.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line).png "CH Diligence (thicker line).png")
Our briefing for Thursday, August 5, 2021:
Aug 5, 2021 3:23:27 PM
- In the United States, the nation’s top infectious disease expert, Dr. Anthony Fauci, says coronavirus cases are expected to rise in the coming weeks. “I think you’re likely going to wind up somewhere between 100,000 and 200,000 cases,” he said in an interview published on Wednesday. According to the U.S. Centers for Disease Control and Prevention (CDC), hospitalizations and deaths are both up this week. The Biden administration continues to urge people to get vaccinated, saying the unvaccinated are largely responsible for the surge in cases. Approximately 70% of Americans have had at least one dose of vaccine.
- In Canada, the Canadian Medical Association and the Canadian Nurses Association are calling for mandatory vaccines for healthcare workers. Similar to what has happened in France, Italy and Greece, the organizations believe vaccines should be mandated for those working in healthcare in order to protect patients and the broader healthcare system. They cited the delta variant as being a cause for concern as well as plateauing vaccination rates. Healthcare workers were among the first in Canada to receive Covid-19 vaccines. The premiers of Alberta and Ontario have both said they are against mandatory shots.
- In the United Kingdom, travel rules have changed for visitors arriving in England from France. A recent loosening of restrictions now puts France in the same category as other European countries, meaning fully vaccinated travellers arriving from the nation no longer need to isolate for 10 days. Seven nations including Germany, Austria and Norway, were moved to the green list, meaning travellers don’t have to quarantine upon return. The U.K. government also eased some travel restrictions for India, Bahrain, the United Arab Emirates and Qatar. All changes will come into effect on Sunday August 8.
- In France, French President Emmanuel Macron says anti-vaccine protestors have “lost their minds.” His comments come as a third consecutive weekend of protests erupted across French cities. Demonstrators were protesting the government’s Covid-19 health pass, which will be required for access to restaurants and other indoor public spaces. In order to get the health pass, people will have to show proof of vaccination status, a negative Covid-19 test or recent recovery from Covid-19. Anti-vaccine activists maintain that the health pass is oppressive, and that vaccines have failed to prevent an outbreak of the delta variant.
- In Japan, Tokyo is reporting another record high of new cases, as the total climbed to 5,042 on Thursday. Prime Minister Yoshihide Suga says the situation has become more urgent. "We need to tackle the situation as we now have a stronger sense of urgency," he told reporters. "The infections are expanding at the pace we have never experienced before." Tokyo remains under a state of emergency and will until the end of August. Suga and Olympics organizers have both already said there is no link between the games and the surge in cases.
- In Australia, Melbourne announced it will enter another lockdown, only one week after lifting restrictions. Victoria state Premier Daniel Andrews made the announcement on Thursday, blaming the nation’s slow vaccine rollout for the decision. "To be really frank, we don't have enough people that have been vaccinated and, therefore, this is the only option available to us," Andrews said. "The time will come when we have many more options. But that isn't now." As of Wednesday only about 20% of Australians are fully vaccinated.
Covid-19 – Due Diligence And Asset Management
Investors Bet $53 Billion That U.S. Rents Will Push Even Higher
Brief: There’s more money than ever betting that apartment rents are heading to new heights. Investors spent $53 billion on multifamily real estate during in the three months ending in June, the most ever for the second quarter, according to data from Real Capital Analytics. The spree extended a busy year for apartment investors that has included purchases by Blackstone Group Inc. and Starwood Capital Group. It was also fueled by real estate money moving to housing from offices, hotels and malls, which have fared poorly in the pandemic. The influx of money has pushed prices higher and forced private equity firms to behave like the aggressive homebuyers in the frenzied housing market. Some investors are frustrated by current prices for apartment buildings. But many are raising their bids, waiving inspections and promising to close fast, with rising rents driving a flurry of deals.
Tech’s pandemic boom is coming to an end
Brief: The Covid boom times are coming to an end for tech companies. After reporting eye-popping growth throughout 2020 as more people turned to technology to work and play during pandemic lockdowns, companies from Apple to Roku are now warning the party is just about over. In general, tech companies beat earnings expectations for the second quarter, but investors still punished shares following weaker than expected guidance for the current quarter. Google’s parent company Alphabet was the most notable exception, however. To be clear, the biggest tech companies still expect to show nice growth in the third quarter, but warned they have lapped the hyper growth they saw last year. And it all appears to be a result of people turning away from tech and getting back out into the real world as the economy opens up and more folks get vaccinated.
Real estate sees rebounding public pension investments in Q2
Brief: Public plans tracked by eVestment reported 109 commitments to private markets real estate investments totalling USD7.5 billion in 2Q, a 9.5 per cent increase from the previous quarter, according to the just-released June 2021 Private Markets Monitor. Average commitment size also increased to USD68 million from USD64 million. These 2Q 2021 real estate commitments still represent a drop of 10.1 per cent compared to 2Q 2020, as some of the most severe months of the pandemic unfolded and the extent of the disruption in the current and future state of the real estate business was unknown. But the rebound in Q2 2021 reflects an overall strengthening of and confidence in real estate as an investment as normal work, shopping and entertainment activities resume.
Johnson Calls for Investment Big Bang in U.K. to Drive Recovery
Brief: U.K. Prime Minister Boris Johnson issued a rallying cry for the nation’s institutional investors to plow money into British companies and create a “big bang” that powers a recovery from the pandemic. In a joint letter with Chancellor of the Exchequer Rishi Sunak, Johnson called for “hundreds of billions of pounds” to be unleashed into longer-term U.K. assets, including “pioneering firms and infrastructure.” That would help secure better retirements for pensioners and support an “innovative, greener future,” he said. The language evokes the “Big Bang” of the 1980s, when Margaret Thatcher’s liberalization of finance made London the unrivaled financial hub of Europe. It’s also Johnson’s answer to criticism that his plans to bridge income gaps between London and the rest of the nation are too vague. Relying on investors would avoid further strain on the Treasury, which borrowed at record rates during the Covid-19 pandemic.
Emerging Markets Hardest Hit by China Crackdown, Virus Outbreaks
Brief: Increased investor concerns about China and a widening vaccination gap will keep pressure on emerging-market assets relative to their developed peers, according to some market participants. China’s sweeping clampdown of its technology sector at a time when its economy is slowing has helped push a global gauge of emerging-market shares to a 17-year relative low against their developed-market peers. The spread of coronavirus variants has also weighed, with vaccine rollouts in developing nations lagging those in the likes of North America and Europe. U.S. and European stock markets are expected to continue to outperform, as advanced economies rebound, travel resumes and vaccinations creep closer to herd immunity.
