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Our briefing for Tuesday March 17, 2020:
Mar 17, 2020 3:53:10 PM
- In the United States there are now over 5,000 cases of the coronavirus and close to 100 have died. Dr. Anthony Fauci, one of the country’s top infectious disease physicians, says it’s the possible the peak number of cases is still another 45 days away for the United States.
- Meanwhile, the government is looking at a way to send money directly to Americans to help curb the economic fallout from the pandemic. The idea, which is gaining bipartisan support, could give $1,000 checks to Americans.
- In Canada, Ontario has issued a state of emergency. As part of the declaration, the province mandated the closure of restaurants and bars, although those that offer takeout and delivery can stay open. The order does not apply to public transit, shopping malls, grocery stores and pharmacies. As of Tuesday morning, there are 185 cases of COVID-19 in the province.
- In Europe, the United Kingdom has announced a £330B emergency rescue package for UK businesses. The London Stock Exchange also has no plans to suspend trading as some investors question whether markets should shut down.
- In Italy, citizens are required to self-declare on a form they have not tested positive for coronavirus or are currently in self-quarantine due to recent exposure. Those who break the rules, could face up to 12 years in prison for culpable participation in the epidemic.
- In France, starting at midday on Tuesday, the country was locked down for the next 15 days. During the lockdown, people will be able to leave their houses only if necessary and must fill out a form that gives their reason for being outside.
- Elsewhere in the world, India says as of Wednesday, it will ban all passengers, including Indian citizens, from entering the country on flights from the European Union, Turkey and the UK.
- Finally, the Philippines became the first country to shut down its financial markets, suspending the stock market trade over coronavirus fears. The closure took place as of Tuesday and will remain closed until further notice.
Coronavirus – Due Diligence And Asset Management
France, Italy, Spain Ban Short Selling to Curb Market Plunge
Brief: Regulators in France, Italy and Belgium banned short selling in some stocks for Tuesday’s session, aiming to curtail the plunge in equity markets driven by the coronavirus outbreak. France’s AMF halted such trades in 92 stocks, while Italy’s Consob blocked the transactions in shares of 20 companies and Belgium’s FSMA imposed a similar restriction. Spain went further, telling market participants late Monday they couldn’t bet on share declines for a month, and French Finance Minister Bruno Le Maire said he would like to see that rule extended Europe-wide.
Macquarie Group Sends 15,700 Home
Brief: Macquarie has told its 15,700 staff around the globe they should work from home from Wednesday. The email, sent on Tuesday morning, says the bank's offices will remain open but with minimal staff. The firm, which has around 6600 staff in Australia, did not put an end date on the new working-from-home arrangement. It is understood some staff at the bank have been told the arrangement could be in place until the middle of the year.
SEC, NYSE Urge Open Markets as COVID-19 Spurs Telework
Brief: U.S. regulators and stock exchanges, while widely transitioning their staffs to remote work during COVID-19’s spread, advocated on Monday for financial markets to stay open despite mounting recession fears. The U.S. Securities and Exchange Commission said in an announcement that it took measures over the weekend to provide relief to market participants affected by the novel coronavirus after a week of transitioning to what the agency called a “full telework posture.” The regulator said it has remained fully operational throughout the transition.
Crispin Odey Rakes in Millions Amid Coronavirus Sell-Off
Brief: Crispin Odey has emerged as one of a handful of winners among the coronavirus induced sell-off, raking in millions of pounds from recent bets against FTSE 250 favourites. Odey’s eponymous investment boutique has initiated bets against six companies, including emerging markets specialist Ashmore and Nick Train favourite Fevertree, which have seen their share prices plummet this year, according to disclosures on short positions from the Financial Conduct Authority. Frankie & Benny’s owner Restaurant Group has fallen 65% since Odey shorted the stock on 5 March, while Tullow Oil shares slid by a third since Odey took out a 0.76% short position on 12 March.
Hedge Fund Bridgewater Places $15 Billion in Bets Against Europe and UK
Brief: Hedge fund behemoth Bridgewater has shown its hand in Europe with roughly $15 billion in bets against companies on the continent and in Great Britain, filings reviewed by Reuters show. The world’s biggest hedge fund manager’s short positions amount to more than $5.3 billion in France and $4.7 billion in Germany, while in Spain its shorts add up to almost $1.4 billion and $821 million in three Italian companies.
Traders ‘Flying Blind’ in Turbulent Markets as Coronavirus Splits up Teams
Brief: At a time of extraordinary swings on world markets, many traders working from out-of-town offices or in unfamiliar dealing rooms fear that communication problems and technical glitches risk adding to already spiralling volatility. Banks’ contingency plans to safeguard markets and employees through the coronavirus pandemic could over time transform the trading and investment world, with more staff working from home or in smaller centers rather than being concentrated in expensive locations like London’s Canary Wharf or Manhattan in New York.
