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Our briefing for Wednesday July 7, 2021:
Jul 7, 2021 3:32:11 PM
- In the United States, new data from the Centres for Disease Control and Prevention shows the delta variant is now the dominant strain of coronavirus in the United States. The World Health Organization said Tuesday that the delta variant is predicted to become the dominant variant globally. US President Joe Biden said the rise in delta variant cases “should cause everybody to think twice.” He encouraged all Americans to protect themselves by getting vaccinated when speaking at the White House on Tuesday. He also said the White House is working closely with state and local partners to support vaccine drives in communities where the uptake has been slow.
- In Canada, Prime Minister Justin Trudeau is facing increased pressure to ease travel restrictions across the Canada-United States border. Now that vaccine rates are soaring and case numbers are dropping, border communities, industry groups and long-separated families are criticizing Canadian officials for not at least laying out a detailed reopening plan. Earlier, Trudeau said that restrictions would ease after 75% of Canadians had received one dose of vaccine and 20% were fully vaccinated. But Canada had already achieved that goal before the border closure was extended to July 21st.
- In the United Kingdom, coronavirus case numbers are on the rise. Britain reported 28,773 new cases on Tuesday, up from 27, 334 on Monday and the highest number since January 29th. Health Minister Sajid Javid said Britain is entering “uncharted territory” with their decision to scrap lockdown rules on July 19th. Javid told MPs that modelling suggests case counts could reach as high as 100,000 per day later on in the summer. Javid says these numbers won’t overwhelm the healthcare system because the vaccine program has created a “wall” against mass illness and deaths.
- In Japan, Tokyo reported 920 new coronavirus cases, the highest since mid-May. Prime Minister Yoshihide Suga says he will consult with a panel of experts before making a final decision on Thursday over whether to extend a state of emergency. An extended state of emergency in Tokyo ahead of the Olympic games will determine whether spectators can attend Olympic events. Medical experts have previously recommended having no spectators as it is the least risky option. Organizers have already banned spectators from overseas and put a cap in place for domestic spectators at 50% capacity.
- In New Zealand, medical regulators have approved use of the Johnson & Johnson coronavirus vaccine, although the country will still focus primarily on using Pfizer. Prime Minister Jacinda Ardern has said the country will not follow the UK’s lead of “living with” the virus, explaining that the level of death proposed by Boris Johnson would be “unacceptable.” New Zealand may even consider putting Britain on a no-fly list if case numbers get out of control. “The priority for me is how do we continue to preserve what New Zealand has managed to gain and give ourselves options, because this virus is not done with the world yet,” Ardern said.
- Australia has extended a two-week lockdown in Sydney for another week. Health officials have said the extension happened largely because vaccine rates aren’t where they’re supposed to be. Currently only about 9% of adults in Australia are fully vaccinated. Gladys Berejiklian, the Premier of New South Wales, said the extension was the only way to prevent future lockdowns, until the vast majority of citizens are vaccinated. Sydney and its surrounding communities are the only part of Australia still in lockdown. Sydney residents were warned by health officials that case numbers are expected to rise in the next 24 hours and urged to stay at home.
Covid-19 – Due Diligence And Asset Management
KKR Breaks Its Loan Record With Property Market ‘Roaring Back’
Brief : KKR & Co. has committed to $8 billion in commercial-property loans so far in 2021, more than double its previous full-year record, as the pandemic reopening stokes demand for financing. “The market is just roaring back from a volume perspective,” Matt Salem, KKR’s head of real estate credit, said in an interview. “Pipelines are very big across the board.” Demand for new loans has revived as construction picks up, debt matures and low interest rates spur refinancing on favorable terms. Total debt on U.S. commercial and multifamily properties increased to $3.93 trillion as of March 31, up 1.1% in the first three months of this year, according to the Mortgage Bankers Association. That growth continued as trillions of dollars in stimulus money flowed into the economy and vaccination campaigns fueled a revival of commerce and real estate investors’ appetites for risk.
ESG criteria crucial for outperformance and resilience – especially in crisis year 2020, says LFDE
Brief: ESG criteria is an outperformance factor and an essential prerequisite for companies' resistance to crises, according to the latest "SRI & Performance Study by LFDE," conducted by French asset manager La Financière de l'Echiquier (LFDE) for the third consecutive year. "The exceptional year of 2020 in particular, with its rapid market collapse and equally rapid recovery, has shown how resilient SRI investments are during crises," says Coline Pavot, Head of SRI Research at LFDE. During 2020, the portfolio with the best ESG scores (Top 40) posted a 15 per cent return, outperforming the portfolio with the worst ESG scores (Flop 40) by a factor of 68. At the same time, the MSCI Europe SRI Index (+1.4 per cent) outperformed the Flop 40 portfolio (0.2 per cent) and the MSCI Europe Index (-3.32 per cent).
Office workers fled Toronto's financial district — but they'll be back, Metrolinx CEO says
Brief: Toronto’s financial district has been quiet ever since banks sent their employees home at the beginning of the coronavirus pandemic. That may be about to change. New cases of COVID-19 are down more than 95 per cent in Toronto compared with three months ago. About half of adults there are now fully vaccinated, and schools are preparing to reopen in two months. To Phil Verster, the chief executive officer of Metrolinx, the agency that runs commuter rail and bus service in Canada’s largest metropolitan area, that means many workers will go back to the office at least part of the time. “I am very optimistic that we are going to see a resurgence of travel — very much so starting in September and October,” Verster said in an interview, noting that he sends out Metrolinx staff to speak with business leaders about how their return-to-office plans are evolving. “What we’ve seen in our ridership is that considerations about whether children can go back to school or not are critical.”
Covid-19 Pushed 22 Million Out of Job Market in Major Economies
Brief : Labor markets in developed nations have recovered only half of the loss of employment they suffered in the pandemic, with the young and low-skilled hurt most. That’s the conclusion of a 400-page study by the Organization for Economic Cooperation and Development, which found that about 22 million jobs disappeared by the end of 2020 in industrial nations. The Paris-based institution said a full recovery to pre-pandemic levels of employment won’t come until the end of next year. The findings indicate that the coronavirus crisis accelerated a number of trends that started over the past decade, including growing income inequality, a shift toward more technically demanding jobs and fewer secure employment opportunities for lower-skilled workers. “Failing to address inequality and exclusion now is likely to result not only in deeper social divisions but will have negative ramifications for productivity and economic recovery,” said Stefano Scarpetta, the OECD’s director for employment, labor and social affairs.
Digital Health Startups Raised $14.7 Billion In First Half Of 2021, Already Surpassing Total 2020 Funding
Brief: Digital health funding continues to smash new records each quarter, as venture-backed companies raised $14.7 billion in the first half of the year. That sum already surpasses the total venture funding raised in all of 2020, according to a new report from venture firm Rock Health. The Covid-19 pandemic has fueled the adoption of new digital health technologies, which already set an all-time high venture funding record of $6.7 billion in the first quarter of 2021. Rock Health’s CEO Bill Evans says that while even he was a bit surprised by such a huge increase compared to last year, the fundamentals checked out. “We saw pace increase and size per round increase,” says Evans. This translated to an average of 11 digital health deals totaling $548 million each week in the first six months of the year, compared to an average of 7 deals totaling $285 million in the second half of 2020
Hedge Fund Optimism Is Rising as Managers Deliver Their Best Performance in Years
Brief: Hedge fund managers have grown even more optimistic about their business prospects over the next 12 months.On a scale ranging from -50 to +50, hedge funds rated their economic confidence at +19.5, up from an average of +18.4 the previous quarter, according to the second quarter Hedge Fund Confidence Index from AIMA, Simmons & Simmons, and Seward & Kissel. Confidence is also up significantly from +13.8 in the fourth quarter, according to the index.In a survey of more than 300 hedge funds around the world accounting for approximately $1 trillion in assets, respondents were asked to consider three factors for determining their outlook: “their firm’s ability to raise capital, their firm’s ability to generate revenue and manage costs, and the overall performance of their fund(s).”
