In New Zealand the government has declared a state of national emergency which with their other legislative powers effectively enables them to run a police state to enforce the nationwide lockdown which started at midnight last night.
All hotels, clubs, bars, cafes, restaurants, schools and other educational institutions and all other businesses deemed nonessential are ordered shut. Borders are closed and international and domestic travel is severely restricted. Essential services such as supermarkets, pharmacies, hospitals remain open.
The core government message is to stay home for the next month. Police are out on the streets enforcing compliance, and the Prime Minister says that the military are on standby to assist.
PM Jacinda Adern says that the lockdown will be enforced, and people will be warned, arrested, detained and prosecuted if necessary. Parliament has been suspended for a month.
New Zealanders still overseas have been told to stay where they are and make their own arrangements: there will be no mercy flights. Every returning New Zealander currently in transit will now be screened at the airport and if they are tested symptomatic for COVID-19, they will be placed in quarantine.
New Zealand now has 205 confirmed cases of COVID-19, a ten-fold increase from 20 just a week ago. Tourists still in New Zealand are being told to stop travelling and to stay wherever they are at midnight last night, because onward travel is not being encouraged.
Meanwhile listed casino and hotel operator SkyCity has a better day with its shares rising 12 cents or 8 percent to $1.64 as the New Zealand market as a whole recovered some lost ground.
However, rating agency S&P Global Ratings has placed SkyCity on negative CreditWatch negative citing negative cashflows caused by its closure of all its businesses in Australia and New Zealand
“The extent and duration of the casino closures are uncertain and so too is the rate of earnings recovery following the closure period, S&P Global said noting that 70 percent of group earnings came from one asset, its Auckland casino.
“In our view, the group has a solid track record of prudent balance sheet management and ratings stability. The company is publicly committed to maintaining the BBB- rating, which we believe implies that it will take all reasonable actions to protect the interests of creditors.”
It still expects SkyCity’s adjusted debt-to-EBITDA to materially exceed 3.0x over the next one to two years.
S&P said SkyCity could adjust its returns to shareholder returns, sell non-core assets and change its plans for capital and operating expenditure to maintain its balance sheet.
SkyCity shares were trading at $1.64, up 12.3% today but down 59.5% this calendar year.