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Our briefing for Thursday, March 17, 2022:
Mar 17, 2022 2:39:44 PM
- The Omicron subvariant BA.2 now makes up nearly a quarter of all Covid-19 cases in the United States according to estimates made by the Centers for Disease Control and Prevention (CDC). While overall case numbers are down, rising case numbers in Europe and the U.K. may be foreshadowing for a spike in cases in the U.S. The subvariant, or sister variant BA.2, has shown to be more transmissible than the previous Omicron strain, BA.1, and with Covid-19 regulations being eased across the country, the new variant has some experts worried about potential outbreaks. For the week ending March 12, the BA.2 subvariant made up 23.1 per cent of new cases in the U.S., up from 13.7 per cent the week previous. In certain parts of the country, like New York and New Jersey, BA.2 makes up nearly 40 per cent of the new cases, according to CDC data. In the U.K., BA.2 now makes up the majority of new Covid cases and although it is more transmissible, the subvariant does not appear to be more deadly than its predecessor. “Although the proportion of infections with BA.2 is increasing in the U.S., Covid-19 cases are now declining, so it is likely that absolute numbers of BA.2 infections are not increasing as quickly as they might seem from just looking at the proportion that are BA.2,” said Deborah Dowell, MD, the CDC's chief medical officer for the agency's Covid-19 response.
- As of April 1, Canada will no longer require travelers to show proof of a negative Covid-19 test before entering the country. Travelers may still be selected for random PCR testing at airports and will still be required to use the ArriveCan app to show their proof of vaccination status. Currently, fully vaccinated travelers must take an antigen test administered by a health professional before crossing the border. The news comes after weeks of calls from travel and tourism groups along with mayors of certain border towns to ease the requirements. Last month, Canada lifted its advisory against non-essential foreign travel, however, the requirement to be fully vaccinated to board any air, rail or marine transport will stay in effect. Prime Minister Justin Trudeau said on Wednesday that the federal government is continually assessing border restrictions and when to ease them. “All Canadians are pretty damn tired of two years of this pandemic, and eager to get back to normal as much as possible.” Trudeau said.
- Nearly 440,000 new cases of Covid-19 were recorded in the last 7 days in the United Kingdom as travel regulations are coming to an end in the country. Several major airports, including London’s Heathrow, have dropped mask requirements in terminals, office buildings and rail stations as of Wednesday. “We’re pleased that we’re now able to move away from a mandatory requirement as society learns to live with Covid longer term,” Heathrow Chief Operating Officer Emma Gilthorpe said. “While we still recommend wearing them, we can be confident the investments we’ve made in Covid-secure measures…will continue to keep people safe while travelling.” British Airways and Virgin Airways have said they will soon follow suit and remove the mandatory mask “gradually” starting Wednesday. “For destinations where the wearing of a face covering is not mandated, our customers are able to make a personal choice,” said Jason Mahoney, British Airways' Chief Operating Officer. “And we kindly request everyone respects each other’s preferences.”
- Germany’s Covid-19 cases have hit a new record just days before most pandemic related restrictions are set to end this weekend. The country has recorded new daily highs for six days in a row as Chancellor Olaf Scholz is meeting with regional leaders to discuss pandemic strategy on Thursday. Several state premiers are openly against the scheduled reopening, despite their dissention, the lower house of parliament is expected to approve the legislation on Friday. “This is not a step-by-step process. It’s simply a leap into the unknown,” Bavaria Premier Markus Soeder said Thursday. “The health minister warns every day about new and dangerous waves and at the same time pursues the biggest easing we have ever had,” he added. “That doesn’t fit together.” Although Covid-19 restrictions in the country are set to expire on Sunday, some states including the city-state of Berlin have said they will not begin easing restrictions until the end of the month. Health Minister Karl Lauterbach has warned that the country is removing mandates too soon and said that the outbreak could “cause many deaths.” In the last 24 hours there has been more than 300,000 new confirmed cases of the virus in the country.
- New Covid-19 cases in China are trending lower today after recording record breaking numbers on Wednesday. The country saw just over 3,100 cases on Thursday, down from roughly 5,000 the day before. The northeastern province of Jilin barred its 24 million residents from leaving without notifying police in an effort to contain the largest outbreak the country has seen outside of Hong Kong. The government ordered blanket testing to be held in the province with Communist Party secretary Jing Junhai pleading with health departments to ensure “not a single person is missed.” Jilin has consistently registered over 1,000 cases a day this week, and Jing has described the regional outbreak as being at “a critical stage of the last-ditch battle.” The province has set up eight temporary hospitals with more than 10,000 beds in total and is preparing another 27,000 beds across five more emergency shelters according to state-run television on Wednesday. Volkswagen Group China, which has halted work at its production facility in Jilin’s capital city of Changchun since Monday, said it expects to resume work at the plant on Thursday. Authorities have said that current outbreak has spread to 28 regions across the country and are describing the situation as “severe and complicated.”
Covid-19 – Due Diligence And Asset Management
As Banks Get Fed Up, Lam Reviews Hong Kong’s Covid Policies
Brief: Rising frustration from the public and financial institutions is pushing a review of pandemic control measures in Hong Kong, where a suite of stark containment measures have been in place since January to fight the city’s worst-ever Covid outbreak. Chief Executive Carrie Lam pointed to the strain on residents and damage to the reputation of the once vibrant Asian financial hub for the revision, asking for a few more days before she unveils what could be sweeping changes to the city’s approach next week. “I have a very strong feeling that people’s tolerance is fading,” Lam told reporters at a briefing on Thursday. “I have a very good feeling that some of our financial institutions are losing patience about this isolated status of Hong Kong,” she said. “Nobody attaches as much importance as myself to Hong Kong’s international status.” Lam signaled a possible reduction in the amount of time new arrivals from abroad must spend in hotel quarantine and said virtually every area of her government’s approach is being scrutinized.
Hedge Funds May Be Falling Out of Favor — Again
Brief: Allocators’ interest in hedge funds may be waning. At least that’s what they told Preqin before Russia invaded Ukraine, a bloody war that has upended the country and global markets. According to research and data firm Preqin, only about 10 percent of allocators said they were “more aggressively” investing in hedge funds and accumulating assets as a result of their outlook for equity markets. In November 2020, double the proportion of investors, about 20 percent, were doing the same, up from less than 10 percent the year before. Returns may be partly to blame. The performance of the average hedge fund has declined from its peak of 18.9 percent in 2020, to 13.7 percent in 2021, according to Preqin’s latest investor outlook report. Only 49 percent of investors classified the performance of their hedge funds as acceptable last year; 28 percent said returns fell short of their expectations, according to the research firm. PivotalPath’s hedge fund composite index returned 7.9 percent in 2021.
U.S. CFTC chair says ongoing Ukraine tragedy has led to 'extreme volatility,' but markets responding well
Brief: The head of a U.S. markets regulator said on Wednesday that while U.S. markets are responding well to the ongoing tragedy in the Ukraine, the situation has resulted in ‘extreme volatility’ and record global markets trading volume. Inflation surges to 5.7%, adding pressure on Bank of Canada to accelerate rate hikes. Rostin Benham, chair of the Commodity Futures Trading Commission (CFTC), told an audience at the International Futures Industry Conference that he has tasked the agency’s surveillance unit to remain ‘surgically focused’ on analyzing trading for manipulative, inappropriate or disruptive conduct. “At my direction, CFTC staff are using every tool the agency has to ensure that commodity markets continue to fairly and transparently serve the intended price discovery and risk management function,” said Benham, adding that “markets are reacting and operating as well as anticipated given the challenging situation.”
Jefferies Sees Wall Street Talent War Riding Out Rocky Markets
Brief: Jefferies Financial Group Inc. expects Wall Street’s fierce battle for talent to continue even as the red-hot streak in global dealmaking begins to cool. “There is still tremendous demand for good talent in investment banking,” Dominic Lester, European head of investment banking at Jefferies, said in an interview. “This year’s market slowdown hasn’t had a material impact on that.” Deal values are down 10% in 2022, having fallen below year-ago levels in the week that Russia began its war in Ukraine, data compiled by Bloomberg show. Even before the invasion, the prospect of rising interest rates was threatening to derail a $5 trillion-plus run-in mergers and acquisitions that fueled more than a year of bumper fees and bonuses at the world’s biggest banks. That saw Wall Street lenders elevate pay for junior and senior dealmakers to new highs as they sought to poach stars from rivals and keep their best talent from leaving to join free-spending private equity firms. At Jefferies, which has been recruiting from the likes of Credit Suisse Group AG, Barclays Plc and Deutsche Bank AG, pay for some of the best performers has surpassed $25 million, Bloomberg reported last month. Lester said the fight to hire and retain the best bankers came down to more than money. “Of course, it’s important but you have to provide a good, dynamic culture, challenges, development and an interesting work environment to retain your team,” he said.
The Fall and Rise of Proptech Investment
Brief: The pandemic slammed proptech investment, which fell abruptly in 2020, but also changed the proptech landscape, mainly by boosting the popularity of safety tech related to the health issues. Tech innovations, impact investing and corporate social responsibility pair seamlessly with the need to increase energy efficiency, promote carbon neutrality and raise climate resilience. “Proptech is changing building and monitoring systems by creating technologies that increase efficiencies and track anomalies and waste. Beyond just ensuring buildings are run, heated and cooled more efficiently and effectively, proptech is also greening construction, while literally capturing carbon in the creation of concrete,” Dave Harris Kolada, managing partner at Greensoil PropTech Ventures, told Commercial Property Executive. “When it comes to making offices safer and complying with the litany of new laws or raising revenue from increased efficiencies, we see profits and public service as intricately intertwined, not mutually exclusive,” he added. Harris Kolada discussed the state of the proptech industry following what has been (we hope) the worst of the health crisis’ impact.
