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Our briefing for Monday May 31, 2021:
May 31, 2021 4:01:57 PM
- In the United States, citizens are on the move for the first time in a while to celebrate their Memorial Day long weekend. According to AAA, an estimated 37 million Americans travelled at least 50 miles from their home over the weekend – a 13% drop compared to 2019 but a 60% increase from last year. The Transportation Security Administration said the United States set a pandemic era record of 1.9 million people travelling through American airports on Friday and that number is expected to be eclipsed on Monday with people returning home.
- Canada’s two most populous provinces seem to be turning a corner with the latest COVID-19 case wave. On Monday, Ontario reported 916 new cases, the first time the province has logged under 1,000 daily cases since mid-February. In Quebec, the province reported 276 new infections – their lowest case count since mid-September and downgraded several regions – including Quebec City - from their highest pandemic-alert level on Monday. The province’s largest city – Montreal, along with Laval are expected to remain in red zones, but Premier Francois Legault expects that to change as of June 7th.
- In the United Kingdom, a scientific adviser to the government, has called for plans to lift all coronavirus restrictions by June 21st to be reconsidered due to the Indian variant. Speaking to BBC Radio, Ravi Gupta, Professor of Microbiology at the University of Cambridge, said the following: “What we are seeing here is the signs of an early wave that will probably take longer than previous waves to emerge because we do have quite high levels of vaccination in the population.” Gupta went on to add while cases are still relatively low at the moment; they could soon rise to “explosive levels”, with a high number of infections likely to be asymptomatic. Environment Secretary George Eustice said the government could not rule out a delay to the planned lockdown easing, but business leaders have warned of the harmful impact of any change to the proposed dates.
- Hong Kong authorities have made a move to keep financial services up and running during the coronavirus pandemic. Each of the four regulatory bodies responsible for the city’s financial services have agreed to exempt four vaccinated, senior executives of each company from three weeks of quarantine when they visit the city. Hong Kong marked a day of zero new coronavirus cases for the first time (May 27th) in more than six months, suggesting a turnaround in the city that has been battling a fourth wave of the virus since November.
- The Philippines government has extended partial coronavirus curbs in Manila and surrounding areas until mid-June to contain infections that have been decreasing since hitting their peak in April. Non-essential travel remains prohibited with religious gatherings remaining capped at 30% of venue capacity while dining in at restaurants can operate at 20% capacity. President Rodrigo Duterte has also extended a ban on inbound travel from India, Pakistan, United Arab Emirates (UAE) and several other nations to prevent circulation of the Indian coronavirus variant.
- Australia’s latest coronavirus cluster has exceeded 50 cases in Victoria state and has authorities warning the situation could worsen in the coming days. Victoria state, home to the city of Melbourne, went into a strict seven-day lockdown on Friday after new COVID-19 infections ended the region’s three month run of zero community cases. Government authorities have identified several Melbourne schools, supermarkets, department stores and gyms, among hundreds of exposure sites. “The challenge ahead of us is a very, very significant one. We are seeing a small number of cases infecting a large number of contacts,” said Victorian acting Premier James Merlino.
Covid-19 – Due Diligence And Asset Management
Forecast: Global Economy Rebounding, Faces Multiple Threats
Brief : The global economic rebound from the pandemic has picked up speed but remains uneven across countries and faces multiple headwinds. Most worrisome: the lack of vaccines in poorer nations, which could lead to new virus variants and more stop-and-go lockdowns. Those were key points from the latest economic outlook published Monday by the Paris-based Organization for Economic Cooperation and Development. The OECD said that relief and stimulus measures in the more developed world had done much to get the economy through the pandemic recession and back on the path of growth. It forecast global output would rise 5.8%, raising its forecast from 4.8% during its previous outlook in December. This year's predicted rebound follows last year's contraction of 3.5%, and would be the fastest since 1973. The U.S. economy was expected to grow 6.9%, upgraded from a previously forecast 6.5%. The OECD cited wide-ranging support from government spending on additional unemployment benefits, financial assistance for local governments and support for low-income households.
Assets Rebound from Depths of Pandemic
Brief: Even as the coronavirus knocked markets and sent most money managers' assets under management sliding in March and April of 2020, the industry bounced back quickly. In 2020, growth managers came out on top in a big way, U.S. passive strategies continued to pull in assets, outcome-oriented investing fared well as factor investing floundered and ESG continued to grow at an impressive clip. Pensions & Investments annual survey of the largest managers found that global institutional assets under management of nearly 500 money managers grew 10.8% over the year ended Dec. 31 to $54.17 trillion. Overall, total worldwide assets for surveyed managers was $82.45 trillion, up 10.1% for the year and 53% for the five-year period ended Dec. 31. The gains for the year include a dismal first quarter — P&I previously reported that the AUM of 89 of the 100 largest managers declined by 10.4% during the quarter ended March 31, 2020. In terms of the big winners, BlackRock Inc. and Vanguard Group Inc. remained the largest managers in terms of total global AUM, but Fidelity Investments Inc. and State Street Global Advisors swapped positions from the prior year, with Fidelity moving up to third place and SSGA moving down to fourth.
Who Benefits? US Debates Fairest Way to Share Spare Vaccine
Brief: In April, the Biden administration announced plans to share millions of COVID-19 vaccine doses with the world by the end of June. Five weeks later, nations around the globe are still waiting — with growing impatience — to learn where the vaccines will go and how they will be distributed. To President Joe Biden, the doses represent a modern-day “arsenal of democracy,” serving as the ultimate carrot for America’s partners abroad, but also as a necessary tool for global health, capable of saving millions of lives and returning a semblance of normalcy to friends and foes alike. The central question for Biden: What share of doses should be provided to those who need it most, and how many should be reserved for U.S. partners? The answer, so far at least, appears to be that the administration will provide the bulk of the doses to COVAX, the U.N.-backed global vaccine sharing program meant to meet the needs of lower income countries. While the percentage is not yet finalized, it would mark a substantial — and immediate — boost to the lagging COVAX effort, which to date has shared just 76 million doses with needy countries. The Biden administration is considering reserving about a fourth of the doses for the U.S. to dispense directly to individual nations of its choice.
India’s Economy Showed Momentum Before Virus Crisis Hit Home
Brief: India’s economy expanded faster than expected last quarter before a resurgent coronavirus pandemic unleashed a new wave of challenges. Gross domestic product rose 1.6% from a year earlier in the three months ended March, the Statistics Ministry said Monday. That was faster than the 1% median estimate in a Bloomberg survey of economists. The number marks the second straight quarter of expansion following a rare recession, which tipped the economy into an unprecedented 7.3% contraction for the full fiscal year ended March. That compares with a median 7.5% decline estimated in a Bloomberg survey. Stocks jumped 1%, the biggest advance in 10 days, before the GDP numbers were published. The yield on the benchmark 10-year government bond rose two basis points to 6.02%, while the rupee slipped 0.2% ahead of the data. While pent-up demand for everything from mobile phones to cars revived consumption in Asia’s third-largest economy after it reopened last year from one of the strictest lockdowns that lasted more than two months, India’s status now as the global virus hotspot could hurt those prospects. It could temper what will be the fastest pace of growth among major economies this year.
A Survey Shows that the Pandemic has Made Cryptocurrencies More Attractive to Investors, but the Biggest Barrier to Entry is a Lack of Knowledge
Brief: The pandemic has made cryptocurrencies more attractive, according to a recent survey from the Economist Intelligence Unit . As more people stayed indoors to curb the spread of the virus, they found themselves with more time on their hands, while flush with multiple rounds of stimulus money from the government. Data from the Economist Intelligence Unit showed 46% of people surveyed found the case for owing cryptocurrencies more compelling due to covid-19. "It's a function of continued demand across both retail and institutions," Mathew McDermott, managing director and global head of digital assets at Goldman Sachs, was quoted saying in the study. He added: "Given the huge amount of stimulus we're seeing across countries because of covid-19 and low-interest rates, it's the right place at the right time for companies to offer the ability for people to buy, hold, and use digital currencies and have digital wallets." The first part of the study surveyed 3,053 people in February and March from developed economies - US, UK, France, South Korea, Australia, and Singapore - as well as developing countries including Brazil, Turkey, Vietnam, South Africa, and the Philippines.
Brookfield to Spend $1.2 Billion on London Offices, Times says
Brief: Canadian private equity giant Brookfield Asset Management Inc. is set to buy two properties in and around the City of London, the Times reported. Plantation Place, an 18-story building that houses the offices of Accenture UK Ltd. and Aspen Insurance UK Ltd, is being sold for 635 million pounds ($901 million), and Milton Gate, a glass-fronted office block, for 215 million pounds, according to the Times. The U.K. government’s work-from-home guidance is still in force, which has kept footfall in central London to only a fraction of pre-pandemic levels. That in turn has depressed investment in London offices by 53% in the first four months of 2021, the Times says citing real-estate agent Savills.
