Brief : Goldman Sachs Group Inc. set a deadline of noon Thursday for employees to report their vaccination status. The requirement, detailed in a memo sent to employees and seen by Bloomberg News, is the latest in a series of steps Wall Street is taking to return operations to normal after most of the industry’s employees spent more than a year working from home because of the pandemic. Banks reaped record profits even as top executives fretted over the shift. Goldman Chief Executive Officer David Solomon has for months signaled his eagerness to end the arrangement. “This is not ideal for us and it’s not a new normal,” Solomon said at a conference in February. “It’s an aberration that we are going to correct as quickly as possible.” Private equity firms Carlyle Group Inc. and Warburg Pincus have already told employees they’ll require Covid-19 vaccinations to return to the office in September. Employers may demand vaccines under federal law, according to guidance provided last month by the Equal Employment Opportunity Commission. Workers can ask for exceptions for religious or medical reasons.
Brief: Despite a year of economic uncertainty, financial assets, including stocks, bonds, and other investment funds, globally reached a record $250 trillion in 2020, according to a report by BCG released on Thursday. An additional $235 trillion was in real assets, led by real estate ownership, making up 48 percent of total global wealth. Contrary to analysts’ projections, the total all-time high of financial wealth rose by 8.3 percent over the previous year, due largely to robust stock market performance and increased savings by individuals. The result: More wealth directed toward investment funds, private equity, private debt and real estate, among others. The capital into equities and investment funds rose 11.5% in 2020, according to BCG. Real assets tend to make up the bulk of wealth in developing countries, where capital markets are still in their infancy. “Over the next five years, however, a combination of greater financial inclusion and growing capital market sophistication will change the wealth composition in growth markets,” according to the report. “In Asia, for example, financial asset growth is likely to exceed real asset growth (7.9 percent versus 6.7 percent).
Brief: The economy represented by the Group of 20 leading industrial and developing nations returned to its pre-pandemic level in the first quarter albeit with differences across the bloc. The G-20 area’s gross domestic product grew 0.8% from the previous quarter, the Organization for Economic Cooperation and Development reported on Thursday. India, Turkey, China, Australia, South Korea and Brazil are now all back at the levels of output seen before the coronavirus struck. But, the U.S., Italy and South Africa were among those still falling short, with the U.K. and Italy recording the largest gaps. The analysis suggests most economies still have a way to go in recovering the ground lost to last year’s recession even though the recovery in demand has been stronger than most economists anticipated. The World Bank this week raised its outlook for global growth, while warning emerging and developing nations will continue to struggle.
Brief: U.S. Representative Kevin Brady (R-Tex.) warns the trillions of dollars spent to overcome the COVID-19 pandemic will add to the U.S. national debt and threaten the country's economic future. "You've got to take all this emergency spending and take it out of the regular budget," Brady told Yahoo Finance Live. President Joe Biden signed the $1.9 trillion American Rescue Plan into law in March. Then in April, he proposed a $2.3 trillion infrastructure bill called the American Jobs Plan along with another bill, the $1.8 trillion American Families Plan Biden's proposed federal budget would make some of the COVID-19 pandemic era spending permanent. That would increase government expenditures $6 trillion dollars over 10 years. Biden proposes to pay for it by raising the corporate tax rate from 21% to 28%. The budget proposal posted online by the White House says the increased spending and increased taxes would pay off. "The American Families Plan makes permanent the American Rescue Plan’s expansion of premium tax credits and makes a historic investment to improve maternal health and mortality."
Brief: Clean balance sheets and higher commodity prices could help EM companies become the biggest beneficiaries of the recovery when "cities reopen and aeroplanes fill up again", say Frank Carroll and Janet Wang, portfolio managers at Oaktree Capital Management. We believe global stock markets have reached an inflection point: value may finally be dethroning growth. Record-low interest rates and a surge in passive investing helped high-growth stocks outperform equities in traditional value sectors for much of the past decade. And the Covid-19 pandemic only widened this performance gap. But in the last few months, investors have begun rotating away from stocks trading at high multiples toward cheaper, value-oriented names that are more sensitive to the economy’s health. We believe emerging markets offer an attractive entry point for those looking to join this shift toward value. This rotation stems from investors’ expectations of a broad global economic rebound. While the pandemic is far from over, the rollout of vaccines has injected optimism into the world economy. We believe inflation, reflation and a rebound in economic activity are likely as lockdowns lift, cities fully reopen, planes fill up, and more workers return to offices.
Brief: Private equity investors pumped a record $62 billion into Indian companies last year, according to Bain & Company’s India Private Equity Report 2021. Nearly 40 percent of this inflow came through $26.5 billion worth of investments made in Reliance Industries’ subsidiaries Jio Platforms and Reliance Retail. Excluding the Reliance transactions, the total deal value fell by 20 percent in 2020 (YoY). That’s because large volume deals of more than $100 million slumped by 25 percent. As the pandemic put a stop to all economic activity in the first half of the year, private equity investments too tapered off. However, the second half of the year saw a surge in investments as investor confidence returned. Thus, the number of deals went up by 5 percent from 1,053 in 2019 to 1,106 in 2020. Last year, healthcare saw the highest growth of 60 percent (YoY). However, consumer tech and IT/ITES were the clear favourites, becoming the largest sectors in terms of investment value, according to the report. The virus outbreak moved the world from offline to online and created a large base of digital-friendly and health-conscious users. This led to a deal surge in business for edtech, fintech, verticalized e-commerce and foodtech with big-ticket investments in Byju’s, Zomato, and FirstCry and many more.