Powerscourt

By Powerscourt on 18/08/2020

Powerscourt Coronavirus Briefing – 18 August 2020

ANALYSIS

The first coronavirus vaccine could be approved by December according to Kate Bingham, head of the UK’s vaccines taskforce.

Ms Bingham told Sky News the two most promising candidates were the so-called Oxford Vaccine, backed by UK drugs giant AstraZeneca, and a candidate from German developer BioNTech. The UK has ordered doses of six as of yet untested vaccines.

If Ms Bingham’s prediction is true it won’t come a moment too soon for the British government, mired in another crisis over the botched handling of school exam results and allocation of university places. The latest education mess, affecting parents who for months have struggled to educate their children while they hold down jobs at home, has created the perception of a government in real jeopardy despite its majority.

A vaccine will come too late for 7,000 jobs at Marks & Spencer, long the favourite shopkeeper of the nation, which announced a “streamlining” this morning after a collapse in non-food sales (more below).

Baroness (Dido) Harding has been appointed as interim head of the UK’s brand new Health Protection Institute which will combine the UK’s existing test and trace programme with Public Health England, prompting the raising of some eyebrows. The former TalkTalk CEO, who was appointed to the Lords by David Cameron in 2014, has been praised for her presentation skills and ability to grasp a difficult brief, but the UK’s test and trace programme is still struggling to get off the ground after months and it isn’t clear how merging it with another department will resolve this.

Today’s newspapers, even the staunchly Conservative Daily Telegraph, are excoriating in their assessment of Boris Johnson’s government’s handling of the latest crisis. They have highlighted the Prime Minister’s tendency to value loyalty – towards those like Ms Harding and the hapless education secretary Gavin Williamson – ahead of competence. In a striking indication of how poorly the government is perceived to have handled the various challenges of the past few months, the Telegraph suggests that the Conservative brand may have become “toxified” for a generation.

A similar scenario is playing out in the US. Overnight the former First Lady, Michelle Obama, told a virtual Democratic National Convention that US President Donald Trump is “the wrong President” as she and others urged voters to back Democrat challenger Joseph Biden at the forthcoming US election.

Airlines and airports, desperate to return some normalcy to international travel, will lobby a UN-led task force meeting on Tuesday to recommend countries accept a negative COVID-19 test within 48 hours of travel as an alternative to quarantines, Reuters has reported.

The President Elect of the International Society of Infectious Diseases, Paul Tambya, said on Monday there is evidence that coronavirus is mutating to become a less deadly disease. The D614G mutation of the novel coronavirus found in Europe, North America and parts of Asia may be more infectious but appears less deadly, Mr Tambya told Reuters.

In Australia genomic sequencing has played a critical part in the detective work involved in tracing the virus. In Melbourne, genomic sequencing showed that more than 90% of a second wave of coronavirus cases that have impacted the state of Victoria could be linked back to an outbreak from a single family who returned from overseas and served the government-mandated quarantine period in a hotel.

Asian markets opened slightly up on Tuesday, tempered by continued anxiety about the US government’s increasingly aggressive tone towards China. The Nasdaq on Monday surged to a record close, lifted by technology stocks. London opened lower today.

 

WHAT ARE COMPANIES SAYING?

 

Retail & Consumer

Marks and Spencer
The UK retailer has said it will cut 7,000 jobs over the next three months as it overhauls its business in the latest sign of how the coronavirus pandemic has disrupted the high street. The FTSE 250 group said many of the reductions will be made through voluntary redundancies and early retirement as M&S cuts jobs in its support centre, regional management and in its UK stores M&S said the plans are part of a strategy to “streamline the business both at stores and management level” as it contends with the changes to the industry caused by the pandemic. “These proposals are an important step in becoming a leaner, faster business set up to serve changing customer needs,” said chief executive Steve Rowe

Coles
Australian supermarket chain Coles posted its first full-year profit growth in four years on Tuesday, partly due to coronavirus-induced panic buying. Coles recorded earnings before interest and tax of A$1.76bn, up from A$1.32bn in 2019, which was an 8.3 per cent decline on the previous year. Net profit after tax for the full year grew 7.1 per cent to A$951m using comparable accounting measures. Sales rose 6.9 per cent to A$37.4bn, with those from supermarkets climbing 6.8 per cent to $33bn, faster than the sector average of 5.9 per cent. Coles’ results came in higher than estimates. Analysts expected revenue of A$37.1bn and earnings before profit and tax of A$1.56bn.

 

Industrial 

BHP
The world’s biggest mining group has announced plans to exit production of polluting thermal coal, as it reported a 4 per cent fall in underlying net profits to $9.1 billion. BHP said that significantly lower prices for thermal and coking coal and for oil as a result of the coronavirus pandemic had offset higher prices and profits from its biggest commodity, iron ore. Its profits were lower than analysts had expected. Mike Henry, BHP’s Chief Executive, warned that it expected most major economies except China to “contract heavily in 2020”. However, BHP sees the world economy “rebounding solidly” during 2021

Wood
The engineering and consultancy company has reported a 20.6 per cent fall in first-half core earnings as the coronavirus-driven oil price crash dealt a major blow to its global energy clients. The British company said it will not pay an interim dividend. Wood’s adjusted earnings before interest, tax, depreciation, and amortization came in at $305 million for the six months ended June 30, from $384 million last year.

Persimmon 
The house builder’s pre-tax profit fell 42 per cent in the first half of the year, but the company said it had had an “excellent start” to the second half as market sentiment improved. Dave Jenkinson, Group Chief Executive, said there had been “significant disruption”. But he added: “The group’s preparedness, agility and strength ensured a robust first half performance with 4,900 new home completions.” He said that “cautious optimism” meant Persimmon proposed “a modest interim dividend of 40p per share”. “Our strong opening work in progress position and excellent build rate through the summer give us confidence in a positive second half outturn.”

 

IN THE NEWS

Scramble for university places after A-level exam U-turn – The Times

‘Frugal four’ fight to protect EU budget rebates – Financial Times

Pandemic now driven by 20s, 30s, 40s group, many asymptomatic: WHO – Reuters




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