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Our briefing for Thursday, November 4, 2021:
Nov 4, 2021 4:14:58 PM
- United States President Joe Biden’s administration announced on Thursday its vaccine rule that will apply to more than 100 million American workers will need to be in place by January 4th, 2022. Private businesses with more than 100 employees, certain health care workers, and federal contractors will need to have received the necessary shots to be fully vaccinated – either two doses of Pfizer or Moderna or one dose of Johnson & Johnson’s COVID-19 vaccine. “Vaccination is the single best pathway out of the pandemic. And while I would have much preferred that requirements not become necessary, too many people remain unvaccinated for us to get out of this pandemic for good. So, I instituted requirements – and they are working,” said Biden in a statement.
- Canada’s two most populous provinces – Ontario and Quebec – have decided not to require mandatory COVID-19 vaccinations for healthcare workers. On Wednesday, the Quebec provincial government announced it would be dropping its previous announced vaccine requirement for healthcare workers and Ontario Premier Doug Ford followed suit noting that enforcing such a mandate could exacerbate a labour shortage. On Thursday, the Canadian Medical Association (CMA) responded stating it was “disappointed” that both provinces would not move forward with the mandate. “When governments are unable to adopt every health measure necessary to protect their populations during a pandemic because it will mean that current staffing shortages will worsen, it’s a mark of ongoing system failure,” CMA President Dr. Katherine Smart said in a release.
- The United Kingdom became the first country in the world on Thursday to give the green light to approve Merck & Co.’s COVID-19 antiviral pill. The approval extends the UK’s quick action on COVID-19 treatments as they were also the first western nation to give the go-ahead to the Pfizer vaccine last year. Coronavirus infections in England reached their highest level yet last month, even though hospitalizations and deaths remained low. Prime Minister Boris Johnson’s government plans to focus on antiviral treatments while rolling out booster inoculations to bolster immunity levels as the winter months approach.
- The World Health Organization (WHO) announced Thursday that Europe is facing a worrying resurgence of COVID-19 cases and is once “again at the epicenter of the pandemic.” The comments were made by Dr. Hans Kluge, the WHO’s regional director for Europe and Central Asia during a media briefing. Dr. Kluge noted last week nearly 1.8 million new cases and 24,000 deaths, which was a 6% increase in infections and 12% increase in fatalities. He also noted if the region continues this trajectory, which includes 53 countries, there could be another 500,000 COVID-19 related deaths in the region by February 2022, and that 43 of those countries could face extreme stress on their hospital capacity at some point in the same period.
- India is celebrating Diwali after having it mostly derailed last year due to the coronavirus pandemic. Diwali – known as the festival that celebrates the triumph of light over darkness – held a special significance this year as the country is reporting some of its lowest COVID-19 cases since the pandemic began. In a country of close to 1.4 billion, India is reporting just over 12,000 cases per day, its lowest active caseload in more than 250 days. However, in an address, Prime Minister Narendra Modi urged people to take precautions and be wary of COVID-19 as complacency during the festival could lead to a new rise in cases, or worse, set in motion India’s third wave of the virus.
- In Australia, New South Wales (NSW) Premier Dominic Prerottet and Victorian Premier Daniel Andrews released a joint statement on Thursday announcing the border between the two states would open to free travel. It was noted this means there will no testing or quarantine requirement for travellers entering Victoria state but people still have to obtain a permit before they arrive. For Victorians entering NSW, there are no requirements if they are fully vaccinated, unless they have been to a place of high concern in the state. In other COVID-19 related news, NSW Health Minister Brad Hazzard expressed hope that “game-changing” coronavirus vaccines could be available to children by the end of the year. Currently, about 40% of new cases in the NSW are under the age of 20 and about half of those are under the age of 10.
Covid-19 – Due Diligence And Asset Management
Canada’s Banks Get Green Light to Resume Share Buybacks, Dividend Increases
Brief: Canada’s banks will be able to resume buying back shares and increasing their dividends after regulators removed restrictions put in place to protect the financial system during the pandemic. Banks may immediately begin increasing regular dividends and executive compensation, the Office of the Superintendent of Financial Institutions, said in a statement Thursday. Subject to approval by the superintendent, they may once again repurchase their stock as well, OSFI said. The risks associated with capital distributions “have abated somewhat,” Peter Routledge, head of OSFI, said during a virtual event Thursday. “I believe that now is the time for OSFI to lift this expectation.” The move, which comes months after the Federal Reserve lifted similar constraints on U.S. firms, lets Canada’s banks start releasing the stockpile of capital they amassed to protect against a wave of pandemic-induced defaults that never occurred. Canada’s six largest banks could return a combined C$47 billion ($38 billion) in cash to shareholders and still exceed regulators’ capital requirements, according to an analysis by Bloomberg Intelligence.
PE Firm Carlyle Nears Investment in GTCR-Owned Medical Company Resonetics
Brief: Carlyle Group Inc. is in advanced discussions to invest in Resonetics, a health-care asset owned by fellow private equity firm GTCR, according to people familiar with the matter. Carlyle is in talks to buy half of Resonetics in a deal that will value the medical-device manufacturing company at about $2.3 billion, including debt, the people said, asking not be identified because the matter is private. The deal isn’t finalized and talks could still fall apart. Representatives for Carlyle and GTCR declined to comment. A representative for Resonetics didn’t respond to a request for comment. Resonetics, based in Nashua, New Hampshire, was founded in 1987 and focuses on laser technology for the life-sciences industry, according to its website. GTCR first invested in it in 2018 through its portfolio company Regatta Medical, a statement showed.
Moderna Lowers Forecast for 2021 COVID-19 Vaccine Deliveries
Brief: Moderna is scaling back expectations for the number of COVID-19 vaccine deliveries it expects to make this year and the revenue it will record from them. Issues including longer delivery lead times for exports and a temporary impact from expanding the company’s capacity to fill vials with vaccine and package them for shipping, which may shift some deliveries to early 2022, the drugmaker said Thursday. The company now expects full-year, 2021 product sales of between $15 billion and $18 billion. That’s down from a prediction for $20 billion in sales that it made in August. CEO Stephane Bancel told analysts on Thursday that his company’s issues stemmed from scaling up production so quickly. He also said the problems are short-term and can be fixed.
Manulife, Sun Life Profits Rise, as Asset Management Growth Offsets COVID, Hurricane Impact
Brief: Canada's two biggest life insurance companies, Manulife Financial and Sun Life Financial, reported a rise in third-quarter profits on Wednesday, driven by growth in new business and higher assets under management. Sun Life beat analysts' expectations, helped by a 23% surge in earnings from its asset management business that offset losses in the U.S. and Asia from COVID-related claims, but Manulife missed estimates due to weather-related charges. While the pandemic and related claims, largely outside of Canada, have weighed on parts of insurers' businesses, the growth in wealth, lifted by lockdown-induced savings and government stimulus has proved a boon for their wealth management units. Core earnings at Manulife, Canada's biggest life insurer, rose to C$1.5 billion ($1.2 billion), or 76 Canadian cents a share, in the three months ended Sept. 30, from C$1.45 billion, or 73 cents, a year earlier. Analysts had expected 79 Canadian cents.
Allocators in Asia Rethink Post-Pandemic Growth Opportunities
Brief: Since the second half of 2020, institutional investors in Asia have been changing their strategic asset allocation and shuffling their portfolios to reflect the new policies, research from Cerulli Associates shows. They’ve also been seeking investment strategies to meet what Cerulli called “pent up demand” for yield. Over the next 12 to 18 months pension funds are most interested in allocating to Asian equity, global equity, Asian high-yield bonds, global high-yield bonds, infrastructure, and hedge funds, according to a newly released Cerulli report. Triggered by the low-yield environment, asset owners and managers in Asia are going after growth opportunities using stocks as well as alternatives, including private credit, real estate, and infrastructure. About 30 percent of asset owners in the region have been looking to incorporate alternatives into their portfolio in 2021, according to data from the report. Even with the demand for alternatives, allocators in Asia also have a growing interest in passive investment strategies.
