.png?width=200&height=78&name=CH%20Diligence%20(thicker%20line).png "CH Diligence (thicker line).png")
Our briefing for Wednesday April 28, 2021:
Apr 28, 2021 4:28:48 PM
- In the United States, CNN is reporting there is growing internal debate among Biden administration officials over COVID-19 vaccine sharing with other countries. World leaders have asked the White House administration to share excess vaccines and other emergency COVID-19 assistance for months. According to CNN, those on the side of sharing excess vaccines as quickly as possible have grown frustrated and are encouraging business groups and interest groups outside of the government to publicly push the administration. The White House coronavirus response coordinator’s team has taken the lead on this decision making and lean towards making sure first and foremost the United States need to be confident vaccine efforts are domestically taken care of.
- In Canada, the province of Nova Scotia is taking no chances, moving the entire region into a two-week snap lockdown. The restrictions are to be in place until May 12th, calling for strict rules around gathering (almost none outside of the immediate household), sweeping closures to non-essential businesses and a shift to remote learning for schools. Nova Scotia made the move after reporting 96 new cases on Tuesday – a new single day record. The caseload dropped slightly on Wednesday to 75. Elsewhere in the country, the Ontario government has issued a new emergency order that will allow the transfer of patients waiting for a long-term care bed to any nursing home without their consent in an effort to free up space for COVID-19 patients in need of urgent care. Health Minister Christine Elliott said the transfers without consent will only be completed in the most urgent of situations.
- The United Kingdom has purchased another 60 million doses of the Pfizer/BioNTech vaccine to support its booster program for the fall. “Our vaccination program is bringing back our freedom, but the biggest risk to that progress is the risk posed by the new variant,” Health Secretary Matt Hancock said in a statement. “We’re working on our plans for booster shots, which are the best way to keep us safe and free while we get this disease under control across the whole world.” Staying on the topic of vaccines, Hancock said the UK does not currently have any excess doses of COVID-19 vaccine to send to pandemic-stricken India.
- France Prime Minister Jean Castex said on Wednesday that President Emmanuel Macron will outline how coronavirus restrictions will be progressively relaxed later in the week. President Macron will speak to the nation on Friday to give more details, but French media is reporting the government will replace the current state of emergency as of June 2nd with a “transition regime” that will run until October 31st. The “transition regime” will allow the government to react swiftly if health conditions were to deteriorate as France exits its lockdown. France is the European Union’s second largest economy and is currently in its third national lockdown since the pandemic began.
- Bloomberg is reporting with India being crippled by the latest wave of the pandemic, China is stepping into fill the vaccine void with neighbouring nations. China’s Foreign Minister Wang Yi met with his counterparts from Afghanistan, Bangladesh, Nepal, Pakistan and Sri Lanka in a virtual meeting on Tuesday and said Beijing is willing to provide stable vaccine supplies through a multilateral framework. China has been trying hard to establish itself on the worldwide stage through vaccine diplomacy. India, home to the world’s largest vaccine industry, has had to pause export efforts to help its own people through their recent struggles.
- In a joint statement with the International Olympic Committee (IOC), the government of Japan agreed on measures to ensure the safe organization of the Olympic Games, which are scheduled to begin in just under three months. The measures include all participants required to take two COVID-19 tests before their flight to Japan. Once in Japan, all athletes and those close to the athletes will be tested daily, and will have an activity plan that must be followed which includes minimizing contact within one metre of Japanese citizens. The timing of this “playbook” comes as Tokyo, Osaka and several prefectures are under a third state of emergency this week.
Covid-19 – Due Diligence And Asset Management
Fed Upgrades View of Economy While Keeping Rates Near Zero
Brief : Discover what’s driving the global economy and what it means for policy makers, businesses, investors and you with The New Economy Daily. Sign up here Federal Reserve officials strengthened their assessment of the economy on Wednesday and signaled that risks have diminished while leaving their key interest rate near zero and maintaining a $120 billion monthly pace of asset purchases. “Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,” the Federal Open Market Committee said in a statement following the conclusion of its two-day policy meeting. “The sectors most adversely affected by the pandemic remain weak but have shown improvement. Inflation has risen, largely reflecting transitory factors.” Marking a clear improvement since the pandemic took hold more than a year ago, the Fed said that “risks to the economic outlook remain,” softening previous language that referred to the virus posing “considerable risks.” The statement also noted that sectors hit hardest by the Covid-19 pandemic had “shown improvement.”
China Private Equity Deals Surged in 2020 as Country Emerged from COVID-19 Crisis, Bain Survey Finds
Brief: China's private equity investors benefited from the country's swift action to contain the Covid-19 pandemic, enjoying a jump in investment value and deal numbers last year, according to global consultancy Bain & Co. But the fund managers face an uphill battle to conclude more lucrative deals this year amid escalating competition. "Higher selling prices of targeted firms are expected this year," said Lucia Li, a partner with Bain said. "High-growth companies are actively chased by many funds, hence they are raising their valuations and prices." Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. In 2020, private equity funds in China sealed deals worth US$97 billion, up 40 per cent from a year earlier, Bain's survey found. The total number of transactions climbed 53 per cent to 857. Companies in the technology, media, telecoms and health care sectors with both solid earnings and high growth potential were the primary targets of the cash-rich investors.
Airport Muni Bonds Rally with Vaccine Heralding Travel Rebound
Brief: Bonds backed by America’s airports are rallying back as the Covid vaccine rollout promises to revive the travel industry, marking a rebound for one of the corners of the municipal-debt market hardest hit by the pandemic. The rally has driven the yields on debt backed by airports down to about 1.2%, or about 30 basis points more than the market’s benchmark, according to an ICE Bank of America index tracking the sector. That marks a dramatic shift from early in the pandemic, when speculation about the deep financial toll of the nation’s shutdowns drove the index’s yield to more than 4% as investors dumped the securities in droves. The move eliminates what had been some of the rare bargains in the municipal securities market as valuations on top-rated bonds hover near record highs. Junk bonds have climbed, too, pushing the yields back toward the more than two-decade low hit before Covid-19 raced through the U.S. “During the pandemic, airlines and anything associated got absolutely crushed in terms of spread -- and they stayed wider for a longer period of time than some of the other sectors that were affected,” said Jason Appleson, a portfolio manager at PT Asset Management in Chicago. “In terms of buying opportunity, I’m not sure there is a lot left.”
Battered U.S. Office Perks Up with Workers Trickling Back
Brief: After a number of false starts over the past year, corporate America is finally bringing workers back to the office. The widening availability of vaccines means that employers are setting plans for returns. Exxon Mobil Corp. said on Tuesday that its Houston-area workers would be back full-time in May. JPMorgan Chase & Co., meanwhile, is opening its U.S. offices next month, with its full staff expected back in July on a rotating basis. Already, offices are slowly starting to fill up across the country as social distancing-rules ease and vaccines accelerate, bringing optimism that more Americans will soon be able to resume their pre-pandemic daily life. About 26% of office workers in major cities were back at their desks as of April 21, the highest share in about five months, data from security company Kastle Systems show. Companies that postponed searches for space last year are back in market, looking to take advantage of cheaper rents and concessions from landlords eager to fill vacancies. National demand for offices jumped 28% in March from the prior month and is now just 9% below pre-pandemic levels, according to property-data firm VTS, which tracks office tours. “People are feeling really good about where we are in the world from the economy and getting Covid under control,” said Ryan Masiello, chief strategy officer at VTS. “That’s a big part of what’s driving people back into the market.”
The Billionaire Who Pioneered Remote Work Has a New Plan to Turn His Workers into Algorithms
Brief: In March, the billionaire founder of Austin, Texas’ ESW Capital, Joe Liemandt, fired off a directive to managers of his army of 2,500 remote workers. The email’s subject line read: “White Collar Specialization- Worksmart Work Unit.” With the world embracing remote work as the new normal, Liemandt ordered his managers to design work units, specialized tasks that workers—mostly software engineers— could perform efficiently over and over, as if they were assembly line workers in an old-fashioned auto factory. “Most jobs are poorly thought out and poorly designed—a mishmash of skills and activities . . . poor job designs are also quickly exposed with a move to remote work,” Liemandt wrote. The solution, Liemandt argued in his email, was for managers to observe remote workers and identify repeatable work patterns in order to create these work units. The idea was for managers to fragment white-collar work into small-scale tasks—the writing of specific code by a software engineer, a customer support agent solving a specific technical problem, or a targeted document analysis. Liemandt wanted his managers to create these units—lots of them.
The Pandemic Didn’t Touch Private Equity Paychecks
Brief: Amid the market volatility and economic uncertainty of the pandemic, compensation for professionals in private equity and venture capital continued to rise. In Benchmark Compensation’s annual survey of industry professionals, 68 percent of respondents said they earned between $150,000 and $1 million last year, marking the highest percentage to report earning more than $150,000 since the company began publishing the annual report 14 years ago, the firm said in a press release Tuesday. The 2021 report also marks the seventh consecutive year of gains in private equity and venture capital compensation. Overall, the study found that respondents working in private equity earned more money than those working in venture capital, but respondents working in hybrid firms earned the highest levels of compensation as vice presidents and managing directors. The report was based on a survey of hundreds of workers, from partners to junior advisors, from October to November 2020. Participating firms included Goldman Sachs, KKR, Bain Capital, and BlackRock. “Overall, compensation is up, but more than half of those surveyed are dissatisfied with their pay,” David Kochanek, the publisher of the study, said in a statement. According to Benchmark Compensation, employees cited market conditions and employee expectations as the reasons why they were dissatisfied.
