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Our briefing for Friday December 18, 2020:
Dec 18, 2020 4:01:46 PM
- Vice President of the United States, Mike Pence, became the highest-ranking U.S. official to receive a coronavirus vaccine on Friday. In a live television appearance, Pence, his wife Karen and the surgeon general of the United States, Jerome Adams, all received the first of two doses of the Pfizer vaccine. The on-air stunt was an attempt to convince the American public that the vaccine is indeed safe for general use. Pence confidently proclaimed that he “didn’t feel a thing,” and that the “the American people can be confident: We have one and perhaps within hours two safe vaccines.” His remarks came as the American Food and Drug Administration is expected to validate a second COVID-19 vaccine from pharmaceutical company, Moderna, later in the day. Surprising absent from being publicly vaccinated is sitting U.S. President Donald Trump, who has remained relatively quiet about the massive medical breakthrough. As of Friday, Trump has yet to hold a public event related to vaccine’s distribution.
- According to Prime Minister Justin Trudeau, the majority of Canadians can expect to be vaccinated against COVID-19 by September 2021. However, immunizing the entire population is still a giant task, one that could see Canadian borders closed for years to come. “It’s the old adage, ‘no one is safe until everyone is safe,’” Raywat Deonandan, an epidemiologist with the University of Ottawa said, meaning that until most other countries have been vaccinated, Canadians should expect to remain in the confines of the country. COVAX, an international initiative aimed at providing coronavirus vaccines to low-income countries has suggested the current distribution model could leave poorer countries without access to a vaccine until at least 2024. The COVAX program cited multiple hurdles in the way of mass-distribution of the vaccine including lack of funding and supply-chain risks.
- A survey from the United Kingdom’s Office for National Statistics has revealed that over two-thirds of the country intends to form a Christmas bubble including members from up to three households. The U.K. government has lifted some restrictions ahead of the holiday season, but experts are suggesting that this might not have been the right call. The World Health Organization’s regional director for Europe, Dr Hans Kluge, said “there remains a difference between what you are being permitted to do by your authorities and what you should do.” With most of the country entering tier three lockdown over the weekend, Prime Minister Boris Johnson has refused to rule out another large-scale lockdown after the Christmas holiday. In the last 24 hours, the country has diagnosed 24,507 new cases with another 1726 people being admitted to hospital since yesterday.
- A cluster of new cases in Sydney, Australia has prompted Victoria’s Health Minister, Martin Foley to urge the public to avoid the area and has suggested that travel may be restricted if a person is found to have been in contact with someone from the Sydney area. As new cases of the virus have been spreading rapidly in Sydney, other states have now deemed it unsafe to travel to. “Don't come from Sydney if you're planning to come to Melbourne,” Foley says. “Don't go to Sydney if you're [already] planning to go to Sydney. It won't be a holiday. It won't be a Christmas.” New South Wales Premier Gladys Berejiklian is urging the public to comply with mask wearing protocols and has limited travel to Sydney’s northern beaches as the number of new cases grew by 10 overnight to a total of 28 in the area. Meanwhile, Queensland, Victoria, Western Australia and Tasmania have all introduced some measure of border restrictions on Friday.
- Despite French President Emmanuel Macron testing positive for COVID-19 yesterday, a top government advisor said in a statement that it will take more time than expected for people in France and the rest of Europe to receive a vaccine. Immunologist and government adviser Jean-Francois Delfraissy said "the production of vaccines will be slower than envisioned 15 days or three weeks ago. We will not face a vaccine shortfall but we will have something that is more spread out over time." European nations have not yet been given access to the Pfizer vaccine like the U.K. and Canada, as they await the approval from the European Medicines Agency, which expects to have the approval passed before the end of December. France has recorded the most coronavirus cases in Europe with estimates ranging around 2.4 million people having been infected. "Vaccines are a major source of hope,” said Delfraissy. “But if you look at the vaccination capabilities that we will have in France and elsewhere in Europe, we will need time.”
Covid-19 – Due Diligence And Asset Management
J&J enrolls about 45,000 participants for late-stage Covid vaccine trial
Brief: Johnson & Johnson said on Thursday it has enrolled about 45,000 participants for the first late-stage trial of its Covid-19 single-dose vaccine candidate and that it expects interim data by late-January. The company, however, is lagging rivals Pfizer and Moderna in the race for a vaccine to combat the Covid-19 pandemic that has infected about 75 million people globally. J&J’s study, named Ensemble, is being conducted by its unit Janssen, the drugmaker said in a statement. While seven countries have already authorized the emergency use of Pfizer and German firm BioNTech’s candidates, Moderna’s rival vaccine was set for regulatory authorization this week in the United States.
Lloyds Banking Group cancels bonuses after profit drop
Brief : Staff at Lloyds Bank won't be receiving bonuses for this year after the pandemic hit profits at the lender. It said the decision was not a reflection of the work its employees had done this year and that lower-paid staff will get pay rises above inflation. Bankers were told in a memo on Thursday first reported by the Financial Times. The bank will not meet the minimum threshold of profit for 2020 to make the payouts. The bank has said before that if profit for 2020 was more than 20% below its target bonuses would be cancelled. The lender will announce 2020's earnings on 24 February. "In 2021 we're making above-inflation pay increases for most of our people and these will be geared toward those colleagues on lower pay," the bank said in a statement. "Given our expected levels of profitability for 2020, we are unable to pay group performance share (or bonus) awards to our people for this year.
Small lenders lose out as Big Six banks capture bulk of Canadians' pandemic savings
Brief: Canadians are stuffing savings into bank deposits at some of the fastest rates since the global financial crisis, but smaller lenders are losing out to bigger rivals, facing a tough time when the economy and lending begin to recover. The biggest banks grew personal deposits by 21 per cent in the three months to Oct. 31 from a year earlier to a record $1.7 trillion (US$1.3 trillion), driven by government stimulus and business closures that have crimped spending. Smaller lenders, however, struggled to record growth figures in the single digits, despite offering higher interest rates, as savers stuck with familiarity and size in an uncertain economic climate, analysts said. “If you have to pay more for deposits in a weak lending environment, it makes it tough,” said Avenue Investment Management Portfolio Manager Bryden Teich.
IFC invests USD 30 million in Biological E Ltd
Brief: International Finance Corporation, a member of the World Bank Group, on Thursday said it is providing a loan of up to USD 30 million (around Rs 220 crore) to pharma company Biological E Limited. The loan will support the pharmaceutical firm's expansion of low-priced, generic vaccines for routine immunisation of children and to boost capacity for manufacturing any future COVID-19 vaccine, it added. An investment in one of India's top vaccine manufacturers BioE will expand access to low-cost vaccines for children in developing countries and help increase the production of a COVID-19 vaccine when developed, a key step in saving lives and restarting economies, IFC said in a statement. "IFC, a member of the World Bank Group, is providing a senior loan of up to USD30 million to BioE to support the Hyderabad-based company's expansion of its range of low-priced, generic vaccines for routine immunisation of children," it added.
Private Equity Offers Survival Tactic to Fund Industry in Crisis
Brief: When Niklas Ringby spots a stock worth buying, he ignores decades of diversification advice that most investors live and die by. In the words of hedge fund legend Stanley Druckenmiller, he bets the ranch. The EQT AB money manager’s approach of wagering on just a handful of stocks may sound like excessive risk-taking to a generation of punters warned against chucking all their eggs in one basket, but it’s churning out bumper profits. The $1 billion fund he runs from Stockholm with Fredrik Atting for the private equity giant has gained 35% this year, while European stocks are down 5%, according to an investor letter. That’s on top of the 45% it returned last year. Ringby’s high-stakes strategy may offer a potential way forward for an industry in crisis. Stockpickers are persistently failing to beat their benchmarks and rapidly ceding ground to low-cost passive funds that just mimic an index. In a world awash with data and computer-driven trading where price-sensitive information is instantly factored into share values, active funds must find a way to stay relevant. That means depth instead of breadth in stockpicking and bolder, high-conviction long-term bets.
Emerging Market Hedge Funds Are Outperforming In 2020
Brief: Although emerging markets had a difficult start to the year because of COVID-19's source in China, they have rebounded nicely, giving emerging markets (EM) hedge funds a boost. Hedge funds, in general, had a rough October, as the Eurekahedge Hedge Fund Index declined 0.5%. However, they beat the MSCI ACWI, which fell by 2.29%. Morning commuters wearing protective masks walk past Chinese flags displayed along Nanjing Road in Shanghai, China, on Friday, October 9, 2020. China's yuan strengthened, and stocks rose on mainland exchanges in a positive start to the month for traders. Emerging markets hedge funds are outperforming their developed markets (DM) counterparts this year, according to data from Eurekahedge. EM hedge funds gained 5.11% during the first nine months of the year. For comparison, North American hedge funds were up 3.00%, while European funds were down 1.51%, and Japanese funds were down 3.37%.
