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Our briefing for Wednesday March 24, 2021:
Mar 24, 2021 3:28:18 PM
- A senior United States official expects the World Health Organization’s (WHO) investigation into the origins of the coronavirus pandemic to require further study, perhaps even a return trip to China. Marc Cassayre, charge d’affaires at the U.S. mission to the U.N. in Geneva, hopes the WHO investigation, expected to be released later this week, will be based on science and a real step forward in order to prepare for future pandemics. The WHO’s probe into the pandemic origins back in January was hampered by delays, concerns over access and bickering between Washington and Beijing on where/how the coronavirus pandemic started.
- In Canada, an Ontario infectious disease doctor believes the third wave of COVID-19 infections will be worse than the first two. “I think it’s impossible to avoid a third wave that’s likely going to be worse than the first two,” said Dr. Abdu Sharkawy, an infectious disease specialist. “Many of us felt that this was an inevitability. This is pretty much the trap that this pandemic has proven its ability to present to us. That’s why we call them waves, you get lulled into a sense of complacency and then cases start picking up.” Ontario’s top doctor earlier in the week declared the province is entering its third wave, even as sections of the economy start to reopen, while Alberta and British Columbia have not made that declaration yet but have seen their infection rates continue to increase.
- The United Kingdom and European Union (EU) are said to be working on steps to create a “win-win situation” and avoid a vaccine war with one another. In a joint statement, the UK and EU stated: “We are all facing the same pandemic and the third wave makes co-operation between the EU and UK even more important. We’ve been discussing what more we can do to ensure a reciprocally beneficial relationship between the UK and EU on COVID-19.” The joint statement came just hours after Prime Minister Boris Johnson addressed parliament and didn’t think blockades of vaccines, medicines or ingredients for vaccines was sensible. Earlier on Wednesday, AstraZeneca denied “stockpile” claims saying 29 million vaccine doses at an Italian plant are for EU and developing countries. There had been reports that doses were “hidden” in the plant, just outside of Rome, and destined for the UK.
- Germany’s response to the latest wave of the coronavirus is definitely not going as smoothly as the first. For the third time in three days, Chancellor Angela Merkel had to address lockdown restrictions – this time admitting fault and dropping plans for a five-day shutdown in Germany over Easter, which prompted confusion and criticism. “This mistake is my mistake alone,” Merkel told reporters. “A mistake must be called a mistake and above all it must be corrected – and if possible, that has to happen this time.” Chancellor Merkel said that, even without the Easter shutdown, decisions that have been taken with the 16 state governors offer a “framework” to beat back the new wave of coronavirus infections.
- Philippines President Rodrigo Duterte has warned officials against jumping the vaccine queue, saying the country risks losing their donated doses from the COVAX initiative if health workers aren’t prioritized. In a televised news briefing on Wednesday, President Duterte said five mayors and a local celebrity’s son have been asked to explain and may face charges for being inoculated ahead of priority groups. At the same news briefing, the country’s health secretary said the Philippine’s available vaccines can only inoculate 30% of the nation’s 1.7 million health workers.
- Brazil recorded more than 3,000 COVID-19 deaths in a single day for the first time on Tuesday and that grim statistic finally seems to be making President Jair Bolsonaro change his tune, albeit not very much. In a four-minute presidential address on TV and radio, Bolsonaro said his government will make 2021 the year of the vaccination of Brazilians. However, even in that subtle tone shift, President Bolsonaro never addressed the 3,251 deaths due to the virus on Tuesday and said Brazilians will “very soon return to normal life”, which considering the dire situation, doesn’t seem very realistic. President Bolsonaro has constantly downplayed the coronavirus pandemic in Brazil and even late last week, appealed to the Supreme Court to invalidate curfews enacted by two states and federal district. The top courts had previously ruled governors and mayors have the power to adopt such restrictions.
Covid-19 – Due Diligence And Asset Management
Private Equity Piles on Debt to Pull Cash From Health-Care Firms
Brief : Health-care companies are taking on more debt to pay dividends to their private equity owners, just a year after the start of a pandemic that plunged the industry into crisis. At least five U.S. health-care firms have borrowed heavily in part to fund hundreds of millions of dollars of such payouts in the first quarter, according to a report to be released Wednesday by the nonprofit Private Equity Stakeholder Project. The practice, known as dividend recapitalization, is gaining steam as investors hunt for yield with interest rates near historic lows. Meanwhile, health-care companies are on a stronger footing, with patient visits rebounding and the government unleashing unprecedented economic stimulus. Health-care firms have already borrowed about $3.7 billion in 2021, partly to fund payments to private equity owners, more than double the amount issued all of last year, according to data from S&P Global Market Intelligence. At the current pace, it would be the industry’s most active year for borrowing since 2015.
Blackstone Invests in Mental Health App at $1 Billion Value
Brief: Blackstone Group Inc. is leading a $100 million funding round in on-demand mental-health company Ginger, accelerating a push into fast-growing technology startups. The funds will come out of the investment firm’s growth equity arm, Blackstone and Ginger said Wednesday. The stake values the San Francisco-based service at about $1 billion, vaulting it to unicorn status. Demand for resources provided by Ginger, which connects users to behavioral health experts and services such as coaching via a mobile app, is surging in the Covid-19 pandemic. The company’s revenue has tripled in the past year. “There’s a widespread prevalence of mental health issues in this country,” said Ram Jagannath, who heads health-care investing for Blackstone Growth Equity. “Like other sectors of health care, the pandemic exacerbated the underlying trends and accelerated people’s adoption of digital platforms.”
Goldman Sends Indian Employees Back Home as Local COVID-19 Cases Rise
Brief: Goldman Sachs told all but critical staff at its operation in Indian IT capital Bengaluru to return to working from home on Wednesday, reversing moves to get staff back to one of its biggest global offices as coronavirus infections in the city grew. India earlier reported a new variant of the coronavirus as new infections and deaths nationwide hit the highest this year, prompting the imposition of new restrictions in some states. Bengaluru reported 1,280 new infections on Tuesday, according to city data, and several sources at Goldman told Reuters that teams had been told to return to working from home ahead of an all-office townhall call at 2 p.m. local time on Thursday. In March so far, nearly 14,000 new cases have been reported, more than twice the number recorded in February.
Bank Lending to Fossil Fuel Industry Down 9% in COVID-hit Year
Brief: The world’s biggest banks cut lending to fossil fuel firms by 9% in 2020 as a result of the pandemic, although funding has still risen over the past five years, a report showed on Wednesday. The 60 largest banks lent more than $750 billion to 2,300 fossil fuel companies in 2020, down from $824 billion in 2019, according to a report by Rainforest Action Network, Reclaim Finance, Oil Change International and other non-governmental organisations (NGOs). But the report said the fall, driven by record low levels of industry investment in the second half of 2020 as the pandemic hammered fuel demand, followed annual rises of 4.4%-5.5% since 2016, the year after the Paris climate accord was signed. It also followed a surge in demand from fossil fuel companies raising cheap financing in the first half of 2020, the report said after assessing the roles of banks in lending and underwriting debt and equity issues.
Moody’s Sees Quicker Business Travel Recovery in Developing Regions
Brief: Prospects for the recovery of business travel by air are highly uncertain, but it is expected to grow more quickly in developing regions than in advanced economies, said Moody’s Investors Service. “This will continue the trends seen since the global financial crisis, when growth in business travel in advanced economies lagged the overall market, with demand for leisure flying leading. “An increased focus on near-shoring of supply chains after the pandemic is likely to increase intra-regional or short-haul international business travel at the expense of long-haul trips,” the rating agency said in a note today. Moody’s said the recovery in business travel would be driven by the gradual reopening of workplaces and a latent demand to make business trips, although companies’ duty of care to employees to safeguard against Covid-19 infections before vaccinations becoming widespread would partially restrict business travel.
Dan Zwirn Invested Like a Crisis Was Coming – And Then Covid-19 Arrived
Brief: Dan Zwirn thought markets were frothy for at least five years before the pandemic. His credit shop, Arena Investors, underwrote investments as if a crisis was on its way and diversified so any one deal wouldn’t have an outsize impact on the portfolio. “Frankly a lot of stuff that got hurt was very overdone going into Covid. But people didn’t let us into those clubs in the first place,” Zwirn said in an interview. “There were no 18 percent office loans available, so we were not exposed. That gave a lot of people comfort that this is what the downside looks like.” So far, his approach has worked out, according to the Arena CEO and chief investment officer’s latest letter to clients. “Covid was a great stress-test of our approach, and we were left in a position to quickly shift to playing offense once we had taken stock, battened down the hatches, and appropriately assessed the small impact to our book,” Zwirn wrote in the investor letter.
