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Our briefing for Wednesday, October 20, 2021:
Oct 20, 2021 4:05:19 PM
- In the United States, the Food and Drug Administration (FDA) is set to make a call on mix and match vaccine doses. The announcement is expected to come as part of the authorization of booster doses for some Moderna recipients and Johnson & Johnson recipients. The authorization will mean people can get a different vaccine booster than the one they were initially administered. As the Washington Post reports, it is likely that the FDA will also say that people should stick to their same vaccines where possible. Last week the FDA looked at data from the National Institutes of Health as well as evidence from the European Union and the U.K., though officials have said the research on mixing vaccines is limited.
- In Canada, the province of Ontario is set to start vaccinating those ages five to 11, once the vaccines are approved for children in Canada. The province’s health minister made the announcement on Tuesday, explaining that the ministry is currently reviewing plans submitted by the province’s public health units. "By the time the vaccine is approved for youth by Health Canada, we will be ready to go," Health Minister Christine Elliott said at a news conference. "I know that parents are concerned about this, but they need not be." Pfizer has officially asked Health Canada for approval of its vaccine for children ages five to 11.
- In the United Kingdom, experts are closely monitoring a new mutation of the delta variant that was detected in July. Official data from the U.K.’s Health Security Agency shows that the new variant accounts for about 6% of all coronavirus cases. The new variant, known as AY.4.2, or delta plus as some are calling it, contains some mutations that could help it enter cells. Experts say it is not yet a variant of concern, and it is unlikely to evade vaccine protection. Currently there is no evidence to indicate the new variant is more transmissible than delta, but this is an area where scientists are still studying.
- In Brazil, a new report from the senate has recommended that President Jair Bolsonaro should face criminal charges over his handling of the Covid-19 pandemic. The 1200-page report, which was reviewed by the Associated Press on Tuesday, recommends the president should be indicted on 11 charges, including charlatanism, inciting crime up to homicide and genocide of the Indigenous community. The document still has to be reviewed and voted on by the senate committee and could still be altered or vetoed. The prosecutor general would then have to decide whether to investigate and bring about any charges. Bolsonaro denies the allegations and says the report is a political weapon designed to sabotage him.
- India will remove the retaliatory measures it placed on the U.K. for travellers wishing to enter the country. Those travelling to India from the U.K. will now only need to home quarantine for seven days and take Covid-19 tests. Tensions rose between the two countries after the U.K. failed to recognize Covishield, the made-in-India version of the AstraZeneca vaccine, as a valid vaccine for entry into the country. The U.K. has since designated Covishield as an approved jab, but it took them a few more weeks to add India to its list of countries exempt from quarantine.
- Australia’s state of Victoria will not open for unvaccinated people until well into 2022, the state premier said. Premier Daniel Andrews made the announcement on Tuesday as the state recorded 1749 new Covid-19 cases and 11 new deaths. Andrews said the state would take a different approach than New South Wales, which is set to ease restrictions for the unvaccinated on December 1. “That doesn’t make any sense to me in any event and we won’t be doing that here,” he said. Andrews also said the state will require proof of vaccination even once the restrictions have eased.
Covid-19 – Due Diligence And Asset Management
Pimco Warns Uncertainty Set to Crimp Returns on Bonds and Stocks
Brief: If you think financial markets have been strange the past 18 months, just wait. What lies ahead is an unfamiliar macroeconomic environment that’s undergoing dramatic changes, says Pacific Investment Management Co. The firm released a report Wednesday warning that over the next five years the global economy will see “a more uncertain and uneven growth and inflation environment with plenty of pitfalls for policymakers.” Higher macroeconomic and market volatility will likely mean lower returns across fixed-income and equity markets, according to the manager, which oversees around $2.2 trillion in assets. But while overall capital market returns will likely be lower, increased volatility should spell opportunity for active fund managers, wrote Pimco. Markets are already bracing for the prospect that major central banks will soon begin withdrawing the emergency support provided during the Covid pandemic, with the Federal Reserve widely expected to start dialing back asset-buying next month, while inflation risks remain a major source of disquiet.
Climate change needs to be tackled like COVID-19, says Blackrock boss
Brief: The chief executive of the world’s largest asset manager has called on governments globally to treat climate change with the same urgency as COVID-19 by supporting private capital investment in new technologies, but warned capitalism alone could not solve this crisis. BlackRock chief executive Larry Fink, who oversees around $10 trillion globally, said the pandemic had shown technologies can be developed quickly once the world recognises there is an “existential crisis”.However, Mr Fink said capitalism had fallen short in its pandemic response with large swathes of the emerging world struggling with very low vaccination rates, which could allow the virus to mutate. “We did not have the resolve to invest in the manufacturing, so we could get the whole world vaccinated, so we don’t have to worry about the next variant and the next variant and the next variant,” Mr Fink said during an online sustainability forum hosted by Credit Suisse.
Real estate investment managers experience mixed recovery from Covid-19
Brief: The 2021 Global Management Survey, published by NAREIM, INREV and Ferguson Partners, paints a varied picture of real estate investment managers’ recovery from Covid-19. In terms of 2020 financial performance, 38 per cent of respondents recorded a 10 per cent increase in EBITDA, while 32 per cent reported a 10 per cent drop. The median firm in the survey recorded net AUM growth of 6 per cent. While still positive, this reflects the first year of slowing growth since 2016. The survey reports 29 per cent of respondents recording a year-on-year fall in AUM – up from 21 per cent in 2019.Unsurprisingly, employee numbers were impacted during the pandemic. In 2020, headcount either fell or stayed the same for 42 per cent of respondents, versus 26 per cent in 2019; and the number of investment managers who decreased headcount grew from 17 per cent to 27 per cent over the same period.
The Great Retail Reset
Brief: In 2018, Blackstone became the U.K.’s largest small-business landlord. That year, Blackstone partnered with the U.K.’s largest privately owned property company, Telereal Trillium, to buy an entire portfolio of commercial real estate off British government-owned Network Rail. It seemed like a good investment: Network Rail, swimming in £46.5 billion ($63.9 billion) in debts, had delayed £162 million in investment in the portfolio. Tenants — thousands of them, renting sometimes damp, sometimes noisy railway arches for businesses including bakeries, hair salons, and car garages — were long overdue for structural inspections to make sure the trains could still run safely overhead. And because Network Rail still owned the tracks, the British taxpayer would foot the bill to inspect and maintain the structures, while Blackstone could focus on filling empty arches and revaluing tenanted ones.
United Airlines Posts Smaller Loss After Variant Wrecks Profit Plan
Brief: United Airlines Holdings Inc. posted a narrower loss than analysts had expected as a dip in demand from a summer surge in the coronavirus delta variant proved fleeting. The carrier lost $1.02 per share, or $300 million, in the third quarter on an adjusted pretax basis, better than the $1.61 loss analysts had estimated, according to figures compiled by Bloomberg. United shares rose 1.4% in trading after the market close. The stock has gained 6.9% this year through the end of trading Tuesday. Pandemic-driven losses persisted for a seventh quarter at United, which as recently as July had predicted a profit for the latter half of 2021 based on strong demand from leisure travelers and a gradual return of corporate road warriors. But that was before a summer wave of Covid-19 infections and hospitalizations caused an industrywide sales slowdown. United had warned investors Sept. 9 that its planned profit would turn into red ink due to this change in business conditions.
