.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line).png "CH Diligence (thicker line).png")
Our briefing for Monday March 8, 2021:
Mar 8, 2021 3:53:04 PM
- In the United States, the Centers for Disease Control and Prevention (CDC) unveiled new guidelines for fully vaccinated Americans. According to CDC Director, Dr. Rochelle Walensky, individuals fully inoculated against COVID-19 can meet in small groups indoors without wearing masks but should keep wearing them outside of the home. “It’s important to realize…. that still over 90 percent of the population is not yet vaccinated, and that is our responsibility to make sure, in the context of 60,000 new cases a day, we protect those remain unvaccinated and vulnerable,” Dr. Walensky said. Elsewhere in the country, White House Press Secretary Jen Psaki told reporters on Monday that President Joe Biden will give his first prime-time address on Thursday to mark the one-year anniversary of COVID-19 shutdowns.
- Similar to the United States, Canadian Prime Minister Justin Trudeau announced on Monday the federal government is designating March 11th – a national day of observance to commemorate those who have died due to COVID-19. The March 11th date signifies the one-year anniversary of the World Health Organization (WHO) declaring COVID-19 a global pandemic. Prime Minister Trudeau is calling on Canadians to think this week about those who have died and the health-care and other essential workers who have been on the front line of the fight against the coronavirus. More than 22,000 Canadians have lost their lives due to COVID-19.
- The United Kingdom started the first of their four phases towards a full reopening with children returning to the classroom in England on Monday. Prime Minister Boris Johnson marked the occasion, praising teachers and parents, stating it signified a “big day and an emotional day” for millions of families across England. However, it wasn’t all good news as The Times reported National Health Service chiefs have warned they will start cutting patient care unless Chancellor Rishi Sunak finds £8 billion this week for extra COVID-19 costs. Hospitals have accused Sunak of “robbing NHS budgets” following news of ministers one per cent pay rise offer to frontline staff.
- Italy’s government is considering tighter coronavirus curbs, including making the entire country a high-risk “red zone” at least during the weekends to counter the recent surge. “The second wave never stopped, we’re seeing a very strong pickup due to the variants, which is leading us to take measures that are ever-more restrictive,” Health Minister Roberto Speranza told an Italian newspaper. Italy currently has a three-tier system in place that classifies regions by low, medium and high-risk based on the number of cases. The system involves closures of bars and restaurants, and strict limits on people’s movements, depending on the tier they fall under.
- Over the weekend, China announced they will launch a programme aimed to help vaccinate its nationals abroad against the coronavirus, while also introducing a digital health passport for global travel. The announcements were made by Foreign Minister Wang Yi and said the vaccination programme would “help and fight for” Chinese nationals outside the country to either receive a Chinese-made vaccine, or one made by other countries. As for the proposed health passport – it would allow China and other countries to verify the result of a traveller’s COVID-19 nucleic acid test and whether that person had been vaccinated against he the coronavirus. The proposed passport would launch on the premise of “fully protecting personal privacy”, but the foreign minister didn’t elaborate on how that would be achieved.
- Australia is on a remarkable run when it comes to local transmission of the coronavirus. According to the Australian Associated Press, the state of New South Wales, home to Sydney, reached 50 straight days without a locally transmitted COVID-19 case on Monday. Victoria state extended its run to 10 days, which is also the same number for the national mark. The largest immunization program in the nation’s history is a few weeks in and as of Sunday, 81,000 Australians have been vaccinated, but that is below the federal government’s target. The reason being given is the complicated logistics involved in the rollout plan, coupled with the initial speed, which has started with front line workers and nursing home residents.
Covid-19 – Due Diligence And Asset Management
Apollo Global to buy Insurance Affiliate Athene for $11 Billion
Brief : Apollo Global Management Inc said on Monday it will merge with Athene Holding Ltd in an $11 billion all-stock deal, bringing in-house an annuities provider that helped turn it into one of the world’s largest corporate credit investors. Apollo has been getting paid lucrative fees by Athene, in which it controls a 35% stake, for more than a decade, providing asset allocation services and directly managing a portion of Athene’s assets across its investment platform, primarily in its ever-expanding credit business. Yet Athene’s shares underperformed the insurance sector following its stock market debut in 2016, prompting a bid from Apollo for its assets. Apollo estimated the tax-free combination could result in its earnings more than doubling from 2020. Its existing stake in Athene did not contribute to earnings under accounting rules, despite representing 40% of Apollo’s assets under management and 30% of its fee-related income. A merger would allow Athene’s business and assets to be integrated into Apollo’s, providing both sides with enhanced earnings potential and a simpler ownership structure going forward, Marc Rowan, Apollo’s incoming chief executive officer, told an analysts call.
Takeovers by UK Investors in Continental Europe Fell by 30 Per Cent in 2020
Brief: The number of takeovers by UK acquirers of continental European businesses fell 30 per cent from 488 in 2019 to 342 in 2020 as Brexit and Covid-19 hampered deal activity, shows new research from Accuracy, the global independent financial and strategic consulting firm. In comparison, the overall number of deals targeting continental European companies fell by 27 per cent from 6,665 to 4,843 over the same period. The number of acquisitions by US businesses in continental Europe declined by 25 per cent in the same period. Accuracy says concerns over the potential impact of a no-deal Brexit deterred UK corporates from making purchases of European businesses last year. The shock to the economy caused by the Covid-19 lockdown reduced the number of deals across Europe. However, deals from UK businesses targeting European companies fell even more rapidly than overall deal numbers across all countries. Covid-19 travel restrictions between the UK and continental Europe also made it harder for UK based executives to meet face-to-face with possible bid targets on mainland Europe.
Vaccines Keeping Risk on Table – For Now
Brief: A year into the coronavirus crisis, there's broad consensus among asset owners that vaccination programs will give risk assets a further lease on life this year but less agreement about the pandemic's longer-term effects on portfolio construction. The short-term picture appears bright. Continued momentum on vaccines should help the global economy rebound strongly midyear as households in the U.S. and Europe emerge from lockdown, predicted Rupert Watson, London-based head of asset allocation with Mercer Investments. "Everybody I know wants to go and do stuff, whether it's go on holiday, go to a bar, catch up with friends, see relatives. And with the massive buildup in savings over the past year, "people have the cash to do it," Mr. Watson said. That's not to say the horizon lacks clouds — such as a potential sustained uptick in inflationary pressures — but for now they remain distant.
Profile: How Viable is the Office Sector?
Brief: Experts at real estate specialist AEW look at a recent office acquisition in Barcelona and speak about the viability of the sector in a post-Covid world. In November last year, AEW made its third investment in Barcelona’s office market with the acquisition of a development in the city’s trendy @22 area, also known as Barcelona’s ‘innovation district’. Located in the old industrial neighbourhood of Poble Nou, @22 has seen ongoing redevelopment with the aim of creating a technological hub of for the city. At the time of the acquisition, AEW fund manager Carsten Czarnetzki said, regardless of the Covid-19 pandemic, the need to bring people together to interact face-to-face remains. “Ultimately this means that, while the way offices are used will change, they will remain integral to our working lives,” he said. But compared to 2019, office uptake in the Catalan city nearly halved in 2020, the fund manager highlighted, speaking to Funds Europe earlier this year. Despite this, the firm remains confident in the sector. “With occupiers actively assessing their short, medium and long term space requirements in the context of an ongoing pandemic, we see a long term shift towards larger space requirements per employee, offset by a higher home office component,” explains Czarnetzki.
Barclays Plans to Cut Around 60 Jobs at Investment Bank
Brief: Barclays Plc is planning job cuts at its corporate and investment bank as part of its cost-saving measures, according to people with knowledge of the matter. The reductions will affect around 60 jobs, including some senior roles in the U.S. and other countries, said one of the people, who asked not to be named discussing private information. A spokeswoman for Barclays declined to comment. The London-based bank’s securities division reported a 45% annual rise in markets revenue last month, beating forecasts as well as rival global investment banks. But Covid-19 has slammed its lending businesses -- an impact Barclays has said will likely endure this year. Like other banks, Barclays paused job losses during the pandemic, but mounting cost pressures have led firms to start resuming these cuts. In London, Societe Generale SA is planning to cut about 80 positions as it scales back securities services to asset managers, banks and brokers.
ECB Pandemic Purchases Stay Muted Amid Drag of Maturing Debt
Brief: The European Central Bank kept up a muted pace of pandemic bond-buying for a second week as maturing debt acted as a brake on officials’ stimulus efforts. The institution settled 11.9 billion euros ($14.2 billion) of net buying under its Pandemic Emergency Purchase Program last week, similar to the 12 billion-euro outcome of the prior week. That’s well below the average purchase pace of 18 billion euros since the tool’s inception. More than 30 billion euros in government bonds matured in the region last week, some of which the ECB would have owned, acting as a weight on the overall total. That was confirmed by a statement from the institution provided by a spokeswoman. “Weekly net purchase data are affected by seasonality factors and in particular redemptions,” the ECB said. “Recently there have been large redemptions which lower the net purchases and temporarily delay the increase in our stock of bonds.” A global bond sell-off has sparked varying levels of concern among euro-area officials, aware that sovereign yields are used by banks as a reference point for lending. The region’s recovery is already expected to be slower than that of many other advanced economies amid stubbornly high rates of infections and slow vaccine roll-outs that forced longer and in some places even harder lockdowns.
