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Our briefing for Friday April 24, 2020:
Apr 24, 2020 3:41:09 PM
- In what is clearly the most bizarre news headline to come out during the coronavirus pandemic, the company that makes Lysol and Dettol is urging customers not to ingest its cleaning products. What seems like common sense is making headlines due to a news briefing on Thursday where United States President Donald Trump suggested an injection of disinfectant as a possible solution to the coronavirus. President Trump claimed on Friday the comment was meant as a sarcastic remark to reporters in the room.
- Canada’s largest province is working on the framework on what a reopening will look like. Ontario Premier Doug Ford said the plan will come early next week, but the province is still facing serious issues with case counts of 500 or more on a daily basis and requesting military backup at five of the hardest hit nursing homes in the area.
- A Daily Telegraph report in the United Kingdom has Boris Johnson ready to reassume his duties as leader of the country as early as Monday. Downing Street officials were casting doubt on that timeline though noting while Johnson has been kept up to date on the coronavirus response in the UK, he has yet to work on official papers as usual and is still being guided by his medical team.
- The leaders of France and Germany have teamed up with the World Health Organization (WHO) on an $8 billion-dollar plan to accelerate the race for the development of a coronavirus vaccine. French President Emmanuel Macron and German Chancellor Angela Merkel stressed once its available, the vaccine would be distributed to all those who need it, just not the country that develops it first. This comment was made due to the fact UK Health Secretary Matt Hancock stated earlier in the week Britons should be at the front of the line if a vaccine was created their first.
- In the Philippines, President Rodrigo Duterte threatened enforcement of martial law across the country, citing attacks on soldiers delivering aid by communist rebels. President Duterte also expanded its Manila lockdown until May 15th and said measures will be expanded to other regions with large outbreaks, while being modified in lower-risk areas. Those modifications could include a partial resumption of work, transport and commerce. The Philippines are closing in on 7,000 total infections with 462 deaths.
Covid-19 – Due Diligence And Asset Management
Hedge Funds Ruled Ineligible for U.S. Small Business Rescue
Brief: Hedge funds aren’t eligible for a U.S. rescue loan program, the government made clear Friday, potentially quelling a barrage of outrage over the possibility that well-heeled traders might beat out struggling small businesses for emergency funding. The Small Business Administration, in consultation with the Treasury Department, determined that because hedge funds are primarily engaged in speculative investments, the firms shouldn’t be entitled to Paycheck Protection Program loans. The prohibition also applies to private equity firms, according to guidance posted on Treasury’s website. The Trump administration does not believe that Congress intended those types of businesses, which are generally ineligible for SBA loans under existing regulations, to qualify, according to the guidance. Concern that hedge funds might tap the PPP program amid the coronavirus crisis has triggered a backlash on Capitol Hill and around the country.
NYSE Eyes Reopening Trading Floor, but Timeline Still Unclear
Brief: The New York Stock Exchange plans to reopen its iconic trading floor, which is shuttered due to coronavirus concerns, as soon as possible, but it has not yet set a date to do so, the NYSE and people familiar with the matter said on Friday. “The NYSE will reopen its trading floors when we can do so with reduced risk and without adding strain on local healthcare systems,” exchange spokesman Farrell Kramer said in a statement, without giving further details. The exchange operator also has an options trading floor in San Francisco that is closed due to the pandemic. The NYSE, which is owned by Intercontinental Exchange Inc (ICE.N), held a conference call with NYSE staff and the traders who work on the floor on Wednesday to discuss an eventual reopening, but did not set any dates, according to two people who were on the call.
World’s Biggest Finance Firms Consider Shrinking Offices Due to Coronavirus Crisis
Brief: Finance workers have had to adapt to hot-desking, “smart offices” and meeting pods. Next in line: much less office space. Some of the world’s biggest finance firms are looking at slashing the size and numbers of their swanky offices as the coronavirus crisis has forced firms to radically change their working practices, Financial News can reveal. Major employers in the finance sector - including investment banks, law firms and accountancy giants - are already planning for a post-pandemic world in which fewer staff will work in the office full-time. For investment banks, which have typically relied on their employees working long and unpredictable hours in the office, the switch to remote working has been particularly radical, but some changes could stick.
Barrack Says Real Estate in ‘Chaos’ as Laws Waived on Rent, Debt
Brief: Tom Barrack said the U.S. property market is in “chaos” and still on the verge of collapse because the federal government and local authorities are allowing renters and homeowners to skip payments because of the coronavirus. “We haven’t had a crisis like this,” Barrack, chief executive officer of Colony Capital Inc., said in an interview Friday on Bloomberg Television. “We’ve never had one where we just have a government taking of revenue.” The stimulus bill passed by Congress last month included a provision allowing borrowers to defer payments for as long as a year without penalty on federally backed mortgages. At the same time, cities and states throughout the country have suspended evictions and foreclosures to help the tens of millions of Americans who’ve lost their jobs.
Sixth Street Targets More Than $6 Billion to Bolster War Chest
Brief: Sixth Street Partners is seeking more than $6 billion for an evergreen fund at the onset of what could become a prolonged period of market turmoil set off by the coronavirus pandemic, according to people with knowledge of the matter. The firm, founded by former Goldman Sachs Group Inc. partner Alan Waxman and nine others, began discussing its so-called adjacent opportunities vehicle with select investors in recent weeks, said the people, asking not to be identified because the talks are private. An upper limit for the fundraising hasn’t been set, one of them said. The $12 billion fund has been closed to new capital since 2017.
Franklin’s $4.1 Billion Fund Halt Shows Lasting Credit Pain
Brief: Franklin Templeton will wind up $4.1 billion of Indian debt funds after a liquidity crisis compelled the firm to freeze investor withdrawals in the South Asian nation. The asset manager’s surprise announcement underscores persistent stress in credit markets as the coronavirus pandemic wreaks havoc on the global economy. It marked the biggest-ever forced closure of Indian funds and fueled worries of a renewed wave of withdrawals from similar products. Indian corporate bonds slumped on the news, while banks and fund managers paced declines in the country’s stock market… The firm said it’s shutting down the Franklin India Low Duration Fund, Franklin India Dynamic Accrual Fund, Franklin India Credit Risk Fund, Franklin India Short Term Income Plan, Franklin India Ultra Short Bond Fund and Franklin India Income Opportunities Fund.
