets reopen after the break.
Other regional markets fell in sympathy. The Hang Seng’s two-day slump coming off the holiday is now in excess of 5%.
Japanese stocks dove 1.7%, bringing the loss for the week to 3.6%. The Nikkei is now sitting at the lowest since November 1.
“We recently had a run-up in IT-related shares and now investors are taking profits”, Takashi Hiroki, chief strategist at Monex Securities in Tokyo, fecklessly remarked. “The impact of this virus has not been fully priced in”.
Apparently not, Takashi.
Meanwhile, the offshore yuan fell through 7 again. It’s now down some 1% since the mainland market closed for the holiday and the PBoC is going to have some catching up do when it comes to managing things.
We’re now a long way from the last onshore quotes from January 23.
“There have only been a few periods when the gap between USD/CNH and USD/CNY exceeded 10 handles since 2010”, Bloomberg’s Mark Cranfield wrote earlier this week. “The implication [is] that the 7.03 area could be where relative value players take a more favorable view of the yuan [but] in more extreme scenarios, the December 3 high at 7.0870 may come into view”, he added.
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