By Powerscourt on 09/11/2020
Powerscourt Coronavirus Briefing – 09 November 2020
Just when you thought you’d come to terms with living with COVID-19, the frightening prospect looms of a new and more virulent strain of the virus that is more likely to cause resistance and is less responsive to vaccines.
Last week it emerged that a mutation of the virus had been found to jump from mink to humans in Denmark, prompting Danish authorities to cull 17 million mink in the country.
Now the UK is on red alert. The Daily Telegraph reports that every hospital in the UK has been ordered to isolate any patients suspected of having “mink virus” a strain of COVID-19, following the receipt of a letter from deputy Chief Medical Officer Jonathan Van-Tam. The letter warns that any coronavirus patients who recently travelled to Denmark must be isolated, treated in specialist centres and gene tested for the new strain.
President-elect Joe Biden made it clear that planning is already underway for the new US administration with a slew of policy initiatives leaked to the media. One of the first items on his agenda will be the soaring virus caseload, particularly in the US West, Midwest and South.
According to Johns Hopkins, nearly 130,000 new cases were recorded on Saturday, with more than 1,000 deaths, bringing the total caseload for the US to over 10 million. In some regions, the hospitals system is straining at the seams and pressure is growing for restrictions mirroring those underway in Europe to be implemented, such as restricting indoor service at bars. Utah’s Governor, Gary Herbert, has declared a statewide state of emergency and has mandated mask-wearing across the state.
Biden is today expected to unveil a 12-strong taskforce of experts to deal with the pandemic. Newspapers reported that these will include former surgeon general Vivek Murthy, former Food and Drug Administration commissioner David Kessler and Dr Marcella Nunez-Smith of Yale University.
At his victory speech on Saturday, Biden said he would “spare no effort – or commitment – to turn this pandemic around”.
Reuters reports that Beijing Wantai Biological Pharmacy Enterprise Co Ltd plans to start a mid-stage clinical trial of a nasal spray vaccine in China, clinical trial registry data showed. Spray vaccines can trigger specific immune responses in airways by mimicking the natural infection of a respiratory virus, and are in routine use to vaccinate against diseases such as influenza.
China has several vaccines for COVID-19 in development of which the leading one is from CanSino Biologics and is now awaiting final data in a Phase III trial.
The UK’s spy agency GCHQ has begun trying to disrupt anti-vaccine propaganda, according to the Times. The paper says the agency is using tools developed to tackle disinformation which was used by Islamic extremists, to target hostile states.
Meanwhile the UK’s pilot testing scheme – the government’s latest attempt to claw back control over its beleaguered test and trace programme – got underway last week in Liverpool. Now a leading adviser to the government has warned that just half of COVID-19 cases in the UK are being identified.
Mark Woolhouse, professor of infectious disease epidemiology at the University of Edinburgh, said that attempts to control the virus in Britain are currently being done “with one hand tied behind our back”.
Its widely known that tech behemoths such as Amazon and Facebook have benefited exponentially from shifts in consumer behaviour engendered by the pandemic, demonstrated by their soaring share prices and huge growth in revenue and profits. Forbes Magazine highlights the way the pandemic has turbo-charged one particular section of the digital economy: consumer fintech companies which benefit from digital payments. Forbes says at least five fintech entrepreneurs around the globe have become billionaires as a result of the growth of their businesses due to the pandemic.
They highlight Nick Molnar and Anthony Eisen, whose Australia-based business Afterpay allows consumers to spread the financing cost of small-ticket items. Others include Chris Britt, founder of the digital bank Chime and Vlad Tenev and Baiju Bhatt, co CEOs of stock trading app Robinhood.
Asian stocks have surged into Monday morning, continuing the relief rally in the US as it became clear that Joe Biden had won the presidency with expectation of a Republican-controlled Senate.
WHAT ARE COMPANIES SAYING?
Taylor Wimpey plc
The British based housebuilding company announced in a trading update today that it had made good progress in the second half of the year to date, maintaining a robust sales rate and building a strong forward order book. Chief Executive Officer Pete Redfern commented “The trading backdrop remains resilient and the quick recovery of the housing market is testament to the underlying strength of demand and supportive lending backdrop. Looking ahead, we are on track to deliver full year 2020 results towards the upper end of market expectations and with strong operational momentum and positive forward indicators, our confidence in 2021 has increased.”x
Swiss multinational specialty chemical company announced today that it was further expanding production in France and positioning itself for infrastructure investments. COVID-19 has sparked a contraction in France’s construction sector this year. A recovery is forecast for 2021, with growth of more than 4%. An important driver of this growth will be the government stimulus program worth the equivalent of an estimated CHF 105 billion. This program will include investment in the country’s rail infrastructure and in extensive building renovations. Ivo Schaedler, Regional Manager EMEA: “The infrastructure construction market is generally characterized by a high level of resilience in crises. Even in 2020 capital spending remains strong. With the commissioning of the new facilities at the Gournay-en-Bray plant, our aim is to tap into business potential in France and in north and western Europe.”
Consumer & Retail
The Gym Group plc
The nationwide operator of low-cost gyms announced an operations and trading update this morning. It confirmed the closure of its 167 gyms on the 4 November 2020 following the introduction of the 4-week lockdown by the UK Government. It reported that since re-opening, the Company has traded profitably and cash generatively. It has invested £4.0 million of capital between 31 July and 31 October in the completion of four new sites. CEO Richard Darwin stated “The business has traded profitably during the period and we are confident that our strong financial position, with very low levels of net debt and close to £70 million of unused facilities, will provide the platform to resume our growth path once we reopen.”
Financials & Real Estate
The UK’s largest asset manager is launching an impact investing fund designed to support emerging and frontier market companies hit by the coronavirus pandemic. The COVID-19 support fund has secured $140m of funding towards its $350m target and will support micro-entrepreneurs and small companies in the developing world, with the aim of reducing poverty and inequality. Emerging and frontier markets have not benefited from wide-ranging government relief programs and Peter Fanconi, BlueOrchard chairman, warned that the effects of the pandemic risked reversing progress made towards reducing global poverty and inequality.
TP ICAP plc
The global interdealer broker has issued a trading update for the nine months and third quarter ended 30 September 2020. Revenue for the first nine months was £1,378m and only 1% lower than the prior year on a constant currency basis (2% lower as reported). Nicolas Breteau, Chief Executive Officer said: “Over a nine-month period of substantial economic dislocation, TP ICAP’s business has been resilient. We have implemented a targeted cost efficiency programme that will provide further support to our earnings power in an operating environment that remains uncertain.”
S4 Capital plc
The new age/new era digital advertising and marketing services company posted a trading update for the three months and nine months ended 30 September 2020. Despite the impact of COVID-19, the group reported a very strong third quarter performance and is now more in line with its target of doubling organically in three years by 2021. Revenue was up almost 53% to £86.4 million and gross profit up almost 79% to £75.3 million. Sir Martin Sorrell, Executive Chairman of S4Capital plc said: “Covid-19 has acted as an accelerator for search, social and ecommerce. Our consistent, very strong organic gross profit growth of almost 16% so far this year and almost 23% in the third quarter, indicates that we are well positioned in the digital sweetspot of an otherwise stagnant advertising and marketing industry*.”
Ultra Electronics Holdings PLC
The British application-engineered tailored solutions company published its Q3 2020 update today. It stated that despite the ongoing coronavirus pandemic, all its facilities remain open and product and there has been no significant disruption to demand or operational performance. Order intake remains strong with good revenue growth and operating margins are slightly better than expected due to lower indirect costs related to the pandemic.
The German digital solutions provider, formerly known as QSC AG, posted its quarterly results this morning. q.beyond announced that, despite what it described as the “severest recession in post-war German history”, it had increased its revenues for the fifth consecutive quarter, in this case to €35.1 million, and had generated year-on-year growth of 9%. The Covid-19 crisis has created particularly strong demand for cloud solutions, with a key focus on the implementation and operation of digital workplaces. q.beyond stated that while coronavirus-related restrictions on contact held back the consulting business on location at customers, the broad-based positioning of this segment paid off, with SAP operations and application management hardly affected by the lockdown.
IN THE NEWS
One in eight shops failed to reopen after first lockdown – THE TIMES
UK urged to stockpile medicines to confront Covid and Brexit – FINANCIAL TIMES
Exclusive: ‘Mink virus’ alert as hospitals ordered to keep suspected cases in isolation – THE TELEGRAPH