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Our briefing for Friday March 27, 2020:
Mar 27, 2020 3:16:22 PM
- The United States now have the most coronavirus cases of any country in the world, surpassing Italy and China. America has at least 90,700 cases, over 1,300 deaths and hot spots emerging in large cities including Chicago, Detroit and New Orleans.
- Meanwhile, the House of Representatives on Friday passed the $2 trillion coronavirus response stimulus package. Next on the agenda will be President Donald Trump’s signature before it becomes law.
- During a news briefing on Friday, Canadian Prime Minister Justin Trudeau announced more help for small and medium-sized businesses who are dealing with the fallout from the coronavirus.
- The Prime Minister increased the wage subsidy from 10 per cent to 75 per cent, which brings Canada more in line with other countries throughout the world and guaranteed interest free loans for the first year. The wage subsidies will be backdated to March 15th, 2020. Trudeau said more details on the program would be released on Monday.
- In the United Kingdom, Prime Minister Boris Johnson has been diagnosed with the coronavirus after experiencing mild symptoms which included a fever and cough. Downing Street said Johnson would self-isolate for the next seven days, and officials insisted Johnson would continue to lead the country. If Johnson somehow couldn’t lead, Dominic Raab, the UK’s foreign secretary and first secretary of state would step in.
- The UK’s health secretary Matt Hancock also tested positive for the coronavirus as the country’s cases continue to double every three to four days.
- The World Health Organization announced Friday that patients in Spain and Norway will be the first to be enrolled in a coronavirus drug trial. The trial will test the effectiveness of four different drug combinations in treating Covid-19.
- Italy has suffered its deadliest 24-hour period due to the coronavirus after deaths almost reached 1,000 in one day.
- In France, the country has extended its nationwide lockdown until April 15th and could be extended further if the situation requires it. The peak of the coronavirus wave is expected to hit the Paris region within days after the country recorded its highest daily death total on Thursday.
- Australian Prime Minister Scott Morrison announced on Friday enforcement of self-isolation for citizens returning from overseas, quarantining arrivals in hotels around the country. Morrison stated the Australian Defence Force would be deployed to help enforce the self-isolation rules as the country has surpassed 3,000 cases after less than 100 at the start of March.
Covid-19 – Due Diligence And Asset Management
Goldman Sachs. Morgan Stanley to Take Control of Mainland Joint Ventures as China Opens up Financial Sector
Brief: Goldman Sachs and Morgan Stanley received regulatory approval on Friday to take control of their Chinese securities joint ventures, becoming the latest foreign banks to take advantage as China opens up its financial services sector. In separate announcements on Friday night, the American banks said the China Securities Regulatory Commission had approved their bids to own majority stakes in their securities joint ventures, Goldman Sachs Gao Hua Securities Company and Morgan Stanley Huaxin Securities.
Billionaire Investor Bill Ackman Explains Himself
Brief: It’s the most eventful 0.2% gain of Bill Ackman’s career. The billionaire investor entered 2020 long a handful of brand name companies like Berkshire Hathaway, Hilton Worldwide and Chipotle. But his $6.5 billion in assets firm, Pershing Square, weathered what was the quickest 30% market drop in a century after Ackman decisively hedged his portfolio from the coronavirus pandemic. In late February after weeks of fretting about the effects of the pandemic, Ackman paid $27 million in premiums to buy credit default swap insurance on investment grade and high yield bond indices, judging that their tight spreads were the most mis-priced way of playing the looming financial chaos. He was right. Financial markets went haywire in March and the hedges ultimately yielded a $2.6 billion payout for Pershing Square.
Hedge Fund Manager to Lead Norway Sovereign Fund After $124 Billion Loss
Brief: Norway’s sovereign wealth fund, the world’s largest, named a London-based hedge fund manager as its new chief executive on Thursday and said it had lost $124 billion (104 billion pounds) this year as stock markets tanked due to the coronavirus pandemic. Norwegian-born Nicolai Tangen, until now chief executive of AKO Capital, which he established in 2005, will take the helm in September, succeeding Yngve Slyngstad who announced his resignation last year.
Morgan Stanley CEO James Gorman Tells 60,431 Employees: ‘Your Jobs are Secure' This Year
Brief: Morgan Stanley CEO James Gorman told his employees that despite the upheaval caused by the coronavirus pandemic, their jobs will be secure through this year. “I am sure some, if not many, of you are worried about your jobs,” Gorman said Thursday in a staff memo. “While long term we can’t be sure how this will play out, we want to commit to you that there will not be a reduction in force at Morgan Stanley in 2020,” Gorman said. “Aside from a performance issue or a breach of the Code of Conduct, your jobs are secure.”
This Hedge Fund Manager is Up 27% in a Market Down 30%
Brief: Roy Niederhoffer loves a good crisis. The 54-year-old hedge fund manager’s firm, R.G. Niederhoffer Capital, which manages about $350 million in assets currently, often does best when the stock market is at its worst. His Manhattan-based firm was one of the industry’s top performers during the past decade’s global financial crisis, and it is once again leading many of its peers in the market turmoil caused by the coronavirus pandemic. So far, his company’s flagship diversified fund, which invests in stocks, bonds, commodities, and currencies, is up 27% for the year, after fees, at a time when the overall U.S. stock market is down 30%. Its second fund, which trades only currencies and bonds, is up almost 18% after fees.
Man Group Seeks Reward as Defaults set to Spike on Virus
Brief: A dramatic increase in defaults during the next year due to the coronavirus will create a big opportunity for distressed debt investors, according to the world’s biggest publicly listed hedge fund firm. Money managers at Man Group Plc are intrigued by what they say could be the largest global distressed credit cycle in a generation. It all happened in just a month as the public health crisis rippled through economies all over the world, prompting a sell-off in sovereign and corporate bonds. That means even some stronger countries and companies could get caught up in the process, according to Patrick Kenney and Santiago Pardo, money managers at the firm’s GLG unit.
