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Our briefing for Tuesday, March 15, 2022:
Mar 15, 2022 4:43:44 PM
- The two major vaccine manufacturers in the United States disagree on whether a fourth dose of Covid-19 vaccine is necessary. The executives at Pfizer and Moderna were both recently interviewed about the need for a fourth dose, Albert Bourla, Chief Executive Officer at Pfizer Inc. said that the efficacy of three doses will wane soon and that a fourth dose is needed “right now.” In contrast, Moderna Inc. President Stephen Hoge has said that another booster shot should only be needed for older people or the immunocompromised. According to preliminary data, a fourth dose of the Pfizer vaccine was not enough to prevent infection from the Omicron variant but was able to prevent serious illness and death. Bourla has remained optimistic that the company will be able to create a vaccine that would target Omicron and will soon submit data to U.S. regulators that advocates the implementation of a fourth dose. According to a Business Insider report, Moderna is confident that a bivalent booster will be available this year and that shot will be effective against both Omicron and the original virus strain.
- As of April 27, when Covid-19 restrictions are set to expire in the province of Ontario, mask, vaccine, and physical distancing mandates will effectively end in Canada. However, as of yet, there has been no indication that Covid restrictions will end at the federal level. Almost all the restrictions put in place by Ottawa will still be in place even as all provinces have decided to end their restrictions. Anyone boarding a flight in Canada, domestic or otherwise, is still required to show proof of vaccination in order to travel. Masks are still required onboard flights and in airports. Any travelers crossing into Canada are still required to have taken a supervised antigen test and may be selected for a random test at the border. Unvaccinated travelers are still required to isolate for 14 days upon arrival, and government officials have not yet released any information on when these restrictions may change. Furthermore, all government employees are required to be fully vaccinated, even when working from home. Tourism Minister Randy Boissonnault said in late February that “a complete lifting of restrictions at this time isn’t good for Canadians or for Canadian businesses.” The reluctancy from the government to release information has even troubled some experts. Isaac Bogoch, an infectious disease specialist at Toronto General Hospital believes that some transparency from the government is needed, “it would just be nice for them to discuss what they’re looking for,” he said. “Even if it’s ‘we’re not sure, we’re watching this week by week,’ that’s fine.”
- New cases of Covid-19 are again on the rise two weeks after the United Kingdom officially ended its pandemic restrictions. Covid-19 cases were up 48 per cent in the last week compared to the week previous and hospitalizations were up 17 per cent. While still less than a third of what it was experiencing during the peak of the Omicron outbreak, the U.K. is averaging roughly 55,000 new cases a day. This number has public health officials worried as hospitalizations are no longer lagging behind cases by days and are instead climbing in unison. The U.K. is offering several answers for the spike in new cases, including the BA.2 variant being more contagious that previous Omicron variant, the relaxation of regulations has more people socializing in close proximity without masks, and the waning efficacy of vaccinations. Last week, the U.K. Health Security Agency said BA.2 had an 80 per cent higher relative growth rate compared to the original Omicron strain, although, it does not appear to lead to more hospitalizations. As of now, it is not clear why the number of hospitalizations in the U.K. is rising, as BA.2 does not seem to be causing severe disease in the highly vaccinated British population.
- Researchers at the University of Hong Kong estimate that nearly half of the city’s population has already caught Covid-19. The researchers determined that about 3.6 million of the 7.4 million Hong Kong residents have been infected with the virus as of Monday. That number is up from the 1.8 million that had been infected as of March 7 based on modeling software and rigorous analysis. The research indicates that the Omicron wave the city is experiencing peaked on March 4, but the number of cases is expected to reach 4.5 million before it drops. The research suggests that more than 5,100 people will die from the virus by May 1, up from an earlier estimate which had death numbers around 5,010. So far, 59 per cent of deaths resulting from complications associated with the virus have been in long-term care facilities. In both 2020 and 2021, more people left Hong Kong than came in and over the last month alone nearly 94,000 have moved out of the city.
- The Dutch government will drop its last remaining Covid-19 restrictions next week, despite a rise in new confirmed cases. As of March 23, face masks will no longer be required on public transport as the government says the country must learn to live with the virus. Along with the mask mandates, the use of vaccine passports for entry into nightclubs and large-scale events will be terminated, one of the last remaining pandemic restrictions still in place. Only on airplanes and in airport screenings will the government still require mask wearing. “It is possible and responsible to further relax,” Health Minister Ernst Kuipers said as cases in the country had been steadily declining for weeks. That number again began to rise after the annual carnival weekend held earlier this month, where people gathered at large street parties across the nation. More than 21,000 people have died in the Netherlands since the start of the pandemic, and 85 per cent of people over the age of 12 have been fully vaccinated against the virus, however, only 62 per cent have received a recent booster shot.
Covid-19 – Due Diligence And Asset Management
New global risks arise amid gradual post-pandemic recovery
Brief: Even as the events in Ukraine has dominated headlines and stokes fresh uncertainty, Canada and the world are facing economic challenges that go far beyond the conflicts in the region. According to a new commentary from RBC Economics, the Russian invasion will undoubtedly aggravate already-existing pressures. “Even before the escalation in geopolitical risk, production capacity limits—including acute labour shortages and rising input costs—were emerging as more significant concerns for businesses than any shortfall in orders,” said RBC economists Craig Wright and Dawn Desjardins, along with analyst Nathan Janzen. The invasion of Ukraine has jolted financial markets, pushed commodity prices higher, and posed a threat to already strained global supply lines. While improving labor markets, growing earnings, and savings acquired during the pandemic are expected to support household purchasing power, they cited strong demand and businesses’ ability to ramp up production as factors for broadening inflation. That has created a strong motivation for central banks to stay on their paths toward rate hikes.
Fund Managers Now See Equity Bear Market in 2008-Like Gloom
Brief: Most investors now expect global equities to slump into a bear market this year as the growth outlook has tumbled to the lowest level since the 2008 financial crisis amid fears over the impact from the war in Ukraine. This is the takeaway of the latest Bank of America Corp. monthly global fund manager survey conducted in the week through March 10. While cash levels surged to the highest since April 2020, the early days of the Covid-19 pandemic, allocation to commodities jumped to a record and exposure to equities fell to the lowest in nearly two years. “Economic growth and profit expectations are recessionary,” BofA strategists led by Michael Hartnett wrote in a note to clients. Persistently high inflation readings, concerns that central banks will tighten policy more aggressively than previously anticipated, and Russia’s invasion of Ukraine have triggered a rout in global stock markets this year, with major indexes now deep into correction territory. This flurry of headwinds, which now also includes a flare-up in coronavirus infections from China to Germany, is raising fears that a downturn in equities will continue.
World economy braces for supply hit as China battles COVID again
Brief: The global economy -- already struggling with war in Ukraine and the stagflation risks it’s fanning -- is bracing for greater disruption as China scrambles to contain its worst outbreak of COVID-19 since the pandemic began. Since Wuhan two years ago, China has had relative success in minimizing disruption by bringing virus cases quickly under control. Now, the geographic spread of infections and higher transmissibility of the omicron variant is challenging the country’s hawkish pandemic strategy of aggressive testing and locking down whole cities or provinces. If China fails to contain omicron’s spread, further movement restrictions would derail the economy’s promising start to the year, weakening a key pillar of global growth. As manufacturer to the world, any disruptions to exports resulting in shortages could also drive up inflation internationally, just as central banks begin hiking interest rates, like the Federal Reserve is expected to do on Wednesday.
Operational Risk Management Solution Market Forecast to 2028 - COVID-19 Impact and Global Analysis By Deployment and Enterprise Size
Brief: After the COVID-19 pandemic, corporate players have introduced changes in their operations by enabling flexible work schedules, allowing remote working, and enhancing the employee experience. The hybrid work models are defined as a more flexible, digital, and rewarding future for their employees. According to an article published by GENESIS INTEGRATION, 55% of the US workers want a work pattern that allows the mix of working from home and office. The article data also reveals that more than 2 in 5 working adults (42%) are willing to give up some percentage of their salary for higher flexibility at work. Further, 74% of newer generation would prefer either working from home or splitting work time between home and work, as per the article published by GENESIS INTEGRATION. The rising adoption of a potentially permanent hybrid workforce has led to an increase in operational risk management solutions due to the rise in cybersecurity attacks with remote working. Further, businesses also need to address the increasing risk of internal fraud. According to the article by Risk Management Intelligence in October 2021, employee fraud cases in Asia Pacific region have increased over the past year in the COVID-19 pandemic.
Private equity reaches record heights in 2021: Bain & Company report
Brief: Private equity set a new standard for itself in 2021 as buyout deal value reached an all-time high of $1.1 trillion, doubling 2020’s total of $577 billion, said global consultancy Bain & Company in a new report. The number of deals greater than $1 billion roughly doubled in 2021, with the average deal size reaching $1.1 billion, increasing 57% to pierce through the $1 billion mark for the first time, according to the company’s 13th annual Global Private Equity Report. One reason for the sharp increase in deal value last year is the sheer volume of capital in the market. After 10 years of steady growth, dry powder set yet another record in 2021, rising to $3.4 trillion globally, with approximately $1 trillion of that sitting in buyout funds. The opportunity to put large amounts of capital to work produced a sudden and sharp increase in public-to-private (P2P) deals, especially in North America and the Asia-Pacific region. These take-private transactions soaked up $469 billion in capital globally, a 57% one-year increase, and were largely responsible for 2021’s record-setting value total.
