China’s State Assets Regulator: Impact of coronavirus outbreak on industries will mainly show in Feb

Amid risk-off at full steam in Asia, as rising coronavirus risks globally spook investors, China State‑owned Assets Supervision and Administration (SASAC), state assets regulator, Vice Chairman Ren came out on the wires, via Reuters, noting that the impact of coronavirus outbreak on industries will mainly show in February.

The scheduled production targets and reform plans of key State-owned enterprises will not be changed due to the COVID19 epidemic, he added.

SASAC’s spokesman said that they will guide centrally held firms to extend or revise contracts with some small and medium-sized firms hit hard by coronavirus epidemic.

Further Quotes:

Coronavirus outbreak has an impact on central SOEs’ overseas projects and investments.

Will strengthen health monitoring of central SOEs’ employees to be dispatched to overseas projects for coronavirus containment.

Meanwhile, China’s Trade Body noted: some customers in Russia, Turkey, the Middle East and North Africa have stopped accepting deliveries of China’s metal products amid coronavirus outbreak.

Separately, South Korea’s President Moon expressed his concerns about the virus spread, citing that the economy is in an emergency situation due to coronavirus.

Additional Comments:

The government should use all available policies to boost the local economy.

Policy support needed to boost corporate, consumer spending at home.               

FX Implications:

The demand for the higher-yielding assets is almost absent so far this Tuesday, as markets remain wary over the economic impact of the virus outbreak internationally. The virus infection rate in Japan picked up while China reported 1,886 new cases on Feb. 17^th.

Therefore, Asian stocks are in a sea of red alongside the US stock futures and Treasury yields while the safe-haven yen is gaining ground near 109.70 vs. the greenback. The Chinese proxies, the Antipodeans, are the worst-hit across the fx board, with AUD/USD down 0.40% at 0.6685 while the Kiwi attacks 0.6400.