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Our briefing for Thursday, January 13, 2022:
Jan 13, 2022 4:10:49 PM
- In the United States, the Supreme Court blocked President Joe Biden’s vaccine or testing requirement aimed at large businesses but did allow a vaccine mandate for certain health care workers to go into effect nationwide. The decision was announced on Thursday and the ruling blocking the mandate for large businesses was based on the argument that Congress has not given the Occupational Safety and Health Administration the power to enact such a mandate. The rule would have impacted some 80 million individuals and required employers with 100 or more employees to ensure that their employees are fully vaccinated or undergo testing and wear a facial covering at work.
- In Canada, Prime Minister Justin Trudeau said he would need to take a wait-and-see approach if Quebec’s plan to issue some sort of tax on the unvaccinated would be an idea that would work. Speaking to reporters on Wednesday, Trudeau said the federal government has tried to encourage the unvaccinated to receive the inoculation with travel restrictions and vaccine mandates – but a health care tax is a novel concept that needs further study. It is almost guaranteed the proposal would be challenged in the courts under Canada’s Charter of Rights and Freedoms. According to Lorian Hardcastle, a law professor at the University of Calgary, citizens would challenge that the proposal would be a violation of the charter rights to life, liberty and security of the person and the Quebec government would be left to justify the infringement.
- United Kingdom Health Secretary Sajid Javid announced on Thursday people who test positive for COVID-19 will now have to self-isolate for five days, rather than the full seven. The move will bring the situation in England on par with the United States where the isolation period has already been cut to five days. The media also stated the move could ease some pressure on Prime Minister Boris Johnson, who has faced mounting criticism and even calls to resign from members of his own party over his role in what has now been dubbed “Partygate” – a May 2020 party he attended at 10 Downing Street during coronavirus lockdowns for the rest of the country.
- In France, schools have shut across the country as teacher unions say 75% of its members have agreed to strike in protest against the government’s handling of the coronavirus. The government’s numbers given to the public were noticeably lower on Thursday regarding the teacher walkouts – claiming 40% of primary and 24% of secondary teachers walked off the job. French ministers have made keeping schools open a priority during the pandemic, even during a recent surge in COVID-19 cases, fueled by the omicron variant. Teachers are fed up – countering COVID-19 rules in school are confusing and constantly changing. France reported a record 368,149 new coronavirus cases earlier in the week.
- In the United Arab Emirates (UAE), the emirate of Ajman is saying two strikes and you’re out to government employees with it comes to contracting COVID-19. The Associated Press is reporting via local media outlets, federal employees in Ajman will not receive paid sick leave for quarantine if they come into close contact with infected people outside the workplace or home for a second time. The UAE are claiming near perfection when it comes to vaccination rates - 99% of eligible residents have received the jab, marking a death toll of under 2,200 for the virus. However, as is the case with most places in the world, UAE has had trouble with the omicron variant seeing its cases spike to more than 2,600 a day last week, as compared to around 50 a day in early December 2021.
- In China, with the Winter Olympics less than a month away, the country is doubling down on its COVID-zero strategy to make sure it goes as smooth as possible. The Associated Press is reporting more than 20 million people across the country are in some form of a lockdown, with many prevented from leaving their homes. For instance, Tianjin, a city only an hour from Beijing is on high alert. Although it has refrained from a total lockdown, Tianjin city officials have sealed off several residential communities and universities, canceled almost all flights, suspended high-speed rail services and closed off highways. The city conducted mass testing for a second time for its 14 million residents and has asked them to stay at home until they receive a negative result. The Beijing Winter Olympics are set to begin February 4th with support staff already arriving in the country.
Covid-19 – Due Diligence And Asset Management
Goldman Sachs Postpones its Return to Office Again to Wait out the Covid Surge
Brief: Goldman Sachs Group Inc. delayed its return to office for staff in the U.S. by another two weeks as it looks to wait out the Covid-19 surge nationwide. Goldman’s employees were told they could delay returning to Feb. 1, according to a person familiar with the matter. The bank’s management, aggressive champions of having its offices filled, had to check their desire after an about turn last month amid a deluge of Omicron cases sweeping across New York and beyond. Anyone entering the bank’s offices must get a booster by Feb. 1 if they’re eligible for the injections by that date, Goldman had previously told its workforce. A spokesperson for the bank declined to comment.
Institutional Investors Reveal Strong Appetite for Real Estate in 2022
Brief: Institutional investors plan to invest at least EUR68.2 billion in global real estate this year, according to the 2022 Investment Intentions Survey by ANREV, INREV and PREA. The majority of this new capital comes from European investors (52 per cent), whilst their counterparts from North America and Asia Pacific account for 26 per cent and 21 per cent respectively. Funds of funds expect to commit a further EUR8.5 billion, taking the total to at least EUR76.7 billion. Of this total, EUR31.5 billion is expected to be invested in European real estate over the next two years. At a global level, 62 per cent of the surveyed investors said the Covid-19 pandemic would not impact their investment plans for 2022. With a gap of 120 basis points between current (8.9 per cent) and target (10.1 per cent) allocations to real estate, institutional capital looks set to continue to flow into the asset class during the coming year and 61 per cent of all surveyed investors expect their allocation to real estate to increase over the next two years.
London Tech set to Reach New Heights in 2022 Following Record Year for VC Investment
Brief: The future looks bright for London’s tech sector, according to a new report from London & Partners and Dealroom.co, showing that 2021 was another record year for venture capital investment into London’s tech firms. 2021 marks the year London tech came of age, with a large increase in megarounds (USD100 million-plus rounds), an unprecedented number of exits and more new unicorns than any previous year. The UK capital’s tech firms raised an all-time high of USD25.5 billion in VC funding, 2.3x investment levels in 2020, against a backdrop of record global (USD675 billion) and European (USD115 billion) VC investment. Despite the challenges posed by Brexit and coronavirus, the strong performance and rapid growth of London’s tech sector in 2021 suggests the city is competing strongly on the world stage with other leading global tech hubs like the Bay Area, New York and Shanghai. London ranked fourth globally for VC investment in 2021, behind the Bay Area (USD100.9 billion), New York (USD47.5 billion) and Greater Boston (USD29.9 billion).
More than Half of Workers Would Consider Quitting Before Returning to Office
Brief: Workers grew more uncomfortable about heading back to the office in the first week of the year and were much more likely to consider quitting if their employer demanded they return, a sign that companies’ efforts to get people back amid rising COVID caseloads face stiff resistance. The share of remote workers who would consider leaving their job if they were asked back to the office before they felt safe rose to 55 per cent as of Jan. 6, up from 45 per cent just a week earlier, according to pollster Morning Consult. More than four in 10 workers felt unsure about returning to the office, compared with 35 per cent who said so on Dec. 30. People were also less likely to want to attend indoor sporting events, go to the movies and dine out, Morning Consult’s weekly U.S. survey found. The findings come as Robinhood Markets Inc. said it would allow most employees to work remotely on a permanent basis, while companies including Facebook parent Meta Platforms Inc. and Wells Fargo & Co. once again delay plans to bring employees back to their desks as the omicron variant sweeps through the U.S.
Foreign Investment in Emerging Markets Outside China Comes to ‘Abrupt Standstill’
Brief: Foreign investment in emerging market stocks and bonds outside China has come to an "abrupt standstill" due to fears that many economies will not recover from the pandemic this year, according to a report by the Institute of International Finance. In its latest capital flows tracker, the organisation estimates that emerging market securities attracted around $16.8bn in December 2021, but IIF believes the outlook is worsened by the Omicron variant and expectations of a stronger dollar and higher US interest rates. Jonathan Fortun, economist at the IIF, said: "On the other hand, we see flows into China sustaining the overall picture. The last quarter of the year has seen investors pumping money, particularly into China equities. This China and non-China EM split is rooted on the growth outlook. "Markets see China rebounding more quickly than other EMs. Moreover, inflation is forcing the hand of policy makers across the EM landscape. Consequently, our tracker shows bond flows diminishing, as 15 of 20 major EM central banks have tightened monetary policy since May." Non-China emerging market debt suffered an outflow of $9.6bn, while Chinese debt attracted $10.1bn in December, the data shows.
