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Our briefing for Monday March 23, 2020:
Mar 23, 2020 4:16:29 PM
- In the United States, as of Monday afternoon 12 states have now issued stay-at-home orders as the country tries to limit the spread of the coronavirus. They are California, New York, Illinois, Connecticut, New Jersey, Maryland, Louisiana, Ohio, Delaware, Michigan, Massachusetts and West Virginia.
- United States Surgeon General Dr. Jerome Adams gave a somber warning on Monday during an appearance on an American news network stating, "I want America to understand — this week, it's going to get bad.”
- The World Health Organization (WHO) seems to echo the US Surgeon General’s statement, noting the spread of the virus is rapidly accelerating around the world.
WHO says it took 67 days from the first reported case to reach 100,000 cases, 11 days for the second 100,000, and just four days for third 100,000 cases. There are now over 350,000 cases of coronavirus worldwide.
- In Canada, after a weekend of media reports showing some people not really listening to the social distancing initiatives put in place by provincial and federal officials, the tone started to change on Monday. Prime Minister Justin Trudeau told Canadians to go home and stay home and warned stiffer enforcement measures could be imposed if people continue to refuse to listen.
- Ontario and Quebec have outlined new social distancing measures. Ontario Premier Doug Ford is ordering all non-essential stores and services to close starting Tuesday at 11:59 PM, while Quebec is shutting down all in-person business activity, except those offering food and essential services until April 13th.
- India has imposed a full curfew in the capital city of Delhi, its financial capital Mumbai and other large parts of the country as it tries to flatten the curve of the virus spread. Therefore, under more strict orders, no citizen other than government employees will be permitted outside their homes without a police-issued curfew pass. That means workers in private hospitals, grocery stores, pharmacies and other essential services must obtain these passes before returning to work.
- In the United Kingdom, the Foreign Secretary has urged its citizens to return home from abroad as soon as possible while commercial flight options are still available. There are concerns air routes could be closed within the next 48 hours without warning. The country has also suspended rail franchise agreements for the next six months to avoid train companies collapsing due to the coronavirus.
- Italy’s overall rate of infections fell for the third straight day, a little bit of good news to a country that badly needs it. Over the weekend, the country saw its deadliest day yet, with close to 800 people dying from the virus on Saturday. Close to 6,100 have died in Italy due to the coronavirus.
Coronavirus – Due Diligence And Asset Management
Brookfield CEO Sees Coronavirus Market Meltdown as ‘Manageable’
Brief: The head of Brookfield Asset Management Inc. said markets volatility created in the wake of the coronavirus pandemic is much more manageable than previous meltdowns. “For us, compared to the direct hit we took on 9/11, this uncertainty and volatility feels manageable,” Bruce Flatt, Brookfield Chief Executive Officer, said in a letter to shareholders Monday. “In 2008, with the banking system failing, real asset owners didn’t know if many lenders were going to exist in the future. Today, the banking system is in far better shape. It never feels very good to have this degree of chaos, but this will pass.”
What Fund Managers Care About Amid Coronavirus Chaos
Brief: With most of the sectors on a sharp downward spiral, the main consideration for most fund managers right now is the strength of a company’s balance sheet, according to Peter Toogood. The chief investment officer at Embark Group, who has the same role at The Adviser Centre consultancy, said the current crisis was "far worse" than 2008 because the whole chain of economic activity was broken. He said: “There has been an almost complete cessation of economic activity, no one has seen this before.
ASIC Recalibrates its Regulatory Priorities to Focus on COVID-19 Challenges
Brief: In coordination with the Council of Financial Regulators, ASIC will focus its regulatory efforts on challenges created by the COVID-19 pandemic. Until at least 30 September 2020, the other matters that ASIC will afford priority are where there is the risk of significant consumer harm, serious breaches of the law, risks to market integrity and time-critical matters. ASIC is committed to working constructively and pragmatically with the firms we regulate, mindful they may encounter difficulties in complying with their regulatory obligations due to the impact of COVID-19.
Bruised Hedge Funds Ask Clients for Fresh Cash to Buy the Dip
Brief: First they lost money. Now hedge funds want clients to risk even more cash on the bets that caused the pain. LMR Partners, Citadel, Baupost Group and Capital Four Management are trying to persuade clients to inject money into their funds after taking a hit in the coronavirus-fueled market turmoil. Capula Investment Management has had talks with some investors as it considers raising fresh capital, according to people familiar with the matter.
Goldman Injects $1 Billion into Own Money-Market Funds After Heavy Withdrawals
Brief: Goldman Sachs Group Inc (GS.N) poured more than $1 billion into two of its prime money-market portfolios this week due to heavy investor withdrawals, according to a filing with the U.S. securities regulator. The Wall Street bank purchased $722.4 million in assets from its Goldman Sachs Financial Square Money Market Fund (GPMXX.O) and $301.2 million from its Goldman Sachs Fund Square Prime Obligations Fund.
T. Rowe Price Employee Tests Positive for Coronavirus, Sanitizing of Baltimore Headquarters Underway
Brief: An employee of T. Rowe Price Group in Baltimore has tested positive for the new coronavirus and efforts to sanitize the Baltimore headquarters are underway, a spokesman said Friday. "We are in regular communication with this associate and are supporting them during this time,” said Brian Lewbart, a spokesman for the global money management firm. The company said it notified all of its employees of the positive case. It’s requiring all those who work near or who had been in direct contact with the employee to self-quarantine for 14 days, he said.
