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Our briefing for Thursday May 13, 2021:
May 13, 2021 3:23:14 PM
- In the United States, the Biden administration is releasing $7.4 billion to boost America’s healthcare workforce amid the ongoing COVID-19 pandemic and to prepare for future epidemics and health challenges. The funds being tapped were part of the $1.9 trillion aid package pushed through by lawmakers back in March and will be used to hire a range of healthcare workers to help with vaccinations, testing and contact tracing. Of the $7.4 billion, $4.4 billion will go to states and local public health departments to address disease outbreaks and hire school nurses. The remaining $3 billion will be used to boost local public health staff ahead of future challenges, with an emphasis on recruiting diverse candidates.
- The Bank of Canada’s governor said they won’t be in any rush to hike interest rates even if the economy can recover on its own and make up the pandemic losses. Canada’s central bank Governor Tiff Macklem made the remarks during a virtual speech before the Universities of Atlantic Canada. Macklem noted the central bank will continue to support the economy until a complete recovery takes place, which means employment surpassing pre-pandemic levels and businesses reinvesting again. “A complete recovery is a shared recovery. It means that we’ve not only recovered the jobs lost due to the pandemic, but we have also created jobs for graduating students and others who have entered the job market since the start of the pandemic,” said Macklem.
- United Kingdom Prime Minister Boris Johnson admitted the government is “anxious” about the coronavirus variant first found in India. On Wednesday, the World Health Organization (WHO) noted the variant currently crippling India is also prevalent in the UK, sitting second on the list. Prime Minister Johnson is still trying to sound optimistic about the full reopening of the country by June 21st, but noted, “at the moment there’s a very wide range of scientific opinion about what could happen, but we want to make sure that we take all the prudential, all the cautious steps now that we could take.”
- After the Philippines posted a worse than expected economic first quarter earlier in the week, the government has moved to ease restrictions in Manila and nearby areas. In a televised briefing on Thursday, presidential spokesman Harry Roque noted the Philippine capital, along with the surrounding areas, will shift to its second-lowest level of restrictions until the end of May. Economic managers have pushed for further easing of restrictions to boost growth and restore jobs. President Rodrigo Duterte has noted religious festivals which usually draw large crowds in the summer will not be allowed.
- China’s state news reported on Thursday the government has announced a new disease prevention and control agency, its largest move since the coronavirus pandemic began. The new National Disease Prevention and Control Bureau will create policies regarding infectious disease control and provide guidance on the surveillance of epidemics, among other public health mandates. While China’s central government in Beijing has always denied it covered up the severity of the coronavirus in its early days, President Xi Jinping has called for efforts to reform the country’s public health system because it lacked the capability to deal with large-scale outbreaks.
- Australia has struck a deal with United States-based Moderna to send 25 million COVID-19 doses to boost their lagging vaccination drive. Under the new deal, the Australian government expects to receive 10 million doses from now until the end of the year, with the remaining 15 million to be delivered in 2022. Australia’s vaccine rollout hit a roadblock earlier in the year when delays and caution hampered the AstraZeneca vaccine. Australia was relying heavily on the UK-based vaccine and have had to continuously shift their goalposts on when all Australians would be fully vaccinated. At first it was the end of October, then early 2022 and now the latest projection from the government says they plan to have vaccinated all Australians by the end of the year.
Covid-19 – Due Diligence And Asset Management
Quarter of Managers in Finance Have Considered Quitting as Covid Burnout Strikes
Brief : Almost two-thirds of managers in the finance sector have experienced burnout at work because of the Covid-19 pandemic, with a quarter having considered quitting their job as a result, according to new research from not-for-profit healthcare provider, Benenden Health. Assessing the impact of the coronavirus pandemic on the nation’s workforce one year on, research has found that as many as 63 per cent of managers in the finance sector have suffered from burnout at work since the UK was first placed into lockdown, with a quarter (26 per cent) of all managers either considering, or actually quitting their job as a result of the strain on their mental wellbeing. With the Office for National Statistics reporting that the number of individuals experiencing symptoms of depression has almost doubled since the start of the pandemic, Benenden Health has examined the impact on the nation’s workforce. This has revealed the effect of Covid-19 on the working lives of managers and their subsequent experiences of burnout, which is the occurrence of exhaustion, stress, cynicism and/or feelings of reduced professional ability due to demands at work. The main causes of burnout at work for those in the finance sector in the past year were shown to be anxiety about the future (36 per cent), a lack of sleep (35 per cent) and increased demands from management (32 per cent), whilst a third of burnout sufferers in finance (30 per cent) revealed that working longer hours had contributed.
Brookfield Asset Management Funds From Operations Hit Record High
Brief: Brookfield Asset Management Inc. reported a profit in its latest quarter compared with a loss a year ago as its funds from operations hit a record high. The asset manager, which keeps its books in U.S. dollars, reported net income attributable to common shareholders of US$1.24 billion or 77 cents per diluted share for the quarter ended March 31. The profit compared with a loss attributable to common shareholders of US$293 million or 20 cents per share in the same quarter last year. Revenue totalled US$16.41billion, down from $16.59 billion in the first three months of 2020. Funds from operations were a record US$2.82 billion or US$1.80 per share, up from US$884 million or 55 cents per share a year ago. Brookfield says it realized $6.4 billion in disposition gains in the quarter, split $1.8 billion for Brookfield and $4.6 billion for its clients.
Marks Laments ‘Not Having Great Things to Buy’ Amid Low Distress
Brief: Howard Marks, co-founder of Oaktree Capital Management, says making money in today’s environment is nearly impossible, particularly for “bargain hunters” that saw last year’s selloff come and go so quickly. “In the short term, I worry about not having great things to buy,” Marks said during a MacroMinds virtual event moderated by Bloomberg’s Alix Steel. The safer plays aren’t especially attractive, according to Marks. “You can keep the portfolio you’ve historically had and expect that the return will be lower than it used to be,” he said. “You can say the market is a little high,” reduce risk if you’re wary of a correction, “and then your return will be even lower,” Marks continued. Or you can get out of the market entirely, and “your return will be zero.” Investors who don’t like the safer scenarios can take on more risk, Marks said, or find a niche money manager who “drives people to illiquid or so-called alternative investments,” which then introduces “manager risk.” “The answer is that there is no, and can be no safe, dependable way to make a high return in a low-return world,” Marks said. “It’s too good to be true.” Global credit and equity markets have staged a dramatic rebound since last year, when the Federal Reserve took unprecedented steps to steady the economy amid the pandemic.
Billionaire Investor Barry Sternlicht says he has Long-Term Concerns About the U.S. Economy
Brief: Global investor Barry Sternlicht told CNBC on Thursday he has some long-term concerns about the U.S. economy, saying there are risks beyond the immediate boom from the Covid recovery. In a wide-ranging interview on “Squawk Box,” the billionaire businessman worried about numerous shortages in the economy and criticized the Federal Reserve’s highly accommodative monetary policy and legislative proposals in Washington. “I do think the Fed, interest rates, are being suppressed by the government. .... We have to get off of this sugar-cane and Fluffernutter economy and get to the meat-and-the-potatoes economy,” Sternlicht said. “We have to get back to a sustainable economy and people coming back to work.” The chairman and CEO of Starwood Capital Group pointed to recent Labor Department data that showed a record number of job openings in March. “Something is wrong,” he said. Sternlicht, whose firm operates hotels as part of its broader portfolio, said hiring challenges for businesses are largely the result of enhanced unemployment benefits that were included in a federal coronavirus relief package. However, economists say the reason people may still be hesitant to return to work is due to many factors, including Covid concerns and a lack of reliable child care.
Standard Bank Gears Up for Africa’s Post-Covid Economic Recovery
Brief: Africa’s biggest lender sees opportunity in both its core South African market and the rest of the continent amid a recovery from the Covid-19 pandemic. “South Africa is fiercely competitive,” Standard Bank Group Ltd. Chief Executive Officer Sim Tshabalala said in an interview on Thursday. “We have to continue making investments” there. The Johannesburg-based lender is also ready to take advantage of consolidation throughout Africa, where it has a presence in 20 countries, he said. Standard Bank has increasingly turned its focus outward in recent years, with Africa producing the fastest-growing parts of its business last year and contributing about a quarter of its total income. “We are going to go where the returns are highest and the risks are lowest,” Tshabalala said. Geographically, Ethiopia and the West African Economic and Monetary Union -- including Côte D’Ivoire, Mali and Senegal -- are attractive, he said. The lender expects growth in South Africa to rebound by 4.6% this year, Tshabalala said.
Investors Say It’s Time for Earnings to Get Back to Normal
Brief: As the U.S. economy and stock market recover from the Covid-19 pandemic, investors are returning to their pre-pandemic expectations for how companies report financial results. While investors have maintained their pandemic-driven focus on companies making long-term investments, they have shifted their expectations for earnings and guidance back to “less permissive pre-pandemic norms,” according to Boston Consulting Group’s most recent Covid-19 investor pulse survey. Investors’ recovery-driven mindsets are also evident in their shifting approach to capital allocation, with survey respondents focusing less on capital preservation and more on capital distribution. From April 29 to April 30, BCG surveyed “leading” investors, representing investment firms with over $5 trillion in combined assets under management, about their expectations for the U.S. economy and stock market and their perspectives on impending decisions from corporate executives and boards of directors. When asked whether it is important for the management of financially healthy companies to provide or revise guidance within the next 90 days, 87 percent of investors answered “yes,” the highest proportion to say so since BCG began conducting the periodic surveys in March 2020.
