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Covid-19 Diligence Briefing

Our briefing for Tuesday, November 30, 2021:

  • The chairman of the United States’ Federal Reserve, Jerome Powell, said on Tuesday that the country’s economy will be negatively affected by new Covid-19 variant. “The recent rise in Covid-19 cases and the emergence of the omicron variant pose downside risks to employment and economic activity and increased uncertainty for inflation.” Powell continued to suggest that “greater concerns about the virus” could also negatively impact labor shortages and supply chains issues already plaguing the nation. Vaccine maker, Moderna, also made an announcement on Tuesday that its vaccine could be less effective at combating the omicron variant. “I think it’s going to be a material drop. I just don’t know how much because we need to wait for the data,” said Stéphane Bancel, Moderna’s chief executive. “But all the scientists I’ve talked to … [say] ‘this is not going to be good’.”

  • Canada is considering tightening its border restrictions until the threat from the omicron variant is better understood. Prime Minister Justin Trudeau told reporters on Tuesday that “even though Canada has very strong border measures now — we need vaccinations to come to Canada, we need pre-departure tests, we do testing on arrival,” he added that “obviously, we’re watching very, very closely the situation with omicron.” On Friday the government prohibited travelers from several African nations including South Africa, Mozambique, Namibia, and Zimbabwe from entering the country. The omicron variant was first detected in the continent last week. The World Health Organization says that the risk from the omicron variant is “very high” and early reports are suggesting that it may be more contagious than previous variants.

  • Every adult in the United Kingdom will be able to book a booster shot by the end of January according to British Prime Minister Boris Johnson. While all adults will soon be eligible, Johnson has advised against younger people attempting to book a third dose of the vaccine as there is not currently a large enough supply. “As with the first jabs, we’ll be working through people by age group,” Johnson said, “going down in five-year age bands, because it’s vital that the older and more clinically vulnerable get that added protection first.” The U.K. is ramping up its vaccine effort as news of the omicron variant has sparked concerns worldwide. “Please don’t try and book until the NHS says it’s your turn,” Johnson warned. The U.K. has already administered nearly 18 million doses of the booster shot, “but we’ve got millions more to do to protect the most vulnerable.” Johnson said.

  • The incoming vice chancellor of Germany has called for stricter restrictions for unvaccinated people in the country ahead of the transition of power. The current co-leader of the Green party Robert Habeck said that only those who have recovered from the virus or have had both doses of an approved vaccine should be allowed to enter “public settings” or use non-essential services. “We will need to face the winter with further coordinated measures,” Habeck said in a recent television interview. A sharp rise in cases and the transition to a new government has complicated efforts to curb the virus as Germany enters the winter flu season. On Tuesday, the Constitutional Court ruled against stricter lockdown restrictions in the country, despite the ongoing struggle in containing the surging case load. Helge Braun, the current chancellery minister has already proposed closing hard hit areas such as bars and leisure venues, in hopes that the new government may take action once they assume power.

  • China has announced a major effort to offer humanitarian aid to African countries to help the continent recover from the effects of the Covid-19 pandemic. President Xi Jinping has said the country will donate a billion Covid-19 vaccines, write off interest-free loans and inject billions of dollars to the economy to spur trade and infrastructure investments. China hopes that the vaccines will cover at least 60 per cent of the continent’s population by next year. While 600 million vaccines will be donated directly, the remainder will be produced in a joint effort from African countries in partnership with Chinese companies. China also intends to send several medical teams to the continent to help alleviate the pressure currently facing doctors in many African nations. The World Health Organization estimates that only 7 per cent of Africa’s population have been vaccinated due to limited vaccination services in rural areas and general hesitancy relating to the vaccines.

Covid-19 – Due Diligence And Asset Management

JPMorgan: Omicron Will Have a ‘Diminishing Impact’ on the Economy

Brief: Despite increased market volatility following the news that the Omicron virus variant appears to be spreading, its impact on the economy is likely to be less profound than that of its predecessors, according to J.P. Morgan Asset Management. David Kelly, chief global strategist at J.P. Morgan Asset Management, wrote in his weekly note that the “pandemic waves should have a diminishing impact on the economy” as people adapt to the new normal. He predicted that except for travel and entertainment, which heavily depend on in-person interactions, other sectors would see limited disruption. “Many people have simply mentally moved on from the pandemic and will not accept further restrictions on their activities,” Kelly wrote. “Others have adapted their lifestyles to be very efficient even in pandemic conditions, [by] conducting business over Zoom, buying online, and wearing masks into grocery stores.”

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Equity hedge funds flee Covid-sensitive stocks amid fears of new surge

Brief: Long/short equity-focused hedge funds are offloading or short-selling stocks that are most exposed to tighter Covid-19 restrictions, against a backdrop of surging coronavirus infections in Europe and heightening concerns surrounding the new Omicron variant. With Covid-19 cases rising across Europe – and Germany, Denmark and Austria recently reintroducing tighter restrictions – equities-focused managers in the US and Europe have cut both their net and gross exposures in recent weeks, now converging near their long-term lows, Lyxor Asset Management observed in its latest Cross Asset Research commentary. Stock markets fell sharply towards the end of last week following the emergence of the potentially more serious Omicron strain – considered a variant of concern by the World Health Organisation - which has resulted in fresh travel restrictions and renewed restrictions in several countries.

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How the Omicron Variant Could Impact Your Investments

Brief: If the Omicron variant of the coronavirus has you worrying about your investment portfolio, you’re probably not alone. The World Health Organization (WHO) says the new variant, which was first detected in South Africa in November, is likely to spread internationally and poses a “very high” global risk. That could mean future surges of COVID-19, with “severe consequences” in some areas, the WHO said in a brief. As we’ve seen in the past, surging COVID-19 cases can impact the market. When the virus first hit the U.S. in March of 2020, the S&P 500 — a benchmark commonly used to measure the strength of the overall stock market — dropped more than 30% between February and March. Since then, there has been a close relationship between which investments do well across all financial markets and whether virus cases are trending up or down. (For example, “defensive stocks” like water, gas and electric utilities tend to do well when cases are rising, since investors move towards investments with less market volatility during uncertain times.) On Friday, the Dow Jones Industrial Average had its worst day of the year as investors, and the S&P 500 and Nasdaq Composite slipped as investors got spooked by the Omicron variant. While stocks rebounded Monday, there’s no way to say for sure how much the new variant will continue to impact the market.

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North American stock markets rebound on hopes COVID variant not too severe

Brief: North American stock markets partially recovered from Friday's steep plunge as crude oil prices rebounded on hopes that the latest COVID variant won't result in new lockdowns. Markets suffered their worst day in more than a year to end last week with each losing at least two per cent on worries about the Omicron COVID-19 variant. News over the weekend that the first cases seemed to induce only mild infection gave investors a sense of comfort and saw risk appetite revive itself somewhat, said Candice Bangsund, portfolio manager for Fiera Capital. "It's still very preliminary and it's going to take a few weeks for scientists and for the population in general to see the severity and transmissibility of this strain," she said in an interview. "Markets are likely to trade in a choppy and uneven manner in the coming weeks until there's more clarity around this new strain and its impacts on the economy." Last week's selloff was short-lived but Monday's relief rally, while encouraging, was relatively muted because expectations for 2022 were optimistic for the global economy.

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Will Baillie Gifford’s big bet on Moderna pay off?

Brief: Omicron variant has helped the stock recoup heavy losses, but analysts question whether it can sustain sales momentum. Baillie Gifford’s big bet on Moderna has proved difficult this month, as the Covid vaccine maker has seen weaker sales momentum and competition from Covid pill makers, but could the arrival of the Omicron strain signal better times ahead? The Edinburgh manager is currently the largest institutional shareholder in the biotech firm, owning over 42 million shares or a 10.5% stake at the end of September. Currently eight of its funds and trusts hold Moderna in their top 10 holdings, according to FE Fundinfo. Moderna, which develops mRNA medicines to treat infectious diseases, had been the Edinburgh manager’s MVP during a year in which its funds have been battered by the cyclical recovery from the Covid crisis and the Chinese regulatory crackdown. Earlier this year Moderna’s share price was red hot, jumping 330% from $112 at the start of the year to $485 in early August. However, in early November it saw a third of its value wiped after revealing 2021 sales of its Covid-19 vaccine, known as Spikevax, would be around $3bn-$5bn lower than the $20bn previously forecast.

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Monday, November 29, 2021:

  • In the United States, President Joe Biden updated the public on the country’s response to the new coronavirus variant omicron.  Officials expect the variant to soon reach the United States, despite bans restricting travel from several countries in Southern Africa where it originated. Biden says the variant is “cause for concern, not a cause for panic.” The country’s top infectious disease expert, Dr. Anthony Fauci, says it will take about two weeks before more definitive data is available. “It clearly is giving indication that it has the capability of transmitting rapidly. That's the thing that's causing us now to be concerned," Fauci told NBC.
  • Canada is set to make a decision on booster shots as cases of the new omicron variant begin to emerge. Experts are currently divided over whether the booster program should be expanded to more Canadians, and the omicron variant is expected to heat up that debate. The U.S., the U.K. and Israel have expanded their booster programs as a way to address their latest surges. Some provinces and territories, such as Manitoba, the Yukon and the Northwest Territories, have already expanded access to boosters, while in other parts of the country they are reserved for certain vulnerable groups and healthcare workers.
  • In the United Kingdom, face masks will become mandatory indoors and on public transit as officials race to contain the spread of the new variant. So far there are two cases of omicron detected in the U.K., and they are linked to travel in South Africa. Under the new rules, everyone entering the U.K. will have to take a PCR test by the end of the second day after their arrival. Anyone in contact with a suspected omicron case will have to self-isolate, regardless of their vaccination status. The health secretary will ask advisers to consider rapidly expanding the booster program, including shortening the length of time between the second shot and the booster.
  • France has postponed its mandatory vaccination requirement for healthcare workers in the French Caribbean territories of Guadeloupe and Martinique. The health ministry made the announcement on Friday, explaining that the deadline for implementing the requirement would be pushed back to December 31 to allow for more dialogue. The announcement comes after several days of widespread protests in the two territories, with reports of journalists and police officers being attacked. Protesters are against the vaccine mandate for healthcare workers which is also in place across mainland France; they are also advocating for higher salaries and lower gas prices.
  • India will resume vaccine exports to the global COVAX initiative, after pausing them for nearly nine months. The Serum Institute of India, the world’s largest vaccine manufacturer, was supposed to have been COVAX’s main supplier, but they abruptly stopped shipments in April due to a major surge in coronavirus cases in the country. Serum resumed exports on Friday, with new infections in India at their lowest level in months. According to Bloomberg, exports of 5 million AstraZeneca doses were made through COVAX to Nepal, Tajikistan and Mozambique, and 20 million doses of the vaccine produced with Novavax went to Indonesia. 
  • New Zealand will still ease coronavirus restrictions this week, despite the threat posed by the new variant, Prime Minister Jacinda Ardern announced. From late Thursday, bars, restaurants and gyms in Auckland can reopen, ending a lockdown that has been in place since August.  New Zealand will move to a traffic light system that will rate regions as either green, red or orange depending on their level of exposure to the virus and vaccination rates. Auckland will begin at red, meaning that face masks are mandatory and there are limits on gatherings. Although New Zealand restricted travel from nine South African countries in response to omicron, Ardern said she doesn’t anticipate any further restrictions. She says more evidence is needed to understand the impacts of the new variant. "It may impact on our vaccines, but it may not. It may be more severe, or it may be more mild than Delta ... we simply don’t know," Ardern said at a news conference.

Covid-19 – Due Diligence And Asset Management

Bill Ackman says the Covid omicron variant could end up being bullish for markets

Brief: Investor Bill Ackman said the new omicron variant of the coronavirus could actually give U.S. stocks a boost if symptoms turn out to be less severe. “While it is too early to have definitive data, early reported data suggest that the Omicron virus causes ‘mild to moderate’ symptoms (less severity) and is more transmissible,” Ackman said in a tweet Sunday evening. “If this turns out to be true, this is bullish not bearish for markets.” The founder and CEO of Pershing Square Capital Management added it would be bullish for the equity market and bearish for the bond market.First detected in South Africa, the new Covid variant has now been found in more than a dozen countries, causing many to restrict travel from southern Africa. The World Health Organization labeled the omicron strain a “variant of concern” on Friday when the Dow Jones Industrial Average dropped 900 points to suffer its worst day since October 2020.

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Markets Face Weeks of Uncertainty in Wait for Virus Answers

Brief: The fate of global markets now depends at least in part on laboratories around the world probing the omicron Covid-19 strain, potentially leaving investors with weeks of uncertainty in the wait for answers. The variant detected in Africa is described as highly worrying and international travel bans are proliferating. Scientists are analyzing whether it can evade inoculations and the severity of illness it causes. Vaccine maker BioNTech SE expects the first data within two weeks, initial findings that will help determine if a passing scare or bigger hit to global economic reopening looms. Reports of mild omicron cases so far brought some stability to markets Monday after a plunge in stocks and crude oil and a spike in volatility on Friday.

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Goldman Outlines Scenarios for Omicron’s Impact on Global Growth

Brief: Goldman Sachs Group Inc. economists set out four scenarios for the potential impact on global economic growth from a new coronavirus variant, while adding that it’s too early to adjust their forecasts given it still isn’t clear which is likely to transpire. Downside Scenario: Omicron transmits faster than predecessor, delta. This results in first-quarter global growth slowing to a 2% quarter-on-quarter annual rate, or roughly 2.5 percentage points below Goldman’s current forecast. For 2022 as a whole, the global economy still expands by 4.2%, or 0.4 percentage points below current forecast, while the inflation outlook is “ambiguous. Severe Downside: Both the disease severity and immunity against hospitalizations are substantially worse than for delta. Global economic growth takes a more substantial hit, while “the inflation impact is again ambiguous”.

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Equity hedge funds flee Covid-sensitive stocks amid fears of new surge

Brief: Long/short equity-focused hedge funds are offloading or short-selling stocks that are most exposed to tighter Covid-19 restrictions, against a backdrop of surging coronavirus infections in Europe and heightening concerns surrounding the new Omicron variant. With Covid-19 cases rising across Europe – and Germany, Denmark and Austria recently reintroducing tighter restrictions – equities-focused managers in the US and Europe have cut both their net and gross exposures in recent weeks, now converging near their long-term lows, Lyxor Asset Management observed in its latest Cross Asset Research commentary. Stock markets fell sharply towards the end of last week following the emergence of the potentially more serious Omicron strain – considered a variant of concern by the World Health Organisation - which has resulted in fresh travel restrictions and renewed restrictions in several countries.

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BlackRock to Pay H.K., Singapore Staff $2,000 for Quarantine

Brief: BlackRock Inc is offering to reimburse some employees in Hong Kong and Singapore as much as $2,000 to help defray costs of hotel quarantine stays of as long as three weeks. The reimbursement is available to permanent employees in the two hubs, who are vice presidents and below and have more than 12 months of continuous service, according to an internal memo that was seen by Bloomberg News and confirmed by a spokesperson. The program, which went into effect at the beginning of November, will compensate employees 50% of the cost of hotel quarantine. A growing number of global firms in Hong Kong are helping with expenses related to hotel quarantine. JPMorgan Chase & Co. and Morgan Stanley are offering employees about $5,000 to offset quarantine costs amid growing concerns over staff retention in the financial hub. 

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Friday, November 26, 2021:

  • In the United States, President Joe Biden acknowledged Covid-19 victims in his Thanksgiving holiday message, explaining that this year’s celebrations were especially meaningful after last year’s separations. “As we give thanks for what we have, we also keep in our hearts those who we lost, and those who have lost so much. And those who have an empty seat at their kitchen table or their dining room table this year because of this virus or another cruel twist of fate or accident. We pray for them,” Biden said in a pre-recorded video message. His comments come as hospitals and healthcare workers across the country prepare for an increase in Covid-19 patients because of holiday travel. The country is averaging about 95,000 new coronavirus cases per day.   
  • In Canada, the government announced its latest pandemic aid legislation, proposing a spectrum of financial supports for Canadians who are still struggling. “Bill C-2 is designed with an understanding that our economic recovery is still uneven, and that the public health measures that are saving lives continue to restrict some economic activity,” said Deputy Prime Minister and Finance Minister Chrystia Freeland. The new legislation would expand the proposed Tourism and Hospitality Recovery Program to include more businesses in the cultural sector. Businesses would be eligible for a subsidy rate of up to 75%, so long as they can prove revenue losses of at least 40% over the past year, as well as revenue losses of at least 40% during the current month. The government introduced the legislation one month after announcing that the Canada Response Benefit and emergency wage and rent subsidy programs would wind down.
  • In the United Kingdom, flights from six African countries have been suspended as concerns rise over the new Covid-19 variant. Travellers arriving in the U.K. from South Africa, Botswana, Namibia, Zimbabwe, Lesotho and Eswatini will have to quarantine in a hotel for 10 days. Flights from the six countries were suspended until the hotel system is up and running. So far 59 cases of the variant have been identified in South Africa, Hong Kong and Botswana. No cases of the variant have been detected in the U.K. as of yet. Health Secretary Sajid Javid said the B.1.1.529 variant is a cause for major international concern, and that the government must act as quickly as possible. 
  • France will make Covid-19 booster shots available to all adults, the government announced on Thursday. Beginning next week, anyone age 18 and older will be able to get a booster shot, so long as at least five months have passed since their regular second shot. Previously in France, boosters were only available to those age 65 and older, those at high-risk of severe illness and healthcare workers. Those who fail to get a booster in time will see their health passes expire, meaning that they will be barred from entering restaurants, cinemas, and other public venues. After the announcement was made, vaccination rates in France soared, with over 400,000 new reservations being made in a day.
  • The Philippines will reopen its borders to some foreign tourists beginning in December. Travellers must be fully vaccinated and visiting from countries deemed low risk by the Philippines. Currently there are 44 countries included in the Philippines’ green list. Visitors will be allowed to enter over an initial 15-day period, according to Karlo Nograles, acting presidential spokesperson, who also said the two-week window could be extended. Nograles said travellers should also have a negative PCR test within 72 hours prior to departure of their country of origin. The Philippines initially shut its borders at the beginning of the pandemic back in early 2020.
  • Australia’s state of New South Wales (NSW) is scrapping mask requirements indoors from December 15, or once the state reaches 95% vaccination rates. Masks will soon only be required on public transit, planes and at airports. QR code check-ins, which are currently mandatory at all venues, will only be needed at hospitals, long-term care facilities, pubs and nightclubs. Despite only having emerged from one of the strictest lockdowns in the world last month, NSW has accelerated its push for normalization. High vaccination rates have been a big part of it, with some 92% of people in the state having had both shots, Bloomberg reports.

Covid-19 – Due Diligence And Asset Management

Covid risks can still derail U.K. recovery, BOE’s Pill says

Brief: Bank of England Chief Economist Huw Pill said new variants of the coronavirus and the risk of another lockdown are some of the risks that could blow off track the view of policy makers that the U.K. economic recovery is maturing. Speaking Friday as the emergence of the Nu variant of Covid-19 roiled global markets, Pill said the arrival of any new strain could disrupt the BOE’s guidance that rates have to rise in coming months. “If there’s a financial disruption, or if there’s the onset again of a pandemic and a lockdown, those are the type of events which clearly would change our view of the world. We hope those things don’t happen, Pill told business leaders in northern England. “We hope those things don’t happen. We don’t really know what the future holds. It’s those unknown unknowns that the most difficult to manage.”

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Traders unwind rate-hike bets as new COVID fears spread

Brief: Money markets are offloading bets on central bank interest-rate hikes in a hurry, as inflation fears give way to concerns that a new coronavirus strain may spread globally and slow economic growth. Traders have pushed back the timing of a 25-basis-point rate increase by the Federal Reserve to September from June, with only one further hike expected for the remainder of 2022. It’s a similar story in the U.K. where the Bank of England is now expected to tighten policy in February instead of next month. Wagers that the European Central Bank will raise its deposit rate by the end of next year have also been slashed, with only a seven basis-point increase priced in, around half of that seen earlier this week.

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UK entrepreneurship back on track with 15 per cent rise in number of new businesses created last year

Brief: UK entrepreneurs are leading the way out of the Covid-19 crisis with the number of new businesses created up 15 per cent in the last year, according to ECI Partners, a growth-focused mid-market private equity firm. According to figures from the ONS, a total number of 405,555 new businesses were created in the UK in 2020/21, compared to 352,575 in 2019/20. Despite the economic challenges of the pandemic, UK entrepreneurs have shown their resilience and the rise in business creation provides an optimistic outlook for new businesses in the UK. Mark Keeley, Partner at ECI Partners, says: “These figures really demonstrate the UK’s strong entrepreneurial spirit, with business leaders focussing on how to thrive rather than simply survive.”

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Bitcoin enters bear market territory as risk assets plunge on new Covid variant

Brief: Bitcoin fell sharply alongside other assets on Friday, hitting a seven-week low and officially entering bear market territory. The world’s biggest cryptocurrency sank nearly 8% in the last 24 hours to $54,315, according to Coin Metrics data. Bitcoin at one point traded as low as $53,549, its lowest level since early October. Bitcoin is down more than 20% from an all-time high of nearly $69,000 which it hit earlier this month. Bear markets are typically defined by a decline of 20% or more from recent highs. Other cryptocurrencies also plunged Friday. Ether, the second-biggest crypto, fell 10% to $4,062, while XRP slumped 10% to around 95 cents. Digital currencies are falling in tandem with other risk assets amid panic over a new, heavily-mutated variant of the coronavirus first detected in South Africa.

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Airline shares skid on South Africa travel bans tied to variant

Brief: Airline shares tumbled on Friday after the U.K. instituted a temporary ban on flights from South Africa and Germany prepared to restrict entry along with other European Union members. Israel and Singapore have also curbed access from South Africa and neighboring nations to fight an emerging strain of coronavirus that has alarmed health officials across the world. European Commission President Ursula von der Leyen proposed an “emergency brake” on air travel from South Africa, which allows EU member countries to act quickly to limit the risks from emerging virus variants. British Airways parent IAG SA sank 21%, while Deutsche Lufthansa AG fell 14%. Ryanair Holdings Plc, Air France-KLM and other European airlines registered drops of similar magnitude.

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Thursday, November 25, 2021:

  • Beginning on January 22, the United States will require all travelers crossing the land border into the country to be fully vaccinated. All non-residents of the U.S. will now have to show proof of two doses of an approved Covid-19 vaccine, bringing regulations for essential travelers in line with those made for leisure travelers earlier this month. American citizens will remain eligible to cross the border without proof of vaccination, provided they have passed the required tests before entry. The proof of vaccination requirement was temporarily delayed allowing trade between Canada and the United States to remain unimpeded as it was throughout the pandemic thus far. Meanwhile, due to the extensive flooding in British Columbia, some border restrictions have been waved to allow for Canadian residents to pass through the United States to get home as many roads remain closed in the province.

  • Canada has become the first country to grant full approval to the Johnson & Johnson single-shot Covid-19 vaccine. People 18 and over will now be able to receive the Johnson & Johnson vaccine that had been approved for use under an interim order earlier in the year. The vaccine was approved for emergency use in several countries across the globe including the United States. In August, Canada had agreed to send roughly 10 million doses of the J&J vaccine to poorer countries who were unable to secure vaccines on their own. Canada has so far administered over 60 million doses of Covid-19 vaccines since the pandemic began and is currently registering just under 2500 new cases of the virus a day.

  • Ministers in the United Kingdom are urging the public to get a Covid-19 booster shot before the holiday season. Experts are recommending that Britons do everything in their power to get a booster shot before December 11 to ensure they have the strongest amount of protection against the virus before Christmas Day. Earlier this month Prime Minister Boris Johnson acknowledged that the vaccine efficacy wanes over time, and that booster shots remain the best defense against contraction the virus. Nearly 16 million people across the country have already received a booster shot or third dose of the vaccine, currently, anyone over 40 or those deemed especially vulnerable are eligible to receive a third dose. A Department of Health and Social Care spokesperson said, “those eligible for a booster have been urged to take up the offer as soon as possible to protect themselves and their families and help to reduce the pressure on the NHS.”

  • On Thursday, Germany became the fifth country in Europe to surpass 100,000 deaths related to Covid-19. Chancellor Angela Merkel called it a “very sad day” in a press conference in Berlin. “And unfortunately, at the moment, more than 300 deaths are being added to that each day,” she added. Merkel, who is acting as a caretaker before her new replacement Olaf Scholz is sworn in, has praised the new government for creating a specialized group of experts tasked with containing the virus. In the last 24 hours, Germany broke their single day record of new confirmed cases of the virus with 75,961. The country has seen over 5 million confirmed cases of Covid-19 since the start of the pandemic. With ICU beds in the country filling up, Germany has now contracted medical evacuation airlifts to transfer patients to regions with more available hospital beds.

  • South African scientists have found a new variant of the Covid-19 virus on Thursday. The new variant, named B.1.1.529 has been found in Botswana and Hong Kong in travelers that had recently visited South Africa. Virologist Tulio de Oliveira said that the variant has a “very unusual constellation” of mutations that could help the virus evade the body’s immune response, making it very easily transmissible. Health Minister Joe Phaahla said on Wednesday that the variant is behind an “exceptional” rise in cases over the last week, which could make it a “major threat.” New daily infections in the country were close to 1200 on Wednesday, up drastically from roughly 100 earlier in the month. Early indicators show that the new variant has already spread substantially in South Africa’s most populous province of Gauteng. Phaahla has said that it is still too early to tell whether the country will impose stricter restrictions due to the new variant.

Covid-19 – Due Diligence And Asset Management

Four in 10 Canadian businesses say profitability won't return to pre-COVID levels until 2023

Brief: Nearly 40 per cent of Canadian businesses say they do not expect a return to pre-pandemic profitability levels by the end of next year, as concerns about rising inflation and new waves of COVID-19 weigh on business prospects. That's according to HSBC's most recent Voice of Business survey of more than 7,300 business leaders in 14 countries, including 536 Canadian companies. The survey found that 25 per cent of businesses will reach pre-pandemic levels of profitability by the end of the year, and another 36 per cent expect to hit those levels by the end of 2022. But other companies expect a more prolonged recovery period, with 39 per cent reporting that they will return to pre-pandemic levels of profitability after 2022. The survey also found that Canadian businesses are feeling more pessimistic about their future growth prospects than entrepreneurs in other countries. In Canada, 56 per cent of businesses say they feel more optimistic than they did a year ago – a time that was marked by COVID-19 uncertainty – compared to 72 per cent in the U.S. and 64 per cent globally.

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Europe Lockdowns Put $50 Billion of Bonds on Cusp of Junk Grade

Brief: A new wave of junk downgrades looms over Europe as the region shudders under one of the worst outbreaks of the pandemic. Some 84 bonds worth 46 billion euros ($52 billion) are on the cusp of losing their investment-grade ratings -- marking a reappearance for fallen angels that had all but vanished this year, according to Bloomberg Intelligence analysts. “With European lockdowns back on, fallen angels are a worry,” Mahesh Bhimalingam and Bhumika Gupta wrote in research published Thursday. There was just one fallen-angel downgrade in Europe in the past six months, they wrote. The downgrades are another sign of cracks emerging in the European credit market that’s been buttressed by central bank bond buying for years and even more so during the pandemic. But now that support is set to diminish as soon as March -- and the prospect is pushing up borrowing costs and volatility. The risk premium in euro-denominated corporate bonds, as measured by Bloomberg indexes, just rose above 1% for the first time in more than a year. This comes as spread volatility is rising to multi-month highs from depressed levels.

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Europe’s Recovery at Risk From Covid Wave, Inflation Pressure

Brief: Euro-area business activity unexpectedly quickened, though the region’s recovery faces headwinds from a fresh wave of Covid-19 infections and “record inflationary pressures.” IHS Markit’s composite Purchasing Managers’ Index rose to 55.8 in November from 54.2 in October, according to a survey of purchasing managers by IHS Markit published Tuesday. While that defies the median estimate in a survey of analysts that forecast the measure would retreat, it still points to weaker economic growth in the closing quarter of 2021, the report said. That’s partly down to the pandemic’s latest surge across Europe, which looks set to cause renewed disruptions to the economy in December. Any new lockdowns are likely to hit the currently thriving services sector, while manufacturing is already suffering from a global supply squeeze.

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European close slightly higher despite Covid concerns; Telecom Italia up 16%

Brief: European stocks eked out small gains on Wednesday as traders digested a fresh batch of economic data and monitored the region’s latest Covid surge. The pan-European Stoxx 600 closed up 0.1% after choppy trading earlier in the session. Telecoms shares rose 1.2% to lead the gains while autos stocks sank 1.5%. European investors continue to monitor the acute Covid crisis in the region this week, with more countries considering stricter restrictions and partial lockdowns to curb rising infections. Germany is expected to make a decision on stricter measures on Wednesday amid a surge in cases there, and France recorded more than 30,000 new daily infections on Tuesday for the first time since August. In political news, German parties agreed to form a three-way coalition after almost two months of talks. The deal will see Olaf Scholz, the center-left Social Democratic Party’s candidate, become Germany’s next chancellor, replacing Angela Merkel who has led Germany for 16 years.

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Hong Kong’s status as a global financial centre can withstand city’s quarantine rules, SFC chief says

Brief: The head of Hong Kong’s securities watchdog categorically defended the government’s restrictive quarantine policy, saying that it will not affect the city’s status as a global finance hub. “There will be no long-term impact on Hong Kong as an international financial centre,” said Ashley Alder, chief executive of Securities and Futures Commission. Alder, who is currently undergoing a 21-day quarantine after returning from the COP26 climate summit in Glasgow, answered media queries from his hotel room as he remotely took part in the SFC Regulatory Forum. Other financial centres like Singapore, London and New York have eased travel restrictions and opted for “living with Covid”. Hong Kong, on the other hand, has adopted a zero-Covid-19 policy and requires travelers to undergo up to 21 days of compulsory quarantine. “The other cities cannot replicate what we are doing,” he said. “Hong Kong has a range of successful cross-border trading schemes with the mainland, including the two Stock Connect schemes, Bond Connect and Wealth Management Connect schemes.”

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Wednesday, November 24, 2021:

  • In the United States, the number of coronavirus deaths for this year has surpassed last year’s number. According to the Centers for Disease Control and Prevention, there were 386,233 Covid-19-related deaths in 2021 as of Tuesday, compared with 385,343 in 2020. The percentage of U.S. deaths that Covid-19 accounted for was also higher this year, at 13% compared with about 11% in 2020. Experts say there are a number of reasons for the higher death toll, with the main reason being the relaxation of curbs like mask wearing and social distancing amidst the circulation of the highly infectious delta variant.  Currently about 59% of Americans are fully vaccinated.
  • In Canada, with vaccines for children ages five to 11 recently arriving in the country, the provinces are outlining their rollout plans. British Columbia will start next week, with families being invited to book appointments after they’ve been registered through the “Get Vaccinated” portal. Quebec’s premier said their vaccine campaign will move into schools next week, while in Alberta, appointments will be available from Friday at Alberta Health Service clinics and some pharmacies around the province. Ontario, Saskatchewan, Manitoba, New Brunswick, P.E.I. and Newfoundland and Labrador have also announced their rollout plans for vaccinating the age group. 
  • In the United Kingdom, experts are warning that some ministers may have “lost the message” around Covid-19 restrictions. As the Independent reports, members of the government’s Scientific Advisory Group for Emergencies (Sage) warned that the messaging has slipped around basic curbs like mask wearing and social distancing, a cause for concern as the weather gets colder and the holidays approach. Despite the prime minister’s position that workers should be returning to the office, Sage members say the government should be encouraging people to work from home wherever possible. With more than 1000 weekly deaths recorded on Tuesday for the first time in eight months, the experts say the U.K. government will need to do more to keep people safe this winter.
  • France’s Prime Minister Jean Castex has tested positive for Covid-19 and is now in isolation. According to the prime minister’s office, Castex contracted the virus from his 11-year-old daughter, who is not able to be vaccinated because vaccines aren’t yet approved in the E.U. for those under 12. Castex, who is vaccinated himself, has only experienced mild symptoms so far and plans to work throughout his 10 days in isolation. Five Belgian ministers are also now in isolation after meeting with the French prime minister on Monday. His positive results come as Covid-19 cases surge across much of Europe, with most governments choosing to tighten restrictions. 
  • Italy’s government is introducing tough new restrictions for unvaccinated people. The Italian “Super Green Pass” comes into effect on December 6 and will only allow vaccinated people to enter non-essential facilities like cinemas, theatres, nightclubs and gyms, as well as be served in bars and restaurants. Under the new rules, the unvaccinated will still be allowed to access their workplaces after testing negative for the virus. Italy remains especially cautious as case numbers and deaths continue to rise steadily. They recently shortened the timeframe for booster shots from six months to five months after the regular second shot.
  • New Zealand will reopen its borders to fully vaccinated foreign travellers beginning in 2022. Covid-19 Response Minister Chris Hipkins explained that the country will take a phased approach to the reopening, beginning with New Zealand citizens and residents travelling from Australia in January. By February, New Zealand citizens travelling from other parts of the world will also be allowed in, and by April 30, fully vaccinated tourists from all other countries, unless they’re deemed high-risk, can enter. "A phased approach to reconnecting with the world is the safest approach to ensure the risk is carefully managed," Hipkins said. "It reduces the potential impacts on vulnerable communities and the New Zealand health system."

Covid-19 – Due Diligence And Asset Management

ECB’s Holzmann Says Pandemic Buying May Be Put on Hold Next Year

Brief: The European Central Bank may decide to only put its 1.85 trillion-euro ($2.1 trillion) pandemic bond-buying program on hold rather than abolish it after net purchases are set to end in March, according to Governing Council member Robert Holzmann. The program, which was launched in 2020 to address the pandemic shock and fragmentation on euro-area bond markets, could enter a “waiting room” rather than be terminated as the ECB’s crisis response moves into a new phase, Holzmann said at a news briefing in Vienna. This will be in order to “save the advantages of flexibility in case they become necessary in the event of economic shocks, which are definitely possible, but we do not expect,” he said.At issue is the question whether the ECB should hold on to the versatility of its crisis tools even after it shifts its focus on more conventional instruments.

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German Business Confidence Slumps as Virus Threatens Rebound

Brief: German business confidence took another hit in November, with a new wave of Covid-19 infections looming over the economy and rising inflationary pressures threatening to weigh on manufacturing. A gauge compiled by the Munich-based Ifo Institute dropped for a fifth straight month to its lowest since April. Economists had predicted a decline to 96.7. Expectations for the next half year also worsened. The report underscores mounting challenges facing German businesses, which are now facing a resurgent pandemic -- having already struggled with supply disruptions for most of 2021 as demand across the globe rebounds following lockdowns. A separate purchasing managers’ index Tuesday showed “unprecedented inflationary pressures” are threatening to restrain output in the coming months. The Bundesbank warned this week that inflation may approach 6% in November, and could stay elevated for a longer period than originally thought.

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Nordea Staff in Denmark Urged to Carry Covid Passport at Office

Brief: Nordea Bank Abp is urging its employees in Denmark to bring a Covid certificate when working at the office. The biggest Nordic bank isn’t currently checking whether employees have a Covid passport, but said staff are “expected to act responsibly” and follow hygiene protocols. The purpose is to limit the spread of the virus, a Nordea spokesman said in an emailed response to questions. The lender also provides Covid testing at its largest locations in Denmark. Nordea’s move comes at a time when Denmark is working on rushing through legislation that will allow employers to demand workers have a valid Covid passport. And even though those proposals are not yet in place, they do have the backing of a major labor organization.

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Millions in U.K. Covid Loans Went to Inactive or Brand-New Firms

Brief: As coronavirus ripped through Britain and businesses faced a potentially fatal cash squeeze, a company controlled by one of the U.K.’s richest financiers, John Beckwith, received a taxpayer-backed relief loan for about 3.7 million pounds ($5 million) — even though the firm hasn’t been trading for years. A Bloomberg News review of almost half of the loans granted under the U.K. government’s 26.4 billion-pound Coronavirus Business Interruption Loan Scheme (CBILS) shows that lenders handed out more than 130 million pounds to companies with similarly questionable claims, despite a requirement that borrowers had to be negatively affected by the pandemic. One emergency loan, for 4.7 million pounds, went to a firm founded just two days before it received the funds, corporate records show.

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Zoom Set to Lose $100 Billion From Peak Value as Pandemic Gains Fade

Brief: Zoom Video Communications Inc., the poster child of the so-called “pandemic winners” basket, is losing more of its luster. The video conferencing company slumped 15% to close at the lowest since June 2020. Its latest quarter showed slowing growth as people started socializing in-person -- also a trend that roiled the shares of other lockdown winners Peloton Interactive Inc. and Teladoc Health Inc. Including Tuesday’s losses, Zoom saw about $100 billion wiped out from its market value since its October 2020 peak, which is a decline of 64% for the stock. Despite the pullback, the stock is still up nearly 500% since its 2019 debut. Both Zoom and Peloton have given back the bulk of their gains since the pandemic’s onset, suffering lockdown withdrawal symptoms.

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Tuesday, November 23, 2021:

  • Experts in the United States are suggesting that lockdown measures to curb the spread of Covid-19 will likely continue to be left up to state and local officials. While other countries throughout the rest of the world have imposed nation-wide lockdowns, the United States is unlikely to follow suit. “The political will to do so just isn’t there,” said Nicholas B. Creel, PhD, a political scientist, and assistant professor of business law at Georgia College and State University. “Moreover, the federal government isn’t able to do much in the way of restrictions given our federalist system that largely empowers states to dictate policies that directly impact the health of their population,” he added. Courts in the country are currently deciding whether the proposition from the Biden administration to mandate vaccines for businesses with over 100 employees is legal. If upheld, the move could affect up to 100 million Americans.

  • Today, the Liberal government in Canada will deliver a throne speech marking its third term in office. Governor General Mary Simon will deliver the speech, her first since taking over for the former Governor General, Julie Payette, in July. Liberal Government House Leader Mark Holland said on Monday that the speech “will focus very heavily on the circumstances of the pandemic and putting the pandemic behind us and continuing growth." He went on to say that the speech would announce new support for sectors that have been "adversely impacted by the pandemic." The Liberal government had previously promised to continue with the Canada Recovery Hiring Program, which will help subsidize costs for businesses that are hiring new workers until at least March of 2022. The government also plans to introduce legislation that will criminalize anti-vaccination protests outside of hospitals and other health care facilities.

  • The United Kingdom has officially recognized India’s Covaxin as a valid Covid-19 vaccine. In an announcement the country has said that it will recognize any vaccine that is on the World Health Organization’s Emergency Use Listing (WHO EUL). The list includes Covaxin, Sinovac and Sinopharm Beijing. Earlier this month British High Commissioner to India, Alex Hales tweeted that those who have received a vaccine authorized by the WHO EUL will be allowed to enter the country starting on November 22nd. As of early Monday morning, travelers with two doses of an approved vaccine will no longer be required to self-isolate upon entering the country. The new measures will now benefit people wishing to enter the U.K from countries such as the United Arab Emirates, Malaysia, and India. The vaccines now recognized in the U.K. are Oxford-AstraZeneca (Covishield), Moderna, Janssen, Pfizer BioNTech, Sinovac, Sinopharm Beijing and Covaxin.

  • Amid a rapid surge in Covid-19 cases, Germany’s top health official on Tuesday said that he would not rule out another nation-wide lockdown, but it is something they are actively trying to avoid. Health Minister Jens Spahn said that if lockdowns were to occur that he hopes it would be a “regional measure,” and limited to places where the case increases are “very very dramatic.” Infections in the country on Tuesday were about 400 in every 100,000 people, however, in places like Bavaria incidence rates were numbering close to 650 in every 100,000, and in Saxony nearly 1000. “In these regions, in the hospitals, everything has simply ground to a halt,” Spahn said. “That means you can’t rule out measures in advance.” Europe continues to be the epicenter of the pandemic with Austria imposing a national lockdown on Monday, and partial shutdowns imposed in both the Netherlands and Italy. 

  • Despite other nations easing Covid-19 regulations, China is remaining committed to their Covid Zero policy. The Delta variant has taken hold in the country with China seeing the sharpest rise in new cases since May. In the first 18 months of the pandemic China had seen 177 days without a new infection, now it is the last country unwilling to accept it may have to live with the virus in its midst. “The outbreaks in China’s neighbors and around the world remain elevated,” said Wu Lianyou, an official with China’s National Health Commission,
    “creating a complicated and grave challenge for this winter and next spring,” he continued, reiterating that China will remain sealed off from visitors. Local authorities have initiated blitz testing and stricter lockdown measures to ensure that any flare-ups are quelled as quickly as possible. According to officials, so far China has seen less than 5000 deaths related to Covid-19.

Covid-19 – Due Diligence And Asset Management

Alternative funds industry has deftly navigated pandemic-related disruption and uncertainties, says EY survey

Brief: EY has published the 2021 EY Global Alternative Fund Survey, which offers a comprehensive overview of the perspectives from alternative fund managers and the institutional investors who allocate to these asset classes. The 15th annual survey sheds light on the topics that will be transforming the industry for years to come, including investors' improved perception of alternative funds; the growing importance of ESG and diversity, equity and inclusion (DEI) considerations; and the industry's view on product and strategy expansion into areas such as digital assets and an increased desire for exposure to private markets. "Beyond reflecting on how alternative fund managers and their investors addressed the ongoing challenges posed by COVID-19, this research highlights the resilience of our industry and the key transformations that managers and investors are partnering to affect," saisaysd Natalie Deak Jaros, EY Global Hedge Fund Co-leader and Americas Wealth & Asset Management Co-leader. "2021 was a year in which the industry invested to build significant momentum around various initiatives that will pay dividends for years to come."

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Investors call for restraint on executive pay and bonuses during pandemic recovery

Brief: Investment managers expect companies to restrict executive bonuses if government support has not been paid back during the year under review, according to the Investment Association (IA) latest annual pay guidelines. The majority of companies have been sensitive to the experiences of their stakeholders, employees and customers throughout the Covid-19 pandemic when deciding on pay and bonuses. According to the trade body, 13% of the 83 FTSE companies analysed were "colour topped" by the Institutional Voting Information Service (INVIS) for their Covid response during the 2021, AGM season. The colour code, or ‘Top’, helps highlight the severity of issues to be considered. The IA also wrote to the chairs of FTSE 350 Remuneration Committees, which told companies that ESG metrics should also determine executive pay and bonuses. Fund managers want to see that ESG metrics are clearly linked to company strategy. “The rationale and robustness of ESG performance-related targets should also be made clear to investors,” the IA wrote. “Companies with ESG risks and opportunities incorporated into their long-term strategies should have these similarly incorporated into their remuneration structures, and where they haven’t, should explain to investors how they will do this in future years.”

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Europe’s Recovery at Risk From Covid Wave, Inflation Pressure

Brief: Euro-area business activity unexpectedly quickened, though the region’s recovery faces headwinds from a fresh wave of Covid-19 infections and “record inflationary pressures.” IHS Markit’s composite Purchasing Managers’ Index rose to 55.8 in November from 54.2 in October, according to a survey of purchasing managers by IHS Markit published Tuesday. While that defies the median estimate in a survey of analysts that forecast the measure would retreat, it still points to weaker economic growth in the closing quarter of 2021, the report said. That’s partly down to the pandemic’s latest surge across Europe, which looks set to cause renewed disruptions to the economy in December. Any new lockdowns are likely to hit the currently thriving services sector, while manufacturing is already suffering from a global supply squeeze.

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Private equity on course to invest over USD1tn in US economy in 2021

Brief: For the first time in history, private equity is on track to invest more than USD1 trillion in American businesses over the course of a single calendar year, according to the American Investment Council’s (AIC) 2021 Q3 Investment Trends Report. Through the end of the third quarter, private equity has invested USD788 billion in 4,806 businesses across the United States. The amount invested represents an 86 percent increase from the same period in 2020. “Today’s report confirms that private equity has been a critical partner to help businesses of all shapes and sizes as the American economy recovers from the COVID-19 pandemic,” says AIC President and CEO Drew Maloney. “Private equity is a particularly critical partner for small businesses that need the capital and expertise to survive and grow. The industry’s continued growth is a testament to the strength of these partnerships and private equity’s critical role in powering the American economy.”

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Prudential commits to Support Cambodia in its post pandemic recovery with a special focus on helping students return to schools

Brief: As COVID-19 cases stabilize and Cambodia enters a post pandemic recovery phase, schools have been reopening under the “back to school” campaign. Prudential Cambodia has committed $100,000 in 2021 to support the Ministry of Education, Youth and Sports and other NGO partners in their efforts to provide quality education as well as ensure public safety. The funds will be used to donate high quality thermometers and masks, and other necessary items to encourage students especially those in middle or higher education to return to school. His Excellency Dr. Hang Chuon Naron, Minister of Education, Youth and Sports said, “I would like to thank Prudential Cambodia for their support on our back to school campaign which will enable children to continue their education during this challenging time”. “Prudential is committed to supporting our communities as they recover from the pandemic. Education is critical to an individual’s success in the future and we are happy that we are able to help parents and students in Cambodia continue to access quality education in a safe manner,” said Mr. Sanjay Chakrabarty, Chief Executive Officer, Prudential Cambodia.

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Monday, November 22, 2021:

  • The United States’ chief medical adviser Dr. Anthony Fauci urged Americans to get their booster shots ahead of the busy Thanksgiving holidays. The nation’s top infectious disease expert warned that colder temperatures are starting to drive cases back up, and that 60 million people across the country are still unvaccinated. “We have a lot of virus circulating around. You can’t walk away from the data, and the data show that the cases are starting to go up, which is not unexpected when you get into a winter season. People start to go indoors more and we know that immunity does wane over time,” Fauci said on CNN’s State of the Union. Fauci also recently clarified that the definition of fully vaccinated remains the same (2 doses of vaccine), despite some officials saying that people are no longer fully vaccinated until they’ve had booster shots.

  • In Canada, the Canadian Medical Association (CMA) is calling on the federal government to make working conditions safer for frontline healthcare workers. In a statement released Thursday, the CMA calls on Ottawa to make changes to the Criminal Code that would make it an offence to obstruct access to any healthcare facility, and to threaten or intimidate any healthcare worker or person seeking healthcare. On September 13, during the federal election campaign, Prime Minister Justin Trudeau promised that his government would make these changes if re-elected.  Now the CMA is urging Ottawa to keep that promise, as well as contacting an array of social media companies to work on an action plan that would stop online harassment and threats against healthcare workers.

  • In the United Kingdom, the government is investigating whether built-in racial bias was present in some medical devices, which may have caused people of colour to get sick and die of Covid-19 in disproportionate numbers.  Oximeters, which estimate the amount of oxygen in a person’s blood, have been shown to be less effective for people with dark skin, which may have led to thousands of unnecessary deaths during the pandemic. “There are research papers already on this and no one did anything about it,” Health Secretary Sajid Javid said. “Now, I’m not saying this was deliberate by anyone, I think it’s just it’s a systemic issue potentially, with medical devices and it may go even further than that with medical textbooks, for example.” Javid said findings from a U.K. review that also looked at gender bias will be released in January.

  • The French government sent dozens of special forces to the Caribbean island of Guadeloupe, an overseas territory of France, amid an eruption of protests over Covid-19 restrictions that escalated into looting and rioting. In Pointe-a-Pitre, the island’s largest urban centre, three people were injured after clashes with police and several shops were looted. Over 30 people were arrested overnight into Sunday morning. Demonstrators were protesting mandatory vaccinations for healthcare workers and France’s Covid-19 health pass. Vaccination rates in Guadeloupe are much lower than in the rest of France, at 33% compared with 75%.

  • Germany has declared a nationwide state of emergency amid surging Covid-19 cases, the head of the Robert Koch Institute announced on Friday. Lothar Wieler called for urgent additional measures to address the rise in cases as they topped 50,000 for the third day in a row. “All of Germany is one big outbreak," Wieler told reporters. "This is a nationwide state of emergency. We need to pull the emergency brake.” His comments came right after the upper house of parliament approved new restrictions that will come into effect on Wednesday. The new restrictions will require proof of vaccination for access to shared workplaces and public transportation. 

  • Australia will allow fully vaccinated foreign visa holders to enter the country from early December, Prime Minister Scott Morrison announced. Australia’s borders have been closed since May 2020, with only restricted numbers of citizens and permanent residents allowed in. From December 1, the rules will change to allow students, business visa holders, and refugees to arrive. Fully vaccinated tourists from South Korea and Japan will also be allowed to enter. “Steps we are taking today are about securing our economic recovery, steps we are taking today are about Australians looking forward, steps we are taking today is about taking Australia forward,” Morrison said at a press briefing.

Covid-19 – Due Diligence And Asset Management

JPMorgan to Reimburse $5,000 to Hong Kong Bankers for Quarantine

Brief: JPMorgan Chase & Co. is offering to reimburse Hong Kong employees up to $5,000 to compensate for their quarantine stay as the financial hub sticks to its zero-Covid policy. All Hong Kong-based employees who are executive directors and below may claim the amount for a single quarantine stay for personal trips undertaken by employees visiting immediate family members, which includes spouses, domestic partners, children, parents and grandparents, according to an internal memo. A Hong Kong-based spokeswoman confirmed the content.“We recognize that the costly quarantine measures in place in Hong Kong associated with COVID-19 have impacted many of you with respect to visiting family and loved ones overseas,” JPMorgan’s Hong Kong chief Harshika Patel said in the memo. The program applies to employees under quarantine between Dec. 1, 2021 and Nov. 30, 2022, the memo said.

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European markets retreat slightly as Covid-19 concerns weigh

Brief: The pan-European Stoxx 600 slipped 0.2% by mid-afternoon, with telecoms climbing 1.3% while travel and leisure stocks fell 1.3%. U.S. stock futures pared earlier gains but were still up marginally in premarket trading on Monday ahead of the holiday-shortened week stateside. U.S. markets will be closed on Thursday on Thanksgiving Day and the stock market closes early at 1 p.m. ET on Friday. Stocks have a track record of posting gains in Thanksgiving week, which will potentially set the stage for a year-end Santa rally. European investors will be keeping an eye on the spread of Covid-19 across the continent after Germany and Austria re-imposed strict containment measures last week. Another big market-moving event this week will be President Joe Biden’s nomination for the next Federal Reserve chief.

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Second Winter of Woe Threatens Global Economy

Brief: The world economy is approaching the northern hemisphere winter in disarray, unable to shake off the coronavirus crisis amid persisting supply disruptions, soaring prices and resurgent outbreaks. Global surveys of purchasing managers this week are likely to point that way. Among the outcomes anticipated by economists are slowing manufacturing and services activity throughout the euro zone and the U.K., and only modest improvement in the U.S. With parts of Europe confronting renewed restrictions to contain another wave of the virus, China’s rebound fading and rising infections taking hold in America too, much of the global economy is now staring at the threat of a second northern winter of woe, compounded by a cost-of-living squeeze amid surging gas prices and supply bottlenecks.

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Manulife set to reopen Canadian offices in late January

Brief: Manulife Financial Corp. plans to reopen its Canadian and U.S. offices on Jan. 24, with some employees on hybrid models that will bring them into the workplace three days a week. Many workers will visit the office on Mondays, Wednesdays and one additional flex day per week, Chief Executive Officer Roy Gori and the firm’s executive leadership team said in a memo to staff on Friday. “We have listened to your feedback, heard from medical experts and government officials, and talked with our peers across the market,” the executives said in the memo.Our goal is to balance the flexibility many of us have enjoyed as a silver lining to the pandemic with our amazing on-campus culture where we can get it done together.” Manulife’s announcement comes two days after Bank of Nova Scotia, Canada’s third-largest lender by assets, set Jan. 17 as the date it would start a phased return to office.

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Less of the same: Investors should brace for positive but below average returns in 2022, says Pictet's Paolini

Brief: The outlook is still good for investors, says Luca Paolini, chief strategist at Pictet Asset Management. “Equity prices have reached a record high, up nearly 100 per cent from the pandemic low, much faster than anticipated. Whilst the outlook should seem good for investors, some factors will cap the expected returns for both equity and bonds in 2022. “Record valuation, tighter monetary/fiscal policy and the surge in inflation will keep the pressure on, resulting in single digit return for equities. Bonds, we think have entered a secular bear market, although a significant breakout in yields looks unlikely.” “Next year will be ‘less of the same’, rather than a turning point. We are in the last third of the expansion in what has been the most accelerated market and business cycle in history.”

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Friday, November 19, 2021:

  • In the United States, the government is set to purchase 10 million courses of Pfizer’s new Covid-19 treatment, if regulators authorize it. The deal will cost $5.29 billion, though the drugs are about 25% cheaper than the oral Covid-19 pills made by Merck, who the U.S. also has a contract with. Pfizer has asked the Food and Drug Administration (FDA) to approve the experimental pill for emergency use; the FDA is already reviewing the submission from Merck and will have a meeting about it later this month. Both oral treatments have been shown to significantly reduce the risk of hospitalizations and deaths among people with coronavirus infections.
  • In Canada, the province of Ontario announced that they will bring Covid-19 testing sites to shopping malls and other busy locations over the winter months, in an effort to help curb the spread of the virus. Deputy Premier Christine Elliott made the announcement on Thursday, explaining that the sites will offer tests to asymptomatic people in areas with high infection and hospitalization rates and lower vaccination levels. Ontario students will also be sent home over the winter break with rapid Covid-19 tests as part of the government’s winter testing plan. The program is voluntary and instructs students to test every three to four days over the holidays beginning December 23. 
  • In the United Kingdom, the government was not prepared to respond to the Covid-19 pandemic and the impacts it had on society, a new report has found. The report from the National Audit Office (NAO) said the government lacked planning on shielding, job support programs and school disruption. The spending watchdog also said that time and energy spent preparing for Brexit took up a significant number of resources. The NAO also found that overall, the pandemic “exposed a vulnerability to whole system emergencies,” and that there was “limited oversight and assurance” of the plans the government had in place.
  • The Philippines approved emergency use authorization of Novavax’s Covid-19 vaccine, becoming the second country to do so, after Indonesia. The vaccine will be manufactured by Serum Institute of India, under the brand name Covovax.  The shots are to be taken in two doses not less than 21 days apart and are approved for adults ages 18 and older. Only about 35% of the population is fully vaccinated in the Philippines.  The Southeast Asian nation has approved eight other vaccines for emergency use: Pfizer-BioNTech, Moderna, Johnson & Johnson, AstraZeneca, Sinovac, Sinopharm, Gamaleya Sputnik V and Bharat Biotech.
  • Japan’s Prime Minister Fumio Kishida announced a record $490 billion stimulus package to help the economy recover from the coronavirus pandemic. The package includes cash handouts to families with children under 18 who meet an income cap, and support for ailing businesses. It also includes a pay raise for nurses and care workers. "The package has more than enough content and scale to deliver a sense of security and hope to the people," Kishida told reporters. Analysts say Japan’s economy, which contracted at an annual rate of 3% in the July-September period, is not likely to rebound until next year.
  • In Australia, the state of Victoria will pause the debate over a contentious bill that would give pandemic powers to the state premier and health minister. The move came as a motion from the Labor Party, which carried 20 votes to 17. The government had hoped to pass the bill this week but will now have to enter into further negotiations to reach an agreement before the existing pandemic powers end on December 15. The legislation would give the premier the power to make an indefinite declaration of a state of emergency, and the health minister the power to make broad public health orders.

Covid-19 – Due Diligence And Asset Management

UK and US drive global growth in healthtech sector

Brief: The UK and US are driving forward the rapid growth of the global healthtech sector, with latest data from London & Partners and Dealroom.co showing a record USD51.3 billion has been pumped into startups already this year, up 280 per cent on 2016 levels. The findings have been released to coincide with this week’s Silicon Valley Comes to the UK event series, bringing together investors, entrepreneurs and CEOs from the UK and the Bay Area both physically and virtually to discuss the role of technology in building a better future and solving the great challenges of our time. As the world continues to tackle the impacts of coronavirus, the pandemic has acted as a catalyst to an already growing healthtech sector and investment has reached record highs in 2021. The US leads globally with USD31.9 billion in VC investment so far this year, while the UK comes in third with USD3.8bn, close behind China’s USD4.1 billion.

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Europe lockdown rattles Wall Street, boosts safe-havens

Brief: Resurgent concerns about COVID-19 in the face of looming European lockdowns weighed on a range of sectors Friday, pushing stocks and oil down and boosting the dollar. Wall Street opened the day mixed, with the tech-heavy Nasdaq posting a record open but the blue-chip Dow dipping on fears the economic recovery could stall. The Dow Jones Industrial Average fell 0.7%, the S&P 500 lost 0.08% and the Nasdaq Composite added 0.42%. The MSCI world equity index, which tracks shares in 45 nations, fell 0.16%. European stocks also retreated from record highs as the specter of a fresh COVID-linked lockdown in Germany and other parts of Europe cast a shadow over the global economy. Markets went into a tailspin after news that Austria will become the first Western European state to reimpose a full lockdown to tackle a new wave of coronavirus infections and signs that Germany might do the same.

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Hedge funds’ service provider selection “more important than ever before”

Brief: The selection of service providers – be they prime brokers, administrators or software systems – is more important than ever before following the seismic upheaval faced by hedge fund firms over the past 18 months. 2020 and 2021 proved to be “a different world” for hedge funds and the financial services industry more broadly, with firms being forced to evolve through working and trading remotely amid the Covid-19 pandemic, said Billy Murray, head of prime at InterTrader, during the service provider-focused panel at this year’s hedgeweekLIVE European Emerging Manager Summit.  That, in turn, has thrown the whole business of selecting and managing service provider relationships into ever-sharper focus for start-up hedge funds, which Murray said is “more important than ever before”.

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Pandemic puts cybersecurity and succession planning at the heart of due diligence process

Brief: This year’s hedgeweekLIVE European Emerging Managers Summit examined how start-up funds can best organise their approach to operational due diligence, with attendees hearing how cybersecurity and succession planning have emerged as key considerations as a result of the coronavirus pandemic. Sarah-Jane O’Sullivan, director at Willis Towers Watson, set out a range of corporate governance and front-, middle-, and back-office functions which remain central to the ODD process. Along with IT and HR, there has also been an increased emphasis on controls around cybersecurity as a result of Covid-19 and homeworking, according to O’Sullivan and panel moderator Thomas Deinet, executive director at SBAI. The session heard how the wholesale moves towards cloud-based tech have heralded sweeping changes to the operational due diligence process over the past decade, which had been further accelerated by Covid, in turn bringing added cybersecurity challenges.

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Why billionaire Jeff Vinik is “taking the over” on workers going back to the office

Brief: Since buying the Tampa Bay Lightning in 2010, Jeff Vinik has looked to transform downtown Tampa. The NHL team has improved on the ice, winning the 2020 and 2021 Stanley Cups, and he has spearheaded a more than $3.5 billion real estate development. While Vinik told CNBC’s Diani Olick that he is “no commercial real estate expert” during a CNBC Evolve Livestream on Wednesday, the 56-acre development is putting a big bet on office space with more than 1-million-square-feet of new space and the first office tower to be built in Tampa in over 25 years. That comes as the commercial real estate market is still trying to find its footing amid the pandemic as employers and workers embraced hybrid and virtual work arrangements. For example, a recent survey found that only 28% of Manhattan office workers are back at their desks and fewer than half will return by January.

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Thursday, November 18, 2021:

  • In the United States, White House Covid-19 Coordinator Jeff Zients said the Biden administration will spend billions of dollars to expand Covid-19 vaccine manufacturing capacity. Zients made the announcement on Wednesday, explaining that the plan is to invest in companies with experience in making mRNA vaccines, supporting them to expand production to meet the government’s needs. The Biden administration has been under pressure to increase the vaccine supply to other countries. Zients said the plan will make help increase the global vaccine supply in the short-term, while in the long-term it will establish domestic manufacturing capacity to prepare for future pandemics.
  • In Canada, the approval of the Pfizer vaccine for children ages five to 11 is expected to be announced by Health Canada on Friday. While the exact timeline is still unknown, officials say needles could go into arms before the end of the month. The children’s vaccine would be one third the size of the dose given to adults and children over 12. Pfizer’s submission was received by Health Canada on October 18, and earlier this week Moderna announced that they have asked Health Canada to approve their vaccine for children of the same age group. 
  • In the United Kingdom, the new version of the delta variant appears to be on the rise, as it accounted for 12% of samples gathered in the most recent government survey. Researchers on the React-1 study said there was a 2.8% daily growth rate for sub-variant AY.4.2 over the course of their study. The scientists analyzed more than 100,000 swabs taken across England between October 19 and November 5. The subvariant was initially thought to be more transmissible than the original delta variant, but recently experts have been challenging that claim. The study also found that AY.4.2 appears to be less likely to cause symptoms than the dominant delta strain.
  • The Netherlands are running out of Covid-19 tests, after reporting more than 20,000 new coronavirus cases for the second day in a row. These numbers are the highest they’ve been since the pandemic began. The latest surge in cases has caught officials by surprise, as more than 110, 000 people tested positive over the past week, an increase of almost 44% from the week before. The government announced a partial lockdown last week, including reducing the operating hours for restaurants and bars. So far about 85% of the Dutch population is fully vaccinated.
  • France’s top scientific adviser Jean-Francois Delfraissy says authorities might soon be asking companies to have their employees work from home, as case numbers surge in the country.  Though Delfraissy predicted the number of hospital admissions will rise to 1000-1200 per day in December, he said France has the right tools to withstand the fifth wave if everyone cooperates and follows public health measures, adding that it’s important to get vaccines and booster shots. France reported 19,778 new cases on Tuesday, the highest 24-hour increase since August 25, while the death toll currently rests at 91,345. 
  • In Australia, the city of Melbourne will experience more freedoms on Thursday night as authorities lift nearly almost all remaining restrictions. The state of Victoria is expected to reach the 90% full vaccination rate for the eligible population over the weekend. Under the new rules, pubs and restaurants can have unlimited patrons, there will be no limit on home gatherings, and stadiums can operate at full capacity. "Your life will be back to normal, you will be able to enjoy all the things that you have yearned for and missed," State Premier Daniel Andrews said during a media conference.

Covid-19 – Due Diligence And Asset Management

More chief executives join the 'Great Resignation'

Brief: CEO turnover spiked in the first half of 2021, as companies tapped new talent to navigate the aftermath of the COVID-19 pandemic and stressed-out chief executives sought a career change, a study from recruiting firm Heidrick & Struggles found. The findings illustrate how CEOs are not immune to the exhaustion that has swept hundreds of millions of workers worldwide since the onset of the pandemic and has pushed many to consider a new job or lifestyle in a wave dubbed "The Great Resignation." "Our belief is that it will only accelerate going into next year as people have delayed their retirements," said Jeff Sanders, co-managing partner of Heidrick's global CEO and board practice. There were 103 CEO appointments in the first half of 2021 out of 1,095 companies in 24 regions that Heidrick studied, including the United States, China and some European countries.

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HSBC CEO Says Won’t Jeopardize Hong Kong’s China Reopening Plan

Brief: The boss of HSBC Holdings Plc, the biggest bank in Hong Kong, said he won’t do anything that would put the city’s efforts to open up travel to mainland China at risk, even as criticism of the financial hub’s zero-Covid policy grows. In an interview at the Bloomberg New Economy Forum in Singapore, Chief Executive Officer Noel Quinn said he currently has no plans to visit the city, the lender’s biggest market. “It’s important for Hong Kong to establish what they need to establish with China on reopening,” he said in an interview with Francine Lacqua. “I don’t want to do anything that may jeopardize that. I would love to get back to Hong Kong as soon as I can and when the authorities feel it’s right for me to go back, I will.” The finance industry has been ratcheting up pressure on Hong Kong to ease its quarantine rules and abandon its zero-Covid policy amid concern it is becoming increasingly difficult to recruit and retain talent.

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The Way Asset Managers Worked Before the Pandemic Is Over

Brief: Asset managers need to rethink the way they hire, manage, and keep the best people — and fast. Industry executives agree that the pandemic has fundamentally changed the way people want to work and managers need to take those changes seriously and invest in training and support services to make it all function. On Thursday, Deloitte provided some evidence for the big post-pandemic shift. The so-called workplace talent model will continue to change next year, according to Deloitte’s 2022 investment management outlook report released Thursday. Based on a survey of 400 senior investment management executives from July to August of this year, the consulting firm expects that asset managers will invest what’s needed and strengthen their talent organizations. That includes everything from work-from-home policies, comprehensive training, and infrastructure; diversity equity and inclusion; and strategies to communicate a sense of purpose to employees, among other things.

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Asset managers becoming liquidity makers through technology, says report

Brief: The increased use of automated trading is turning asset managers into liquidity makers rather than liquidity takers and has prompted sell-side market makers to call for an overhaul of market rules.This is the finding of a new report into equity and fixed income markets commissioned by the FIA EPTA, the trade association for market-making firms.The report, Turning the Tables on Liquidity Provision, written by Redlap Consulting, found that the greater use of automated trading, driven by the pandemic, has given buy-side firms greater access to a wider range of trading partners and reduced their reliance on traditional sell-side market makers.More than two-thirds (67%) of asset managers now see transparency as a key factor in their selection of liquidity partners while a similar number (70%) said that data and technology play a greater role in deciding where they trade.

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Scotiabank plans phased return-to-office plan for mid-January

Brief: Bank of Nova Scotia plans to start a phased return-to-office plan for headquarters employees who are still working remotely on Jan. 17, marking a major commitment for a broad return from one of Canada’s largest banks. The return will be staggered for different groups, and the majority of head-office employees will be working in a hybrid model, spokesman Clancy Zeifman said in an e-mailed statement Wednesday. All employees at Toronto-based Scotiabank will be required to follow the bank’s mandatory vaccination policy. Canada’s banks have kept the majority of their headquarters employees working remotely as the country has maintained many of its pandemic safety measures into the fall. Scotiabank’s target date for a broad return was selected based on guidance from medical advisers and in consultation with the government, Zeifman said.

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.

Our briefing for Wednesday, November 17, 2021:

  • In the United States, 34 lawsuits challenging the Biden administration’s vaccine mandate were consolidated in a single federal appeals court on Tuesday. The mandate, which was announced by Biden in September, requires businesses with 100 or more employees to ensure their staff are fully vaccinated, by a deadline of January 4. The vaccine mandate is extremely controversial in the United States; opponents say it infringes on their individual liberties. The U.S. Court of Appeals for the Sixth Circuit will determine the fate of the policy, a court that has 11 Republican-appointed judges and five judges appointed by Democrats. Experts say it’s highly likely that the issue will reach the U.S. Supreme Court. 
  • In Canada, the federal government is set to announce changes to Covid-19 measures at the Canadian border. Health Minister Jean Yves-Duclos said on Tuesday that the government plans to make the announcement in the coming days. Currently, there’s a requirement for fully vaccinated travellers entering Canada to provide a negative Covid-19 test. The government has been under pressure for weeks to do away with the requirement, which is part of an order-in-council due to expire on Sunday. "Nov. 21 is the time at which these orders-in-council must be renewed and with the renewal will come announcements," Duclos said.
  • In the United Kingdom, coronavirus vaccine research has become a prime target for cyber attacks, according to the National Cyber Security Centre (NCSC). The watchdog said it handled a record 777 incidents between August 2020 and September 2021, and about 20% of the organizations that the agency had to support were in the healthcare sector, including hospitals and vaccine research centres. The NCSC says protecting the healthcare sector became a major priority over the time period, and that it will support the improvement of online security for an additional 3 million employees working in the sector. 
  • Germany is set to introduce stricter measures for unvaccinated people as cases across the country continue to rise. The Robert Koch Institute reported 52,826 new cases and 294 new deaths, bringing the country’s death toll to 98,274. Less than 70% of the German population is fully vaccinated, one of the lowest rates in Western Europe. Restrictions on unvaccinated people came into effect in areas like Berlin and Saxony, where hospitals are at risk of becoming overwhelmed. They have introduced their so-called 2G rules, which exclude unvaccinated people from all non-essential facilities. 
  • South Korea reported 3,187 new coronavirus cases, nearly matching a one-day record set in September. Questions are now being raised over whether the country eased pandemic restrictions too quickly, as they moved to “live with the virus” back in early November. Officials intended to restore pre-pandemic normalcy and had hoped that vaccination rates would keep hospitalizations and deaths down. There was however, a rise in fatalities among senior citizens who rejected vaccines or had waning immunity. In response, officials have pushed to speed up the administration of booster shots, shortening the interval period from six months to four months for people ages 60 and older and people in long-term care homes. 
  • In New Zealand, the city of Auckland will reopen to fully vaccinated people or those with a negative Covid-19 test on December 15.  Prime Minister Jacinda Ardern made the announcement as New Zealand reported 194 new coronavirus cases and one death, bringing the country’s death toll to 36 since the pandemic began. Some 82% of New Zealanders are now fully vaccinated, with the 90% threshold expected to be reached by mid-December. “Aucklanders have faced restrictions for an extended period of time to keep the rest of New Zealand safe. But with increased rates of vaccination it’s time to open up the ability to travel again,” Ardern said.

Covid-19 – Due Diligence And Asset Management

ECB Warns of Market ‘Exuberance’ as Economy Recovers From Pandemic

Brief: Increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to euro-area stability, the European Central Bank warned. While the economic recovery from the coronavirus crisis means near-term risks have dissipated, vulnerabilities are accumulating with potentially grave consequences down the line, according to the Frankfurt-based bank. “Concerns particularly relate to pockets of exuberance in credit, asset and housing markets, as well as higher debt levels in the corporate and public sectors as a legacy of the pandemic,” it said Wednesday in its Financial Stability Review, echoing former Federal Reserve Chairman Alan Greenspan’s description of the dot-com bubble in the 1990s.

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Private equity firms prevented from capital deployment due to conditions

Brief: Over two-thirds, or 67%, of private equity firms have cited market conditions over the last year as a key barrier to deploying capital, according to a new market report from Gallagher, although 57% said the out-turn over the period was either better than expected or exactly as expected. The report, which surveyed 150 private equity firms across the US, UK and Asia, also revealed this was significantly down compared to findings in last year's survey, in which 88% of firms said the out-turn was in line with their expectations. Limited capital capability was felt most acutely in the UK, with 72% of firms revealing conditions prevented capital deployment, compared to 62% of firms in Singapore, where it was least acute, possibly reflecting the harsher effects of the pandemic across Europe.

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Greed outpacing fear in world markets, Goldman Sachs CEO says

Brief: Greed is outpacing fear in world financial markets as investors respond to the pandemic recovery, Goldman Sachs Chief Executive David Solomon says, adding that such periods of exuberance are usually not long-lived. Solomon told Bloomberg's New Economy Forum in Singapore on Wednesday the global economy was facing a 'complicated time' as activity began to strengthen after the sudden shutdown in many parts of the world in 2020 because of coronavirus. The unprecedented levels of stimulus ordered by governments and central banks, he said, had led to exuberance in certain markets. "I think markets generally when I step back and I think about my 40 year career, there's been periods of time when greed has far outpaced fear. We were in one of those periods of time," Solomon told the Singapore event.

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London Firms Sign Up for Acres of New Offices to Lure Workers

Brief: Corporate executives are signing up for acres of new office space in London as they attempt to lure workers back to their desks. Demand for offices in the U.K. capital has rebounded sharply with businesses committing to 819,000 square feet of new space in the six months through September, British Land Co. said in a statement Wednesday. That’s the equivalent of more than 10 soccer fields and includes a new headquarters for law firm Allen & Overy at the developer’s 1 Broadgate development, which is fully pre-leased ahead of completion, and space to Facebook-owner Meta Platforms Inc. There is a “renewed optimism in London offices with occupiers more confident of committing to space as their employees return to the office,” the landlord said in a statement. “Demand is firmly focused on the very best space, with an emphasis on sustainability, wellness, shared and flexible space and excellent transport connections.”

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Global dividends close in on pre-pandemic peak

Brief: Global dividends are expected to hit pre-pandemic levels by the end of the year, according to Janus Henderson, as third quarter figures surge.This is particularly the case for companies in Europe, parts of Asia and emerging markets, the asset management firm said.Dividends jumped 22% year-on-year reaching $403.5 billion, an all-time high for third quarter figures.The majority of companies globally either raised their dividends or held them, while mining dividends were found to drive two thirds of the increase. Recently restored banking dividends also made a significant contribution. Janus Henderson said dividends are now expected to surpass the pre-pandemic peak by the end of December 2021.

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Contact Castle Hall to discuss due diligence
 
Castle Hall has a range of due diligence solutions to support asset owners and managers as our industry collectively faces unheralded challenges. This is not a time for "gotcha" due diligence - rather this is a time where investors and asset managers can and should work together to share best practices and protect assets. Please contact us if you'd like to discuss any aspect of how Covid-19 may impact your business.