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Our briefing for Thursday July 8, 2021:
Jul 8, 2021 4:26:43 PM
- In the United States, health experts are concerned about the rapid spread of the delta variant, which now accounts for more than half of all new Covid-19 infections in the country. The federal government continues to push for people to get vaccinated as quickly as possible. As of Wednesday, less than half of the US population is fully vaccinated. Some experts are even concerned about potential new variants, asking whether it might be time to start testing vaccinated people just to be sure the vaccine is still effective. The US has the highest number of Covid-19 related deaths at 606,000.
- In Canada, infectious disease specialists have said a fourth wave of Covid-19 is not necessarily inevitable. Considering the UK’s current position, Canadians may be able to avoid the same as long as they continue to get their vaccines as quickly as possible. Dr. David Naylor, co-chair of Canada’s Covid-19 immunity task force, says the UK has been a good example for Canadians as they’re often a few steps ahead with infections rising and falling. Even though the UK’s vaccination program outpaced Canada’s early on, Canadians have been more cautious about waiting to lift restrictions until more people are vaccinated. “That may help us mitigate the risks of a big Delta wave,” Naylor said.
- In the United Kingdom, Prime Minister Boris Johnson continues to defend his government’s approach to easing lockdown restrictions. At the same time, Covid-19 infections are soaring, with cases exceeding 30,000 for the first time since January. Johnson says the latest wave can be attributed to the delta variant, though he also says the link between infection and serious disease and death has been “severed.” The government’s chief scientific advisor Sir Patrick Vallance is not as optimistic, saying vaccines have “weakened the link between cases and hospitalizations, but it’s a weakened link, not a broken one.”
- In Germany, calls for more creative ways to reach people who haven’t been vaccinated yet are growing. This comes as the country’s vaccination rates are beginning to ease off. Despite relatively low case numbers, the government wants people to get vaccinated because of the risks posed by the delta variant, which accounts for approximately 59% of all cases in Germany. Germany’s disease control center says 40.8% of the population is fully vaccinated, while 57.6% have received at least one shot. Health Minister Jens Spahn says the pace of vaccinations will determine whether remaining coronavirus restrictions are lifted.
- South Korea recorded its highest one-day case total of the pandemic so far, with cases reaching 1275 in a 24-hour period. This marks the second consecutive day above 1200 and breaks the previous record of 1240 set Christmas Day. More than 1000 of the infections were in the greater Seoul area. Complacency and slow vaccination rates have contributed to the growing wave of new cases in the region, which can also be linked to the delta variant. Currently only 10% of people in South Korea are fully vaccinated, while 30% have received one shot, the majority of them being over 60.
- In Australia, Sydney has recorded its highest one-day jump in Covid-19 cases in months, despite being under lockdown for nearly two weeks. Authorities extended the lockdown earlier this week as case numbers are not dropping – they have been steady at 18-35 new infections per day. The delta outbreak has caused public anger over the federal government’s slow vaccine program. Prime Minister Scott Morrison encouraged residents to get their second dose of AstraZeneca after two months rather than three, as a way to address the growing cluster of infections. Though AstraZeneca was initially recommended for all adults, it is now only recommended in Australia for adults over 60.
Covid-19 – Due Diligence And Asset Management
US jobless claims tick up to 373,000 from a pandemic low
Brief : The number of Americans filing for unemployment benefits rose slightly last week even while the economy and the job market appear to be rebounding from the coronavirus recession with sustained energy. Thursday's report from the Labor Department showed that jobless claims increased by 2,000 from the previous week to 373,000. Weekly applications, which generally track the pace of layoffs, have fallen steadily this year from more than 900,000 at the start of the year. The four-week average of applications, which smooths out week-to-week volatility, is now 394,500 — the lowest such level since the pandemic erupted in March of last year. The rollout of vaccinations is driving a potent economic recovery as businesses reopen, employers struggle to fill jobs and consumers emerge from months of lockdown to travel, shop and spend at restaurants, bars, retailers and entertainment venues.
London-based fintech firms secure record VC funding in H1 2021
Brief: London-based fintech firms have already raised more VC investment in the first six months of 2021 than any other year, according to new research from Dealroom.co and London & Partners. London’s strong performance has also helped to drive record levels of investment into Europe’s fintech sector, with European fintech firms raising USD13.9 billion, up 51 per cent on full year 2020 investment levels. London was at the heart of this growth, with its fintech firms accounting for over a third of all European fintech funding. The bumper start to the year for VC funding sees the UK capital further cement its position as a global fintech hub, with investors pumping USD5.3 billion into London-based fintech companies – an increase on all previous full year investment figures for London’s fintech sector and over 2.5 times more VC investment than any other European city. Investment into London’s fintechs in the first half of 2021 is 2.4 times greater than during the same time period in 2020, showing investor confidence returning as the UK economy starts to recover from the global pandemic. London ranks second on the worldwide list for fintech VC investment so far this year, slightly ahead of New York (USD5.2 billion) and behind San Francisco in first place (USD7.2 billion).
Job cuts not planned by most U.K. firms as furlough ends
Brief: Eight in 10 U.K. companies do not expect to make redundancies in the next three months, an indication the labor market could avoid a severe shock as government job support is wound down. The finding is contained in the latest batch of high-frequency indicators from the Office of National Statistics, which said only 1% of firms definitely planned to shed staff when they were asked late last month. Nineteen percent were not sure. The furlough program, which has paid the wages of workers at firms forced to close during the pandemic, was still supporting 2.4 million jobs at the end of May. Employers are now having to contribute to the cost ahead of the program ending altogether in September. That’s led to fears of job cuts at businesses that are continuing to struggle, despite the lifting of lockdown restrictions. The figures painted a generally upbeat picture of the labor market, with online job listings reaching 135% of pre-pandemic levels.
The Asset Management Industry Has Surpassed $100 Trillion —And There’s Still Room to Grow
Brief : Despite economic uncertainties rising from the pandemic, the asset management industry has surpassed the centi-trillion mark to reach $103 trillion in assets under management at the end of 2020, an increase of 11 percent from the previous year, according to Boston Consulting Group’s annual report on the industry expected to be released Thursday. Of the total, institutional investments represented 59 percent at $61 trillion, while retail portfolios comprised 41 percent of the global assets, or $42 trillion. North America was seen as the main driver of growth and held the lion’s share of assets at $49 trillion. As the end of the pandemic draws near and remote-working models become “permanent fixtures,” BCG called on asset managers to seek growth opportunities in private markets and data and analytics, which it said will be crucial to everything from client engagement and distribution to customized investment products.
Private equity emerges from pandemic in bullish mood
Brief: More than two-thirds (67 per cent) of private equity professionals expect to achieve higher returns this year than in 2020, with just 3 per cent expecting lower returns, according to Investec’s annual GP Trends survey. The research, which analyses the views of 219 private equity professionals around the world, reveals an industry upbeat as we emerge from the pandemic, eager to deploy capital and sanguine about the threat of SPACs. When the pandemic struck last year, GPs made significant downward adjustments to their return expectations. This year, optimism has flooded back, with the overwhelming majority (97 per cent) expecting their returns to exceed (67 per cent) or match (31 per cent) those achieved in 2020. This is especially true of smaller funds: 70 per cent of those managing funds smaller than GBP1 billion expect to improve on last year’s performance, compared to 55 per cent of those managing funds larger than GBP1 billion.
Hedge fund short sellers dented by Sainsbury’s rebound, as UK supermarket giant sees sales surge
Brief: Hedge funds betting against Sainsbury’s have taken a dent after the UK supermarket giant’s share price rose this week on the back of strong Q1 sales numbers, prompting the FTSE 100-listed firm to revise its profit outlook upwards. A number of well-known hedge funds – including BlackRock, Marshall Wace and Citadel – have built negative wagers against Sainsbury’s lately, while the likes of Pelham Capital and Third Point continue to hold longer-standing bearish bets, according to regulatory disclosures made to the FCA. The UK’s second biggest supermarket chain – which is one of the ‘Big Four’ grocers alongside Tesco, Asda, and Morrisons – has been a popular short among hedge funds over the past 18 months. Panic-buying during the initial coronavirus outbreak saw its value slide to around 179p in March 2020, and the company continued to lag competitors last summer amid warnings of increased costs, with several high-profile hedge funds - including AHL and GLG Partners, Man Group’s systematic and discretionary hedge fund units – registering short positions.
