.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line).png "CH Diligence (thicker line).png")
Our briefing for Monday, November 29, 2021:
Nov 29, 2021 3:29:25 PM
- In the United States, President Joe Biden updated the public on the country’s response to the new coronavirus variant omicron. Officials expect the variant to soon reach the United States, despite bans restricting travel from several countries in Southern Africa where it originated. Biden says the variant is “cause for concern, not a cause for panic.” The country’s top infectious disease expert, Dr. Anthony Fauci, says it will take about two weeks before more definitive data is available. “It clearly is giving indication that it has the capability of transmitting rapidly. That's the thing that's causing us now to be concerned," Fauci told NBC.
- Canada is set to make a decision on booster shots as cases of the new omicron variant begin to emerge. Experts are currently divided over whether the booster program should be expanded to more Canadians, and the omicron variant is expected to heat up that debate. The U.S., the U.K. and Israel have expanded their booster programs as a way to address their latest surges. Some provinces and territories, such as Manitoba, the Yukon and the Northwest Territories, have already expanded access to boosters, while in other parts of the country they are reserved for certain vulnerable groups and healthcare workers.
- In the United Kingdom, face masks will become mandatory indoors and on public transit as officials race to contain the spread of the new variant. So far there are two cases of omicron detected in the U.K., and they are linked to travel in South Africa. Under the new rules, everyone entering the U.K. will have to take a PCR test by the end of the second day after their arrival. Anyone in contact with a suspected omicron case will have to self-isolate, regardless of their vaccination status. The health secretary will ask advisers to consider rapidly expanding the booster program, including shortening the length of time between the second shot and the booster.
- France has postponed its mandatory vaccination requirement for healthcare workers in the French Caribbean territories of Guadeloupe and Martinique. The health ministry made the announcement on Friday, explaining that the deadline for implementing the requirement would be pushed back to December 31 to allow for more dialogue. The announcement comes after several days of widespread protests in the two territories, with reports of journalists and police officers being attacked. Protesters are against the vaccine mandate for healthcare workers which is also in place across mainland France; they are also advocating for higher salaries and lower gas prices.
- India will resume vaccine exports to the global COVAX initiative, after pausing them for nearly nine months. The Serum Institute of India, the world’s largest vaccine manufacturer, was supposed to have been COVAX’s main supplier, but they abruptly stopped shipments in April due to a major surge in coronavirus cases in the country. Serum resumed exports on Friday, with new infections in India at their lowest level in months. According to Bloomberg, exports of 5 million AstraZeneca doses were made through COVAX to Nepal, Tajikistan and Mozambique, and 20 million doses of the vaccine produced with Novavax went to Indonesia.
- New Zealand will still ease coronavirus restrictions this week, despite the threat posed by the new variant, Prime Minister Jacinda Ardern announced. From late Thursday, bars, restaurants and gyms in Auckland can reopen, ending a lockdown that has been in place since August. New Zealand will move to a traffic light system that will rate regions as either green, red or orange depending on their level of exposure to the virus and vaccination rates. Auckland will begin at red, meaning that face masks are mandatory and there are limits on gatherings. Although New Zealand restricted travel from nine South African countries in response to omicron, Ardern said she doesn’t anticipate any further restrictions. She says more evidence is needed to understand the impacts of the new variant. "It may impact on our vaccines, but it may not. It may be more severe, or it may be more mild than Delta ... we simply don’t know," Ardern said at a news conference.
Covid-19 – Due Diligence And Asset Management
Bill Ackman says the Covid omicron variant could end up being bullish for markets
Brief: Investor Bill Ackman said the new omicron variant of the coronavirus could actually give U.S. stocks a boost if symptoms turn out to be less severe. “While it is too early to have definitive data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible,” Ackman said in a tweet Sunday evening. “If this turns out to be true, this is bullish not bearish for markets.” The founder and CEO of Pershing Square Capital Management added it would be bullish for the equity market and bearish for the bond market.First detected in South Africa, the new Covid variant has now been found in more than a dozen countries, causing many to restrict travel from southern Africa. The World Health Organization labeled the omicron strain a “variant of concern” on Friday when the Dow Jones Industrial Average dropped 900 points to suffer its worst day since October 2020.
Markets Face Weeks of Uncertainty in Wait for Virus Answers
Brief: The fate of global markets now depends at least in part on laboratories around the world probing the omicron Covid-19 strain, potentially leaving investors with weeks of uncertainty in the wait for answers. The variant detected in Africa is described as highly worrying and international travel bans are proliferating. Scientists are analyzing whether it can evade inoculations and the severity of illness it causes. Vaccine maker BioNTech SE expects the first data within two weeks, initial findings that will help determine if a passing scare or bigger hit to global economic reopening looms. Reports of mild omicron cases so far brought some stability to markets Monday after a plunge in stocks and crude oil and a spike in volatility on Friday.
Goldman Outlines Scenarios for Omicron’s Impact on Global Growth
Brief: Goldman Sachs Group Inc. economists set out four scenarios for the potential impact on global economic growth from a new coronavirus variant, while adding that it’s too early to adjust their forecasts given it still isn’t clear which is likely to transpire. Downside Scenario: Omicron transmits faster than predecessor, delta. This results in first-quarter global growth slowing to a 2% quarter-on-quarter annual rate, or roughly 2.5 percentage points below Goldman’s current forecast. For 2022 as a whole, the global economy still expands by 4.2%, or 0.4 percentage points below current forecast, while the inflation outlook is “ambiguous. Severe Downside: Both the disease severity and immunity against hospitalizations are substantially worse than for delta. Global economic growth takes a more substantial hit, while “the inflation impact is again ambiguous”.
Equity hedge funds flee Covid-sensitive stocks amid fears of new surge
Brief: Long/short equity-focused hedge funds are offloading or short-selling stocks that are most exposed to tighter Covid-19 restrictions, against a backdrop of surging coronavirus infections in Europe and heightening concerns surrounding the new Omicron variant. With Covid-19 cases rising across Europe – and Germany, Denmark and Austria recently reintroducing tighter restrictions – equities-focused managers in the US and Europe have cut both their net and gross exposures in recent weeks, now converging near their long-term lows, Lyxor Asset Management observed in its latest Cross Asset Research commentary. Stock markets fell sharply towards the end of last week following the emergence of the potentially more serious Omicron strain – considered a variant of concern by the World Health Organisation - which has resulted in fresh travel restrictions and renewed restrictions in several countries.
BlackRock to Pay H.K., Singapore Staff $2,000 for Quarantine
Brief: BlackRock Inc is offering to reimburse some employees in Hong Kong and Singapore as much as $2,000 to help defray costs of hotel quarantine stays of as long as three weeks. The reimbursement is available to permanent employees in the two hubs, who are vice presidents and below and have more than 12 months of continuous service, according to an internal memo that was seen by Bloomberg News and confirmed by a spokesperson. The program, which went into effect at the beginning of November, will compensate employees 50% of the cost of hotel quarantine. A growing number of global firms in Hong Kong are helping with expenses related to hotel quarantine. JPMorgan Chase & Co. and Morgan Stanley are offering employees about $5,000 to offset quarantine costs amid growing concerns over staff retention in the financial hub.
