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Our briefing for Thursday July 15, 2021:
Jul 15, 2021 3:41:11 PM
- In the United States, President Joe Biden has kept a ban on European travellers, causing frustration among European governments. Although the U.S. eliminated most of their domestic pandemic rules, they have remained strict on international travel as they try to curb the spread of the highly infectious delta variant. According to diplomats, the Biden administration hasn’t said anything about when the rules might change. Europe already eased many restrictions for American travellers back in June. The issue will likely come up when German Chancellor Angela Merkel visits Washington on Thursday.
- In Canada, experts are left to wonder whether rising case numbers in the United States will have an impact on Canada’s border reopening. With the delta variant and slowing vaccine rates, infections in the United States have more than doubled in the past three weeks. The Canadian border remains closed to foreign travellers, with a few exceptions, until at least July 21st Prime Minister Justin Trudeau reiterated in a news conference on Wednesday that Canada would be taking a cautious approach. “The reality is we know how unbelievably costly and heartbreaking it would be to fall into a fourth wave of this pandemic. We are going to make sure that we don’t do that,” he said.
- In the United Kingdom, for the first time since January, daily Covid-19 case numbers have exceeded 40,000. As the government prepares to lift all remaining restrictions by next Monday, experts estimate that approximately a third of the population is still unprotected from getting infected. Some scientists strongly oppose the decision to unlock next week, saying the government has decided to achieve herd immunity by letting the virus infect young people, which will lead to disruptions in healthcare and education. Approximately half of the population is now fully vaccinated.
- In Japan, the Tokyo Olympics are scheduled to start in eight days, despite a surge in Covid-19 case numbers. Tokyo is under its fourth state of emergency, which began on Monday and requires restaurants and bars to close early and not serve alcohol during the Olympics. Government officials noted that the largest increase in serious cases and hospitalizations was among people in their 50s and younger who are largely unvaccinated. Athletes will be expected to put medals around their own necks to protect against the spread of coronavirus, a significant change from traditional ceremonies.
- In France, protests erupted in Paris and other cities on Wednesday over new coronavirus restrictions. On Monday the government announced mandatory vaccines for healthcare workers and plans to bring in a vaccine health pass for most public spaces. This means unvaccinated people who want to eat in restaurants will have to show proof of a negative Covid-19 test. A record number of people booked vaccine appointments following the announcement. French authorities estimated the total number of protesters at 19,000. According to an opinion poll published on Tuesday, most French people approve the new safety measures.
- Australia’s second largest city of Melbourne entered a five-day lockdown, the city’s fifth one since the pandemic began. “We must do this,” Victoria state Premier Daniel Andrews said. “You only get one chance to go hard and go fast. If you wait, if you hesitate, if you doubt, then you will always be looking back wishing you had done more earlier.” The country’s slow vaccine rollout is part of the reason why they have been particularly vulnerable to the delta variant. New Zealand has suspended a travel bubble with New South Wales and Victoria in response to the outbreak.
Covid-19 – Due Diligence And Asset Management
Wall Street Itches for Office Return as Variants Muddy Recovery
Brief : Wall Street leaders are pressing ahead with bringing employees back to the office, seeking to resume something that resembles normal work life as soon as possible, even as they keep a wary eye on Covid-19 variants. “At the beginning of Covid, in February of 2020, when I was asked how would this end up, I think I said that I felt 80% of all employee hours worked would be done in one of our offices,” said Morgan Stanley Chief Executive Officer James Gorman. “And that’s probably where it’s going to end up -- not 100% but not zero percent. ”Bank of America Corp.’s Brian Moynihan said he hopes to bring younger staff in front of their bosses soon, but the virus will dictate plans. Citigroup Inc., also watching the evolving delta variant closely, is forging ahead with its flexible approach.
Asia’s Air Travel May Take Three Years to Recover From Pandemic
Brief: Asian air travel may take another three years to recover fully from the devastation wrought by the pandemic, lagging behind rebounds in other regions and offering a stern headwind for refiners making jet fuel.It’ll take until 2024 for international air travel across the region to reach pre-virus levels, a year after global traffic hits that milestone, according to the International Air Transport Association. Similarly, consultancy Energy Aspects says jet fuel consumption will reach pre-pandemic volumes only in 2023-2024.The drawn-out timelines highlight the difficulties facing Asia and the likely consequences for jet fuel, a traditionally prized part of the oil-products market. Low rates of vaccination in many countries, the challenge posed by the fast-spreading delta variant, and persistent lockdowns have all set back the recovery even as the U.S. and Europe press on. All that means Asia’s aviation industry is unlikely to offer significant support to the region’s hard-pressed refineries, which process crude from the Middle East and elsewhere into fuels.
Two Major Pension Plans Bet Big on Return-to-Work With Co-Investment Deal
Brief: Two large pension plans are wagering that U.S.-based workers will be returning to the office following the Covid-19 pandemic. The Canada Pension Plan Investment Board and Singapore’s GIC announced Wednesday that they have partnered with Boston Properties, a publicly-traded office space developer, owner, and manager, on a $1 billion co-investment deal. Through the co-investment program, the three firms will acquire office properties in Boston, Los Angeles, New York, San Francisco, Washington, DC, and Seattle. The deal comes as office spaces begin to reopen following the pandemic. Employers remain mixed on whether office workers will ditch working from home, although major financial institutions like JPMorgan and Goldman Sachs have reportedly already encouraged employees to return.
RBC says hybrid work 'here to stay' as bank plots office return
Brief : Royal Bank of Canada is formulating hybrid, flexible work arrangements for its employees and doesn’t plan any “one-size-fits-all mandate” on how much time its staff will need to be in the offices when they reopen.“We believe that flexible and hybrid work models are here to stay, and that the role of the office has forever changed,” Chief Executive Officer Dave McKay said in a post on LinkedIn. “This means we’re going to hold onto the best of what we’ve learned over the past 18 months and recapture the best of everything we’ve missed from the pre-pandemic world.”Decisions on working arrangements will be made to match employees’ “diverse everyday experiences” and their clients’ needs, with the hope of strengthening the bank’s culture, encouraging collaboration and ensuring employees feel supported, said McKay, who oversees Canada’s second-largest lender by assets.“Over the next few months, we’ll test and learn as we go and adjust our plans along the way,” McKay, 57, said. “We need to get this right, and we’re confident that client and employee feedback will continue to inform our journey, and that ultimately we will emerge from this crisis even stronger.”
K-listed companies to double earnings - JO Hambro
Brief: JO Hambro's new UK Profit Index, showed there was a 19%, or £349bn, decline in UK plc revenue during the first year of the pandemic outbreak - April 2020 to March 2021. However, the asset manager now expects companies to return pre-pandemic levels within an additional year. Alexandra Altinger, CEO, UK, Europe and Asia, at JO Hambro, said: "After the shock of the pandemic, the change of mood in Britain's boardrooms is palpable. "The recovery is now very strong indeed: high government spending, low interest rates, strong consumer demand, resurgent employment and a buoyant housing market mean that profits are now growing very fast, much faster than market expectations."
