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Our briefing for Wednesday April 21, 2021:
Apr 21, 2021 4:08:28 PM
- In the United States, a recent report is forecasting health officials will be running into another coronavirus related issue within the next month. The Kaiser Family Foundation (KFF) issued a report on Tuesday stating that while timing may differ by state, across the United States as a whole, over the next two to four weeks, the country will see a tipping point on vaccine enthusiasm. What the report is saying within the next month, everyone who wanted a COVID-19 vaccine likely will have it and convincing those that don’t, will become much harder. This fact will be alarming to health officials as many have stated in the past – including White House adviser – Dr. Anthony Fauci – that somewhere between 70-85% of the country needs to be immune to the virus – either through vaccines or previous infection to suppress the spread of current coronavirus and their variants.
- In Canada, Ontario reported over 4,200 new cases of COVID-19 on Wednesday as the provincial government says they are looking at “enhancements” to the federal government paid sick leave program. Ontario Health Minister Christine Elliott suggested on Tuesday that a provincially-run paid sick leave program was being considered – something that health officials have been asking for months now, with the calls only getting louder during this crushing third wave. The help can’t come soon enough: according to the Ministry of Health, there are now 790 patients being treated in Ontario ICU’s – the most ever and of those, 566 require a ventilator to breathe, which is also a record. All of this is happening as Premier Doug Ford had to be moved into isolation after learning a staff member he came in close contact with tested positive for COVID-19 on Monday. Premier Ford will continue to carry on his duties as provincial leader, as well as communicate with the public while in isolation.
- In the United Kingdom, economic analysts are reporting Britain’s economy is rebounding rapidly, as all signs point to a boom in spending after reopening. New economic data published on Wednesday shows the average forecast for UK growth in 2021 is now 5.7% - up from the forecasted 4.8% just a month before. While indoor dining is still prohibited, the reintroduction of outdoor dining rose 105% last weekend. The numbers were 220% above what was dubbed “Super Saturday” last July when the hospitality sector re-opened after the first lockdown. Reports also have visits to shopping malls, major train stations and city centres rebounding sharply as Britons have had enough of looking at their four walls at home.
- Germany was met with protestors in Berlin on Wednesday, hours before and after legislators passed a proposal by Chancellor Angela Merkel’s government to radically change COVID-19 restrictions in the country. Media reports said more than 150 people were arrested after police clashed with demonstrators near the Reichstag in Germany’s capital city where the voting was taking place. If passed by Germany’s upper house later in the week, states will see automatic uniform restrictions imposed in areas where coronavirus is spreading too fast. They include a 10pm to 5am curfew, closure of leisure and sports facilities and shops and schools potentially shifting to distance learning, depending on the severity of the outbreak.
- In France, media are reporting, citing a source close to President Emmanuel Macron, that the country plans to lift domestic travel restrictions and ease a nationwide curfew as of May 2nd. These conditions are based off expectations that COVID-19 daily cases will continue to fall over the coming weeks. President Macron also intends to stick to a goal of allowing restaurants to serve customers outdoors, as of mid-May, while reopening cinemas, theatres and museums with reduced capacity. Elsewhere in the country, the government announced it will be donating 100,000 vaccine doses to the World Health Organization led COVAX initiative. According to the President’s office, France is the first country to voluntarily give vaccine doses to the COVAX initiative, which is designed to share vaccine access to poorer countries around the world.
- Fearing a threat to economic recovery, Indian Prime Minister Narendra Modi is calling on state leaders to reconsider lockdowns and avoid shutting businesses. India only trails the United States for most COVID-19 cases in the world after reporting more than 200,000 cases daily for more than a week. In a televised address Tuesday evening, Prime Minister Modi stated: “I urge states that they should consider lockdowns as the last option. They should earnestly try to avoid lockdown and focus on micro-containment zones.” According to Bloomberg, the nation’s benchmark stock index fell to its lowest since the end of January on Tuesday and the rupee is Asia’s worst-performing currency this month due to India becoming the global epicenter for the latest outbreak.
Covid-19 – Due Diligence And Asset Management
Coronavirus Surge Spills over into World’s Financial Markets
Brief : Financial markets around the world are waking up to the risks of another coronavirus flare-up. Asian markets, blighted by rising cases from Japan to India, have underperformed their global peers since the start of March, just when they looked set to benefit from an acceleration in the global recovery. Currencies of nations stung by the virus have been underperforming those where vaccinations are surging ahead. And now the angst is starting to spread, with recovery trades under pressure and U.S. stocks sliding for two successive days. “Markets that have become too comfortable with the re-opening trade and have loosened social restrictions can be in jeopardy with any Covid spike and variants,” said Paul Sandhu, head of multi-asset quant solutions Asia Pacific at BNP Paribas Asset Management. “Markets with high vaccination rates somewhat circumvent this downside risk.” The World Health Organization said Tuesday that cases are rising in all regions except Europe, with the largest increase last week seen in Asia as India battles its biggest wave. Japan moved closer to declaring a virus emergency as infections spread in its two-biggest and economically important urban areas, Tokyo and Osaka, while health authorities in Toronto will order workplaces across Canada’s biggest city to close if they have more than five confirmed cases.
Neuberger Has Asked Staff to Return in September, CEO says
Brief: Neuberger Berman Group employees have been asked to return to the office in September yet they will still be allowed some flexibility to work remotely, Chief Executive Officer George Walker said. The New York-based firm “asked folks to find a way to start to reconnect with the office,” Walker said in a Bloomberg Television interview on Wednesday. “That can be team meetings, that can be coming in a day a week. And we’re starting to see that as more folks come back in,” he said. “Work from home has worked really well,” he said. “Our performance has never been better, our flows have never been better. But there’s going to be a new normal that’s in between, and that’s going to be trickier than people realize.” Neuberger is not mandating that returning workers obtain vaccinations, just that they have been tested for Covid-19, he said. The company manages $429 billion for institutions, advisers and individual investors.
Wealth Platforms ‘Must do Better on Digital’
Brief: The majority of wealth management platforms are failing to live up to customers’ demands when it comes to digital features, according to recent research from data provider Refinitiv. In its wealth management report, “The Race for Digital Differentiation”, Refinitiv found that only 37% of the 1,030 investors surveyed gave their platforms top marks for the digital experience. The study also found that investors are placing greater importance on digital capability with 72% calling for better integration of news updates and 80% asking for real-time data to enhance their analysis. In addition, 20% of investors are not receiving alerts they would find helpful. In response to the findings, Refinitiv called on wealth managers to accelerate their digital initiatives in order to meet customers’ heightened expectations. “The consequences of Covid-19 have emphasised just how vital it is to have a robust, customer-centric digital experience enriched with deep insights and analytics,” said Charles Smith, head of digital solutions, wealth at Refinitiv.
Dan Sundheim’s D1 Shakes off its $4 Billion Reddit-Fueled Fiasco
Brief: It was the kind of moment that would normally sink a hedge fund: Dan Sundheim was on Zoom, apologizing to clients for losing $4 billion in a single month. He ticked off strategy changes, noted he wasn’t going to dock his team’s pay and then headed back to work. Now, mere weeks later, the episode is behind him. Sundheim has recouped about 90% of what he lost in January when retail investors attacked his short bets on the likes of GameStop Corp. That recovery has put his D1 Capital Partners back into one of the most rapid ascents ever seen in money management. His presentation that February day fit what investors have come to expect from the 44-year-old billionaire -- unemotional yet sincere, supportive of his 51-member team, and unfazed by risk -- attributes they say helped him amass $20 billion in less than three years since setting up shop. Sundheim, who’s posted annualized returns of nearly 30%, is among stock pickers helping to reanimate an industry hit by client defections over mediocre returns.
Saudi Arabia Seeks to Speed Privatizations to Help Ease Deficit
Brief: Saudi Arabia is hoping to speed up privatizations to narrow a budget deficit that ballooned last year due to the pandemic and a slump in oil revenue. The kingdom aims to strike around 15 billion riyals ($4 billion) worth of infrastructure deals with private investors this year, the head of the National Center for Privatization, Rayyan Nagadi, said in an interview. That would be the most since the body was established to accelerate privatizations in 2017. It also aims to complete several asset sales this year, he said, declining to give a value for how much could be raised. Progress on Saudi Arabia’s privatization plan has been much slower than anticipated when Crown Prince Mohammed Bin Salman launched his economic transformation plan in 2016 and outlined plans to sell stakes in utilities, soccer clubs, flour mills and medical facilities. Since then the government has managed to sell stakes in assets including Saudi Aramco and flour mills. It has also signed deals with private investors to build new schools, but it has fallen short of hopes of raising $200 billion in the first few years of its privatization push.
In 2021, Insurers are Risk On
Brief: Insurers plan to increase the overall risk in their investment portfolios as they emerge from the precarious market environment of the pandemic, according to Goldman Sachs Asset Management. The firm’s annual insurance survey, expected to be released on Wednesday, found a 34 percent increase in insurers looking to take on more portfolio risk. This year’s survey aggregated the views of 286 CIOs and CFOs representing over $13 trillion in global balance sheet assets, a study sample which, according to GSAM, accounts for about half of the global insurance industry. “We have not seen the kinds of readings that we have in the survey since the last time we came out of the Great Recession in 2012 and 2013,” Mike Siegel, global head of insurance asset management, said at a virtual press conference held on Tuesday. In the survey, insurers indicated an inclination to increase risk across all types, including equity, credit, liquidity, and duration. While plans to increase risk are trending positive across the globe, insurers based in the Asia Pacific region expressed the most risk-on views, with a net 58 percent of Asia Pacific respondents planning to take on more credit risk over the next 12 months.
