Powerscourt

By Powerscourt on 19/10/2020

Powerscourt Coronavirus Briefing – 19 October 2020

ANALYSIS

Has COVID-19 helped China’s place in the world? Economic data from Beijing shows how the country has benefited from its coronavirus containment strategy and how far its fortunes are starting to diverge from the West, which remains stuck in an economic quagmire with cases still soaring.

China on Monday printed a nearly 5% expansion in GDP for the third quarter, with a state-backed industrials boom starting to filter through to consumption, amid strong retail sales data. Although falling short of official forecasts, the data suggests that China will almost certainly be the only country in the world to post positive growth in 2020. China took a hardline approach to coronavirus after it appeared in Wuhan at the start of this year and has successfully stamped on any successive resurgence.

The Financial Times starts a six-part series on the pandemic today with a gripping reconstruction of the first few weeks in Wuhan. It points to a slow early response with serious consequences. It is worth a read: https://www.ft.com/content/82574e3d-1633-48ad-8afb-71ebb3fe3dee

More than 40 million people around the world have now been infected with COVID-19, according to a Reuters poll.

The US, India and Brazil remain the countries most affected by coronavirus, with COVID-19 cases in the Americas representing about half of the world’s cases. But a government-backed panel in India says the outbreak there has peaked and the daily total is easing. 

Meanwhile the second wave is well underway in Europe, with restrictions in place in most countries. Ireland faces a range of harsh new measures from today. In the US, new daily COVID-19 cases are averaging over 55,000, their highest levels since July. The case count isn’t helping President Donald Trump, standing for re-election on November 3.

But tangible signs are on the horizon that a vaccine may be approaching: vaccine makers are beginning to manufacture doses in bulk as the world awaits data and approval from regulators.

Pfizer has started manufacturing its vaccine and now has enough to enable 20 million British patients to be inoculated before the New Year, according to Ben Osborn, the UK leader of the pharmaceutical giant, once the approval is given.

This follows optimistic news about another leading vaccine candidate, from AstraZeneca, after the leader of the development programme, Professor Andrew Pollard, said it was possible that this vaccine could be ready before New Year.

Both vaccines have yet to post final stage data or to be approved, but the signs they are being manufactured shows a degree of confidence that they are destined to be approved ultimately.

Meanwhile coronavirus continues to strain at existing regional tensions in the UK. Manchester has become the crucible of a revolt by Northern leaders against the latest stage of the government’s lockdown plan.

Andy Burnham, the city’s Mayor, has objected to the Tier 3 status which central government wants to impose on Manchester without a commensurate rise in compensation. Now Boris Johnson’s government is planning to offer up to £100 million to compensate for new restrictions, according to the Daily Mail.

The stakes are high in the North of England. An NHS document leaked to the Guardian revealed that Greater Manchester is close to running out of beds to treat people left seriously ill from COVID-19.

Hospitals in Salford, Stockport and Bolton are close to maximum capacity, with no spare beds to cope with an influx of coronavirus patients, the newspaper reveals.

And finally, spare a thought for the family of Zalman Leib Teitelbaumm, a rabbi in Brooklyn, New York. Authorities have forced him to scale back plans for his grandson’s wedding today. About 10,000 guests had been expected. The authorities say that only 50 people can attend any gathering.

 

WHAT ARE COMPANIES SAYING?

 

Industrials 

Cathay Group
The Hong Kong airlines Cathay Pacific and and Cathay Dragon have announced that they expect to operate at just 10% of their pre-pandemic passenger flight capacity for the rest of this year. The airlines registered a 98.1% year-on-year drop in passenger numbers in September and the number of passengers carried during the first nine months of 2020 dropped by 83.2%. Ronald Lam, the group chief customer and commercial officer, said “September rounded off what has been an incredibly difficult summer, traditionally the peak passenger travel season of the year,” and announced that the airlines would likely be operating at 50% capacity during 2021.

 

Financials & Real Estate 

Rightmove 
The UK’s largest property portal, Rightmove, has said that asking prices for homes were 5.5% higher than in October last year. The average asking price now stands at a record 323,530 pounds. A surge in Britain’s housing market this month has pushed up asking prices by the most in more than four years, with buyers ready to pay a premium for larger properties after their lockdown experience this year.

 

Retail & Consumer

Danone
Leading French food & beverage company Danone has said it is launching a review of its assets and reshaping its management in response to the challenges brought about by the coronavirus pandemic. The French food group is looking at strategic options for 500 million euros worth of assets in Argentina for North American plant-based brand Vega. It has also stated that it aims to “rapidly reconnect” with its goal to deliver mid-term like-for-like sales growth of 3-5%. It reinstated its forecasts for 2020, targeting a recurring operating margin and 1.8 billion euros of free cash flow. Danone also announced the departure of its chief financial officer, Cecile Cabanis, who will be replaced by Juergen Esser.

Philips
Dutch health technology company Philips has reported a 32% jump in third quarter core earnings. COVID-19 has spurred demand for hospital equipment needed to help patients battling the disease. Philips’ much-better-than expected growth was mainly driven by a 42% increase in the sales of the connected care division, which makes monitoring and respiratory care devices needed for coronavirus patients.

 

IN THE NEWS

Europe’s second wave raises threat of double-dip recession – THE FINANCIAL TIMES

Recovery will take longer than expected, say finance chiefs  – THE TIMES

UK could get 40m Covid vaccine jabs by New Year as Pfizer begins roll-out  – THE TELEGRAPH




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