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Our briefing for Wednesday, November 17, 2021:
Nov 17, 2021 3:05:16 PM
- In the United States, 34 lawsuits challenging the Biden administration’s vaccine mandate were consolidated in a single federal appeals court on Tuesday. The mandate, which was announced by Biden in September, requires businesses with 100 or more employees to ensure their staff are fully vaccinated, by a deadline of January 4. The vaccine mandate is extremely controversial in the United States; opponents say it infringes on their individual liberties. The U.S. Court of Appeals for the Sixth Circuit will determine the fate of the policy, a court that has 11 Republican-appointed judges and five judges appointed by Democrats. Experts say it’s highly likely that the issue will reach the U.S. Supreme Court.
- In Canada, the federal government is set to announce changes to Covid-19 measures at the Canadian border. Health Minister Jean Yves-Duclos said on Tuesday that the government plans to make the announcement in the coming days. Currently, there’s a requirement for fully vaccinated travellers entering Canada to provide a negative Covid-19 test. The government has been under pressure for weeks to do away with the requirement, which is part of an order-in-council due to expire on Sunday. "Nov. 21 is the time at which these orders-in-council must be renewed and with the renewal will come announcements," Duclos said.
- In the United Kingdom, coronavirus vaccine research has become a prime target for cyber attacks, according to the National Cyber Security Centre (NCSC). The watchdog said it handled a record 777 incidents between August 2020 and September 2021, and about 20% of the organizations that the agency had to support were in the healthcare sector, including hospitals and vaccine research centres. The NCSC says protecting the healthcare sector became a major priority over the time period, and that it will support the improvement of online security for an additional 3 million employees working in the sector.
- Germany is set to introduce stricter measures for unvaccinated people as cases across the country continue to rise. The Robert Koch Institute reported 52,826 new cases and 294 new deaths, bringing the country’s death toll to 98,274. Less than 70% of the German population is fully vaccinated, one of the lowest rates in Western Europe. Restrictions on unvaccinated people came into effect in areas like Berlin and Saxony, where hospitals are at risk of becoming overwhelmed. They have introduced their so-called 2G rules, which exclude unvaccinated people from all non-essential facilities.
- South Korea reported 3,187 new coronavirus cases, nearly matching a one-day record set in September. Questions are now being raised over whether the country eased pandemic restrictions too quickly, as they moved to “live with the virus” back in early November. Officials intended to restore pre-pandemic normalcy and had hoped that vaccination rates would keep hospitalizations and deaths down. There was however, a rise in fatalities among senior citizens who rejected vaccines or had waning immunity. In response, officials have pushed to speed up the administration of booster shots, shortening the interval period from six months to four months for people ages 60 and older and people in long-term care homes.
- In New Zealand, the city of Auckland will reopen to fully vaccinated people or those with a negative Covid-19 test on December 15. Prime Minister Jacinda Ardern made the announcement as New Zealand reported 194 new coronavirus cases and one death, bringing the country’s death toll to 36 since the pandemic began. Some 82% of New Zealanders are now fully vaccinated, with the 90% threshold expected to be reached by mid-December. “Aucklanders have faced restrictions for an extended period of time to keep the rest of New Zealand safe. But with increased rates of vaccination it’s time to open up the ability to travel again,” Ardern said.
Covid-19 – Due Diligence And Asset Management
ECB Warns of Market ‘Exuberance’ as Economy Recovers From Pandemic
Brief: Increasingly stretched prices in property and financial markets, risk-taking by non-banks and elevated borrowing pose a threat to euro-area stability, the European Central Bank warned. While the economic recovery from the coronavirus crisis means near-term risks have dissipated, vulnerabilities are accumulating with potentially grave consequences down the line, according to the Frankfurt-based bank. “Concerns particularly relate to pockets of exuberance in credit, asset and housing markets, as well as higher debt levels in the corporate and public sectors as a legacy of the pandemic,” it said Wednesday in its Financial Stability Review, echoing former Federal Reserve Chairman Alan Greenspan’s description of the dot-com bubble in the 1990s.
Private equity firms prevented from capital deployment due to conditions
Brief: Over two-thirds, or 67%, of private equity firms have cited market conditions over the last year as a key barrier to deploying capital, according to a new market report from Gallagher, although 57% said the out-turn over the period was either better than expected or exactly as expected. The report, which surveyed 150 private equity firms across the US, UK and Asia, also revealed this was significantly down compared to findings in last year's survey, in which 88% of firms said the out-turn was in line with their expectations. Limited capital capability was felt most acutely in the UK, with 72% of firms revealing conditions prevented capital deployment, compared to 62% of firms in Singapore, where it was least acute, possibly reflecting the harsher effects of the pandemic across Europe.
Greed outpacing fear in world markets, Goldman Sachs CEO says
Brief: Greed is outpacing fear in world financial markets as investors respond to the pandemic recovery, Goldman Sachs Chief Executive David Solomon says, adding that such periods of exuberance are usually not long-lived. Solomon told Bloomberg's New Economy Forum in Singapore on Wednesday the global economy was facing a 'complicated time' as activity began to strengthen after the sudden shutdown in many parts of the world in 2020 because of coronavirus. The unprecedented levels of stimulus ordered by governments and central banks, he said, had led to exuberance in certain markets. "I think markets generally when I step back and I think about my 40 year career, there's been periods of time when greed has far outpaced fear. We were in one of those periods of time," Solomon told the Singapore event.
London Firms Sign Up for Acres of New Offices to Lure Workers
Brief: Corporate executives are signing up for acres of new office space in London as they attempt to lure workers back to their desks. Demand for offices in the U.K. capital has rebounded sharply with businesses committing to 819,000 square feet of new space in the six months through September, British Land Co. said in a statement Wednesday. That’s the equivalent of more than 10 soccer fields and includes a new headquarters for law firm Allen & Overy at the developer’s 1 Broadgate development, which is fully pre-leased ahead of completion, and space to Facebook-owner Meta Platforms Inc. There is a “renewed optimism in London offices with occupiers more confident of committing to space as their employees return to the office,” the landlord said in a statement. “Demand is firmly focused on the very best space, with an emphasis on sustainability, wellness, shared and flexible space and excellent transport connections.”
Global dividends close in on pre-pandemic peak
Brief: Global dividends are expected to hit pre-pandemic levels by the end of the year, according to Janus Henderson, as third quarter figures surge.This is particularly the case for companies in Europe, parts of Asia and emerging markets, the asset management firm said.Dividends jumped 22% year-on-year reaching $403.5 billion, an all-time high for third quarter figures.The majority of companies globally either raised their dividends or held them, while mining dividends were found to drive two thirds of the increase. Recently restored banking dividends also made a significant contribution. Janus Henderson said dividends are now expected to surpass the pre-pandemic peak by the end of December 2021.
