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Our briefing for Friday, November 5, 2021:
Nov 5, 2021 4:15:26 PM
- Canada’s Chief Public Health Officer, Theresa Tam, says that while infections in the country are still above where they need to be that progress is being made. According to the most recent models from the Public Health Agency of Canada, daily Covid-19 infections are trending downwards. New daily infections have dropped to about half of where they were at the height of the fourth wave, with cases numbering around 2300 nationwide. Children aged 12 and under are now making up the majority of new cases, which has exacerbated calls to approve regulation allowing for the vaccination of children. Tam says the youth infection rate is “not unexpected,” given the “high level of vaccination in other age groups.” Children and young adults are less likely to become severely ill from Covid-19. In Canada, there has been less than 20 deaths of people under 19 since the pandemic began.
- Some areas of the United States are offering to pay children under 12 to get vaccinated against Covid-19. New York City is now offering $100 to any child willing to get their first dose of the Pfizer vaccine at municipally operated vaccination sites. Other incentives include tickets to local attractions including the Statue of Liberty or the Brooklyn Cyclones baseball games. Similarly, in Chicago, children ages 5-11 are also being offered $100 upon receiving the vaccine. In a full-court press to get more children vaccinated, the Chicago public school district is closing schools on November 12th for Vaccination Awareness Day in hopes that more children will choose to get vaccinated. The announcements come after the United States on Tuesday approved smaller doses of the vaccines to be used on children as young as 5 years old.
- Scientists across the globe are looking to the United Kingdom as a control group to indicate what the trajectory of the Covid-19 virus might look like in future. The U.K. was one of the first nations to aggressively implement mass vaccinations, however, they were also one of the first to remove emergency lockdown measures and mask mandates. From July – when emergency measures were officially lifted – to October, the U.K. has seen roughly three million cases of the virus, a number similar to what they had experienced in the year previous when lockdowns were still in place. According to Susan Butler-Wu, director of medical microbiology at the LAC+USC Medical Center in Los Angeles, California, this data suggests that vaccines alone are not enough to curb the spread of the virus altogether. Wu says that while vaccines are the most effective tool in fight against Covid-19, “we want to give them the best chance by combining them with other measures.”
- On Friday, state leaders in Western Australia announced that the strict travel measures put in place to stop the spread of Covid-19 will remain standing into the new year. As travel restrictions ease in the other parts of the country, the WA government contends that a 90 per cent vaccination rate must be hit before it will consider the reopening of state borders. Once the state reaches the 80 per cent mark, emergency measures will be relaxed and reopening of non-essential services will resume. If current vaccination rates persist, the state is forecasting to hit 80 per cent by mid-December and hopes to reach 90 per cent by January or February. Western Australia, despite its lower population, has one of the lowest vaccination rates in the country with just under 64 per cent of people having received both doses. Premier Mark McGowan said that if vaccination rates do not increase that parts of the region may have to wait even longer to have restrictions lifted.
- On Friday, French parliament adopted a bill that will see an extension of the health pass – or green pass – system continue until at least July 31st, 2022. The pass shows proof of vaccination, a negative covid test or recovery from the virus and is required to be shown for entry into non-essential public services such as restaurants and public transport. The pass, which faced staunch opposition at its induction, has now been implemented in one form or another across most European nations. It was touted as a temporary solution to a temporary problem, but as Europe faces another winter grappling with the surging virus, the vaccine passports are likely to be in place for longer than originally expected. On top of the extension of the health pass, elementary school students in France will once again be required to wear a mask while attending class. Opposition lawmakers in the country are calling the new regulations a “blank check” for the government to enact overreaching measures that infringe on individual freedom.
- Across many parts of Asia, government issued Covid-19 restrictions are beginning to ease as the surge of new cases from the Delta variant has shown signs of slowing down. In South Korea, where the vaccination rate has reached over 70 per cent of the population, nighttime curfews have been lifted and businesses are slowly returning to regular operation. Due to technologically advanced contact-tracing and rapid testing, the government is aiming to lift social distancing regulations at the end of February. As for travel, South Korea now allowing for people with important business outside the country to leave and return but has not yet stated when it will allow cross-border travel for Korean nationals who wish to go on vacation. There has also been no indication on whether the country will allow for foreign tourism once internal restrictions are fully lifted.
Covid-19 – Due Diligence And Asset Management
Globe says vax checks? Air Canada, others don't bother
Brief: The Globe and Mail reports in its Friday edition that the federal government is refusing to disclose how often the vaccination status of air travellers is being confirmed in what the Liberals billed as a broad vaccine mandate but which is so far only being enforced through random checks. The Globe's Marieke Walsh and Eric Atkins write that on Saturday, the first stage of the government's promised vaccine mandate for air travellers took effect, requiring all passengers to be either vaccinated or present a negative COVID-19 test. However, while passengers need to attest to being vaccinated, their actual vaccination status or test result is not always verified. "We made the decision to randomly check status for a short period in line with advice from the Public Health Agency of Canada. This also prevents further congestion in airports," said a Transport spokesperson. B.C. NDP MP and transport critic Taylor Bachrach said he took three flights to get home from Ottawa on Saturday without once being asked to prove he is vaccinated.
Emergent Biosolutions shares plunge by more than 38% after U.S. cancels deal with Covid vaccine maker
Brief: Emergent Biosolutions shares plunged 38.6% on Friday after the company disclosed that the federal government had canceled its multimillion-dollar contract with the Covid-19 vaccine manufacturer. Emergent, the Maryland-based company blamed in March for ruining millions of Johnson & Johnson’s Covid doses after the shots were contaminated with ingredients intended for the AstraZeneca vaccine, was awarded a $628 million U.S. government contract last year to help make the shots. An inspection by the Food and Drug Administration later found its plant in Baltimore was unsanitary and unsuitable to manufacture the shots. In a 13-page report, inspectors wrote that the facility used to manufacture the vaccine was “not maintained in a clean and sanitary condition” and was “not of suitable size, design, and location to facilitate cleaning, maintenance, and proper operations.” The U.S. would put J&J in charge of the plant and end the production of the AstraZeneca vaccine at the facility. The company will forgo $180 million due to the contract’s termination, executives told investors on a call Thursday, according to a transcript by FactSet.
HSBC Requests All of Its Hong Kong Staff to Get Vaccinated
Brief: HSBC Holdings Plc asked all of its Hong Kong staff to get vaccinated against the Covid virus after city authorities issued a new circular to push for higher inoculation rates. Colleagues who have not received a first dose should either get inoculated by Nov. 30 or submit to a Covid test every 14 days, the London-based bank, which counts Hong Kong as its largest market, said in a memo to staff seen by Bloomberg News. The memo was confirmed by a bank spokesman. The Hong Kong Monetary Authority and four other regulator issued circulars to financial institutions last week “strongly encouraging all employees to get vaccinated or undergo virus testing every two weeks,” according to HSBC. The circulars expanded on a June request that staff in client facing roles or support functions get vaccinated. Hong Kong has struggled to get its population vaccinated, lagging behind rival financial centers such as Singapore, London and New York. The city’s zero-Covid policy has been successful in keeping local cases at bay, and most businesses have been back to close to full capacity over the past months. HSBC opened its offices fully in June.
European markets close slightly higher as traders digest Covid news, U.S. jobs data
Brief: European markets closed marginally higher on Friday as investors reacted to promising news on Pfizer’s Covid-19 pill and a strong U.S. jobs report. The pan-European Stoxx 600 closed up by just 0.05% with most sectors finishing in the black. Pfizer announced Friday that its easy-to-administer Covid-19 pill, used in combination with a widely used HIV drug, cut the risk of hospitalization or death from the virus by 89% in high-risk adults. Stateside, stocks rallied to record levels on Friday after the October jobs report came in better than expected, boosting optimism about the economic recovery. Job gains for the month roared to 531,000 versus a consensus projection of 450,000. The Bank of England surprised markets on Thursday by holding interest rates at historic lows, after the U.S. Federal Reserve announced Wednesday that it will begin to curb the pace of its monthly bond-buying program “later this month.” British Airways parent IAG, Germany’s Uniper and Spain’s Amadeus were among the European companies reporting earnings before the bell on Friday. In other corporate news, UBS is set to ditch the rank of group managing director as CEO Ralph Hamers looks to streamline the Swiss lender’s management hierarchy.
Anticipating the next financial crisis
Brief: Should a public utility be compensated like a hedge fund? When the average businessperson thinks of alternative lending, the notion of direct lending platforms — business development companies, private debt funds and other specialty lenders — serving a public utility function does not likely come to mind. Ask these same people whether they believe commercial banks provide a necessary service to a modern economy, however, and one can expect nodding agreement. It is well-established among academics, policymakers and practitioners that the allocation of credit from savers to borrowers is essential financial "plumbing," directing capital to its best uses, and that regulated lenders (along with functioning capital markets) exist in order to provide this service. Since the 2008 financial crisis, a change in market architecture for the allocation of credit (particularly but not exclusively in the middle market) has occurred, with a considerable shift of market share away from traditional commercial banks to alternative lenders. This trend has accelerated further in the COVID-19 era. Preqin reported in February that fundraising for direct lending vehicles had increased 62% from January 2020; funds with direct lending investment mandates were targeting $150.3 billion as of January, compared to a target of $93 billion in January 2020.
