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Our briefing for Thursday June 17, 2021:
Jun 17, 2021 4:44:06 PM
- In the United States, the government is planning to devote $3.2 billion to advance the development of antiviral pills for COVID-19 and other dangerous viruses that could turn into pandemics. The announcement was made by Dr. Anthony Fauci, the nation’s top infectious disease expert, during a White House briefing on Thursday. The pills for COVID-19, which would be used to minimize symptoms after infection, are in development and could begin arriving by the end of 2021, pending the completion of clinical trials. Under President Donald Trump, America poured more than $19 billion into rapidly developing multiple vaccines. However, less than half that amount went toward developing new treatments, which experts emphasize the need to manage the disease in millions of Americans who may never get inoculated.
- Canada was set to receive an additional one million doses of the Moderna COVID-19 vaccine from the United States on Thursday. The delivery is part of a broad donation strategy by America and previously announced by the Biden administration. CBC is reporting while Canada’s vaccine rollout has sped up in recent weeks, it lags well behind the United States. For instance, 44% of the American population are considered fully vaccinated, compared to Canada’s 14%. American politicians are keen to see more Canadians become fully vaccinated, so that Prime Minister Justin Trudeau and his government will be motivated to move more quickly and reopen the land borders to non-essential travel.
- The United Kingdom government is considering plans to open international travel for passengers who’ve been fully inoculated against COVID-19. Under the discussed policy, the resumption of travel to more than 150 countries and territories could potentially mean that those fully vaccinated would not need to quarantine from the medium risk countries on the so-called amber list. Bloomberg is reporting upon airlines shares surging on the possible adjustment, Prime Minister Boris Johnson tried to cool their jets, so to speak, noting “absolutely no decisions” have been made. Under current rules, those who arrive in England from destinations on the amber list must quarantine at home or in the place where they are staying for 10 days and take at least two COVID-19 tests during that period.
- France has announced the easing of several COVID-19 restrictions in a surprise announcement that came on Wednesday. Prime Minister Jean Castex noted it will no longer be mandatory to wear masks outdoors and have halted an 8-month night coronavirus curfew, as of this weekend. The curfew will be lifted 10 days earlier than expected. “It’s actually improving more rapidly that we had hoped for,” Castex said. “My dear fellow citizens, I say it, I feel it: we are expecting an important moment, a happy moment of return to a form of normal life again.” Wearing a mask will remain mandatory in crowded outdoor spaces like street markets and stadiums, as well as indoor public spaces.
- In Japan, Prime Minister Yoshihide Suga announced on Thursday his government will be easing the state of emergency in Tokyo, along with six other areas starting next week. Daily cases have subsided substantially in recent weeks, allowing the government to make the move and as of Monday – new, less stringent measures will be introduced and be in place until July 11th – 12 days before the Olympics Games are set to begin in Tokyo. Prime Minister Suga also tried to reassure public health experts, noting if another surge occurs and strains hospitals, “we will quickly take action, including strengthening of the measures…”
- China is engaging in another war of words with the Western world when it comes to the origins of COVID-19. A senior Chinese epidemiologist said the United States should be priority in the next phase of investigations into the origin of COVID-19. The statement comes after the U.S. National Institutes for Health (NIH) issued a study that showed at least seven people in five different states were infected with SARS-CoV-2, the virus that causes COVID-19, weeks before the country first started reporting its official cases. Commenting on the study released on Wednesday, Chinese foreign ministry spokesman Zhao Lijian said it was now “obvious” the COVID-19 outbreak had “multiple origins” and that other countries should cooperate with the World Health Organization.
Covid-19 – Due Diligence And Asset Management
BlackRock to Allow Vaccinated Staff to Return to Office in July
Brief : BlackRock Inc. is adjusting its plans for U.S. employees to return to the office, allowing only fully-vaccinated staff to come back to work starting next month. The world’s biggest asset manager said that U.S.-based employees who’ve been inoculated against Covid-19 can resume in-person work in July and August if they’d like to, according to a memo from the New York-based company. Non-vaccinated staffers are not allowed in the office, the memo said. All employees will be required to report their vaccination status by June 30. The company said it will provide an update for non-vaccinated employees later this summer. The company already announced plans to bring employees back to the office in September while allowing some remote work. Firms across Wall Street are experimenting with how to bring back workers, with some companies -- like Goldman Sachs Group Inc. -- taking a more ambitious stance about workers coming back, and others -- like BlackRock -- pursuing a hybrid approach. BlackRock changed its policy after receiving feedback from employees who said they would feel better about returning to work if their colleagues in the office were vaccinated.
Bank of America Says All Vaccinated Staff to Return to Office in September
Brief: Bank of America Corp. expects all of its vaccinated employees to return to the office after Labor Day in early September, and will then focus on developing plans for returning unvaccinated workers to its sites. More than 70,000 of the firm’s employees have voluntarily disclosed their vaccine status to the bank, Chief Executive Officer Brian Moynihan said in a Bloomberg Television interview Thursday. The firm, which has more than 210,000 employees globally, has already invited those who have received their shots to begin returning. “Right now we’re moving people back who are vaccinated,” Moynihan said. “We’re concentrating on getting them back to work because that allows people to move about under the CDC guidelines without masks and thing like that.” Bank of America and its rivals have begun unveiling plans in recent weeks to return thousands of workers to towers in New York and elsewhere in coming months as vaccines abound across the U.S. Goldman Sachs Group Inc. asked its New York staff to begin returning this week, marking the most ambitious plan among major Wall Street firms.
Higher Barriers to Entry With Rising Competition and Regulation
Brief: Despite any headwinds caused by the pandemic, the private equity industry has remained strong, with investor demand and planned allocations continuing to grow. However, with high levels of dry powder and increasing regulator scrutiny, startup private equity funds have much to contend with. “There is currently more money available in private equity. The among of dry powder has exploded and is the highest it’s been in 10 years,” remarks Alain Kinsch, co-chairman of the Association of the Luxembourg Fund Industry (ALFI) Private Equity Committee and Vice-President of the Luxembourg Private Equity and Venture Capital Association. According to Hugh MacArthur, Partner, Bain & Co: “Total investment value last year was supported by ever-larger deals, not more deals. This fact is important because it means many GPs did not get the deals done that they had intended to in 2020. “With soaring levels of dry powder, robust credit markets and recovering economies, 2021 deal markets promise to be incredibly busy.”
Finding Value in Post-Pandemic UK Equities
Brief: If there is a prolonged shift in sentiment towards UK equities, the likelihood is that just as the negative view dragged the valuation of all companies down, so a rally in UK equities has the potential to place many stocks, good and mediocre alike, at elevated valuations. This creates a challenge for UK fund managers, as they seek to create portfolios without owning over-priced assets. Alexandra Jackson, who runs the Rathbone UK Opportunities fund, says one area to avoid at present is hospitality, despite the present good news surrounding the sector, as much uncertainty remains about the scale of future demand, particularly in London. Her view is that the valuations of many of those stocks already reflect positive news for the sector, but do not necessarily reflect the ongoing uncertainty. With this in mind, her way of gaining exposure to the reopening of the hospitality sector is via Johnson Service Group, a supplier of linen to the hospitality sector. She says the company will benefit from the cyclical recovery, but also may grow structurally in future if the public becomes more focused on hygiene issues as a result of the pandemic.
The Outlook for Asset Managers is No Longer Negative, Moody’s Says
Brief: As global asset management industry recovers from the Covid-19 pandemic, Moody’s has shifted its outlook for investment managers from negative to stable. In its June 2021 global asset management report, the credit rating company revised its outlook on the asset management industry, attributing the change to the strong market rebound after March 2020, the recovery of organic growth rates, and the resulting recovery in investor risk appetite. The report, which was published Wednesday, also noted that, as a result of strong market performance, asset managers’s revenue and profit margins have recovered from the pandemic crash. “The industry has been resilient through the pandemic,” Rory Callagy, associate managing director at Moody’s Investors Services and lead author of the study, said in an interview. “Private markets provided a lot of that support, but there are also positive trends in the operating fundamentals.” In March 2020, extreme market volatility caused assets under management to fall. Moody’s analysts had expected this decline to send reverberations through the market for the rest of the year, but by the second quarter of 2020, the equity markets had “rebounded sharply,” the report said.
