Powerscourt

By Powerscourt on 16/10/2020

Powerscourt Coronavirus Briefing – 16 October 2020

ANALYSIS

As Wave Two engulfs Europe, the urgency for a coronavirus vaccine has never been greater. Exhausted, increasingly cynical citizens face a bleak few months as officials in each region try variations on the theme of restricting movement to get through the winter period.

The first country to get a vaccine candidate approved will win huge global capital.

Alleged Russian propaganda reported in The Times, apparently designed to undermine and spread fear about the Oxford University-led coronavirus vaccine, illustrates the extent to which vaccine nationalism has become not just a key policy goal but a major propaganda effort.

Pictures and memes apparently originating in Russia lead on the idea that because the vaccine relies on a chimpanzee viral vector, it could turn people into monkeys.

The toxic combination of anxiety and crude digital propaganda may help to explain, perhaps, why confidence in vaccination among citizens is so low, just as it should be a key priority for everyone.

A poll by the Wall Street Journal/NBC News found that half of Americans surveyed would want to wait some time before taking the vaccine. Nearly 20% would not have one at all.

Concern about the perceived safety of the vaccines may have been amplified by the fact that several of the leading vaccine trial candidates are currently on hold due to safety concerns. Vaccine test programmes from Johnson & Johnson and AstraZeneca have been paused while these are investigated. This sort of halt is routine – but amid paranoid levels of scrutiny around the world it has not supported confidence in the idea of vaccination.

Europe has now overtaken the US as the virus epicentre of the developed world, with daily confirmed COVID-19 cases per million people on a seven-day basis now higher than the US.

Rising numbers in all European countries are forcing politicians to reimpose restrictions across the continent, triggering COVID fatigue and, in turn, growing political unrest.

On Thursday, France, Italy, Poland and Germany all recorded their largest daily rises in new cases since mass testing began. Russia reported its highest number of daily deaths since the start of the epidemic.

Schools in Southern Italy will close for two weeks while Germany has ordered bars and restaurants in high-risk areas to close earlier. The Netherlands has closed all bars and coffee shops. Portugal has imposed what it ominously describes as a “state of calamity”.

The UK on Thursday was forced to step up restrictions on people in London, meaning that from Saturday households in the Capital will be prevented from mixing indoors. London’s mayor Sadiq Khan warned London’s nine million citizens that they face a “difficult winter ahead”.

Prime Minister Boris Johnson is facing growing discontent over the UK government’s patchwork approach to coronavirus restrictions around the country. He faces a full-throated political rebellion from MPs in the North of England after Liverpool, with soaring infection levels and hospital ICU beds at near capacity, was put under severe restrictions. The government is trying effectively to force many other parts of the North into the same level of restriction but wants local politicians to take the lead. Local politicians, however, are not obliging.

Andy Burnham, the Mayor of Greater Manchester, has become a de facto spokesman for people in the region who feel that the restrictions hit people in the North disproportionately hard and that the Westminster government is not properly compensating people for the inevitable loss of income that the restrictions will bring.

The bleak picture in Europe, combined with jitters ahead of the forthcoming US election, has finally taken the shine off Asian equities, with Chinese, Australian and Japanese stocks down into Friday.

 

WHAT ARE COMPANIES SAYING?

 

Industrials 

Serco
The outsourcing company provided an unscheduled update, in which it upgraded its full year revenue guidance as a result of strong revenue growth in the third quarter as well as good cost control. The company took the opportunity to address its role in the NHS Test & Trace programme, stressing that the part it plays is limited and specific, and that it believes it has performed that role to an outstanding standard.

 

Financials & Real Estate 

Man Group
The investment management business reported that funds under management had increased to $113.1bn in the third quarter, with the increase made up partly of net inflows and positive investment performance of $1.7bn each. CEO Luke Ellis said: “Our diversified range of strategies, our people and technology and a sustainable business model, underpinned by our strong and liquid balance sheet, allow us to manage the firm for the long term. Man Group is well-placed to withstand volatile periods and to grow over time, delivering increasing value to all our stakeholders.”

Jupiter Asset Management
The fund management group issued a Q3 trading update this morning. It highlighted that the acquisition of Merian Global Investors introduced £16.6bn of AUM on 1 July 2020, with operational integration achieved by 30 September 2020. Net outflows in the quarter of £1.0bn were partially offset by £0.8bn of market returns. The group had AUM at 30 September 2020 of £55.7bn, an increase of £16.5bn in the quarter driven by the acquisition of Merian.

 

Retail & Consumer

JD Wetherspoon
The pub chain announced its full year results, reporting a 30% drop in sales and a loss before tax of almost £45m. CEO Tim Martin took the opportunity to criticise the government’s recent changes to restrictions, in particular the 10pm curfew: “The company and the entire hospitality industry need a more sensible and consistent regulatory framework in which to operate – the current environment of lockdowns, curfews and constantly changing regulations and announcements threatens not only pub companies, but the entire economy.”

Lookers
The motor retail group reported that Q3 trading was better expected, selling 13.6% more used cars than in the same period last year. The company said its Q3 performance largely offset its losses in H1 caused by the lockdown. CEO Mark Raban said: “Our decisive self-help measures, combined with better than expected trading in Q3 and strong support from our brand partners, have helped the Group emerge from lockdown in a strong position.”

 

IN THE NEWS

Markets slide on fears of new pandemic restrictions – THE TIMES 

Ministers handed £280,000 Covid contract to business of executive in voluntary public role – FINANCIAL TIMES 

Pub bosses plead for more support as London hit with tier 2 measures – THE TELEGRAPH




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