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Our briefing for Wednesday April 1, 2020:
Apr 1, 2020 4:57:54 PM
- United States President Donald Trump’s dire warning during a media briefing seemed to be in lockstep with his health officials stating the next 14 days are going to be tough on America as they expect their numbers to skyrocket with coronavirus cases and deaths. The warning now has estimates of the coronavirus killing between 100,000-240,000 Americans even if people continue to practice social distancing. Multiple media reports are also stating American health care workers are told not to speak to the media without authorization, or risk being fired as they deal with the deteriorating conditions in many health care facilities.
- In Canada, the two largest provinces are trying to enhance efforts to stop the spread of the coronavirus. In the country’s largest city, Toronto Mayor John Tory issued a 12-week plan that is “locking down the city as much as any municipal government could”, including asking people to shop for groceries once a week, and for anyone older than 70 to stay home as much as possible. Meanwhile, Quebec is banning non-essential travel into the western part of the province as of noon on Wednesday, including visitors from neighbouring Ontario. The usual exceptions of health-care workers, humanitarian support and supply chain workers will continue to be enforced.
- The United Kingdom has seen 20,000 more cases of the coronavirus in just the last week. The Evening Standard reports there are at least 29,474 cases confirmed, compared to 9,529 at the same time one week ago. The Wimbledon Tennis Championships in England, seen as the crown jewel of professional tennis’ four major championships, has been canceled for the first time since the World War II era due to the coronavirus outbreak.
- German Chancellor Angela Merkel announced restrictions on social contact will be extended until April 19th. The measures, which were first introduced on March 23rd included a ban on gatherings of more than two people.
- Israel had to send in police to the Arab and ultra-orthodox suburbs of Tel-Aviv as riots broke out between the two religious minorities. The media reports note the ultra-orthodox Jewish population has refused to stop weddings, funerals and public prayers.
- As the United States have announced double the cases of coronavirus as compared to China, a Bloomberg article is citing a U.S. Intelligence classified report that China has intentionally reported inaccurate stats on cases and deaths of coronavirus in the country.
- In Brazil, President Jair Bolsonaro continues to be one of the world leaders on an island of his own when it comes to coronavirus. Over the weekend, Bolsonaro visited a market area just outside the Brazilian capital, and in a television interview questioning coronavirus related deaths stated, “I’m sorry, some people will die, they will die, that’s life.” State governors who are responsible for more than 200 of the 210 million Brazilians continue to ignore their President refusing to follow his demands of allowing people back to work, and a federal judge has banned Bolsonaro’s social media campaign of “Brazil can’t stop.”
Covid-19 – Due Diligence And Asset Management
Loeb’s Third Point Drops 11%: Hedge Fund Update
Brief: The $3 trillion hedge fund industry is under pressure amid market turmoil prompted by the spread of the coronavirus. A wide dispersion of gains and losses is expected to emerge as firms disclose their returns for March. Below are some of the winners and losers. Dan Loeb’s Third Point posted losses in its flagship hedge fund last month, according to people with knowledge of the matter. The Third Point Offshore Fund dropped 11%, bringing its loss this year to 16% percent, said the people, who asked not to be identified because the matter is private.
Standard Chartered Commits $1bn to Covid-19 Fight
Brief: Standard Chartered has made $1 billion (€0.9 billion) of finance available for companies able to provide ventilators, face masks and other goods and services to help fight the Covid-19 pandemic. Companies in scope include healthcare providers, along with manufacturers and distributors in the pharmaceutical industry. Companies in non-related sectors that can switch their production to support the fight against the virus and Standard Chartered said it is also trying to identify companies who are considering changing to, or adding anti-virus products to their production line, but have not yet said they will.
U.K. Property Fund Freeze Hits $25 Billion as Virus Rocks Values
Brief: The lockdown of U.K. property funds has now put about 20 billion pounds ($25 billion) out of investors’ reach as the coronavirus pandemic batters the economy and makes valuation of assets nearly impossible. BlackRock Inc., Schroders Plc and Legal & General Group Plc are among the latest firms to freeze some funds, telling their institutional clients that withdrawals are halted indefinitely because of the outbreak, according to company statements. The suspensions of these funds for professional investors, which have about 9 billion pounds of assets under management, follow previous decisions by a range of firms to lock up about 11 billions pounds of mom-and-pop clients’ cash.
Private Equity Lobbyists were Involved in the Push for $500 Billion Coronavirus Bailout Fund
Brief: Lobbyists representing the private equity industry pushed the Trump administration and members of Congress to provide hundreds of billions of dollars in relief for businesses hammered by the spread of coronavirus. The American Investment Council, which lobbies on behalf of the private equity industry, spoke to congressional leaders from both sides of the aisle and Treasury Department officials, according to people with direct knowledge of the matter. These people declined to be named because the conversations were deemed private.
CFTC Provides Further Relief to Market Participants in Response to COVID-19
Brief: The Commodity Futures Trading Commission’s Division of Swap Dealer and Intermediary Oversight (DSIO) today announced that it has issued additional targeted, temporary no-action relief to foreign affiliates of certain futures commission merchants (FCMs) in response to the COVID-19 (coronavirus) pandemic. The relief expires on September 30, 2020. “The CFTC will continue to provide targeted, temporary relief to market participants where appropriate,” said DSIO Director Joshua Sterling. “This action bolsters our efforts to facilitate orderly trading and liquidity in our derivatives markets during this volatile period. We encourage market participants to engage with the CFTC early and often as market developments continue to unfold.”
This Crisis Will Unleash an Activist War
Brief: Although some have opined that shareholder activism appears unseemly during a global pandemic, a new survey shows that investors think this mindset won’t last for long. A recent survey by Boston Consulting Group found that 59 percent of the investors it polled think activists are coming for companies amid the devastation caused by the spread of Covid-19 — and that management should do more than sit and wait. These investors also think companies should "take proactive steps to mitigate activism risk by strengthening their businesses’ near- and medium-term fundamentals,” according to the survey, entitled “Investor Pulse on the COVID-19 Crisis.”
