Powerscourt

By Powerscourt on 30/11/2020

Powerscourt Coronavirus Briefing – 30 November 2020

ANALYSIS

Introducing pandemic-induced lockdowns is the easy bit. Lifting them is another thing entirely, as governments across the world are finding out.

As Europe and the US grappled with the second wave of the Covid-19 pandemic, they imposed lockdowns on both sides of the Atlantic, of varying degrees and severity depending on country, region and politics. In many places these lockdowns are coming to an end in the run-up to Christmas.

Yet managing the exit from the deep freeze and restarting economic activity are proving difficult. Governments are struggling to get the balance right between enabling as many shuttered businesses as possible to reopen and ensuring that lifting the restrictions does not trigger the sort of mass public gatherings and activities that could contribute to another wave of the virus.

That involves compromises, and is a reminder of the difficulties of managing this pandemic in the face of increased push-back from interest groups and political opponents. Much is made of the popular hostility in the US to federal or state measures to combat the virus. Yet opposition to lockdown is also rising in Europe, in countries such as Germany, Spain and the UK.

One leader under pressure is Boris Johnson, whose plan for reopening the UK this week is under fire not just from the Opposition and some scientists but from some of his own MPs in the Covid Recovery Group. He is struggling to explain and justify the restricted nature of the reopening, which spans three different levels throughout the country, including variations, depending on the activity, in England, Scotland, Wales and Northern Ireland.

Johnson’s multi-layered plan is to be discussed and voted on in parliament on Tuesday. In a letter to Tory MPs at the weekend, he said the key objective remained to ensure that the NHS was not overwhelmed by the latest surge in cases. While infection rates were beginning to level off, “they are still at a high level and the pressure on hospitals remains severe,” he wrote.

In France, the State Council, the country’s highest court, has asked the government of President Emmanuel Macron to reconsider the restriction on attending church services, arguing that limiting the number of worshippers to 30 is a disproportionate response and breaches civil rights. The mayor of New York has announced that some of the city’s schools can reopen, after criticism that he had got his priorities wrong, favouring keeping restaurants open but not sending children to school.

South Korea’s government has announced tighter nationwide restrictions on public gatherings, as the number of daily infections hovers around 500.

The silver lining is that the good news on the vaccine front continues. The Financial Times reports that health officials on both sides of the Atlantic are optimistic that vaccination can begin by the end of the year, which is just a month away. Anthony Fauci, the US infectious diseases specialist, told NBC News on Sunday that vaccinating those in the most at-risk groups would “likely, almost certainly” begin by the end of December.”

Asian markets are lower today on the last day of November, one of the best month’s in equity market history.

 

WHAT ARE COMPANIES SAYING?

Industrials

EasyJet plc
It has been reported that the British multinational low-cost airline group has called in crisis experts AlixPartners to assist with cash flow forecasting amid crisis talks with Whitehall officials and banks. The airline must repay a £600m loan under the terms of the Treasury’s Covid Corporate Financing Facility. More than £800m must be repaid to banks in February 2022. City sources said that easyJet was looking to combine new funding from the UK taxpayer alongside fresh bank loans. EasyJet had its finances red-flagged by auditors earlier this month as it slipped into the red for the first time with a £1.3bn pre-tax loss.

Civitas Social Housing PLC
The leading care-based social housing REIT today presented its interim results for the six months ended 30 September 2020. The Group announced ongoing strong resilience to Covid-19, reporting that there had been very low incidence of Covid-19 across its portfolio and that there had been minimal operational disruption from the pandemic. Michael Wrobel, Non-Executive Chairman of the Company, commented: “The demand for care-based housing continues to grow, with Covid-19 having reinforced the benefits of safe, secure homes over long-term institutionalisation. During the period, CSH has continued to cement its position as the market leader in care-based housing investment and management, delivering sustainable investor returns and outstanding community-based housing whilst also protecting the public purse.”

 

Consumer & Retail

Frasers Group
The British retail group, best known for trading predominantly under the Sports Direct Brand, has confirmed today that it has made an offer and provided draft terms to the Arcadia Group for a loan of up to £50 million and is now awaiting a substantive response. It also announced that should the Company and Arcadia Group’s efforts to agree an emergency funding package fail and the Arcadia Group enter into administration, the Company would be interested in participating in any sale process. Arcadia Group is on the brink of falling into administration, following the effects of the coronavirus pandemic. If it does enter administration it would be the pandemic’s biggest retail casualty so far.

WW International Inc.
The global weight loss products and fitness company Weight Watchers is reportedly planning to shed up to half its UK coaches as soon as next week. The move comes as the brand tries to shift its business online as a result of the pandemic and amid increasing competition. The US company could make up to 50 percent of its nearly 800 UK-based coaches redundant, according to sources, although some of the departures will be voluntary. A WW spokesperson said: “As the ongoing Covid crisis has forced the closure of our workshops around the world, we have had to make difficult decisions that will impact some of our valued team members. With the accelerated growth of our digital offerings in both our WW app and the launch of virtual workshops, we are taking this time to look at our physical footprint.”

Punch Pubs & Co
The co-founder of the UK pub and bar operator Punch Pubs & Co, Hugh Osmond, has warned this morning that Boris Johnson’s latest restrictions will “destroy” the industry and seriously harm thousands of people’s lives. “If he destroys all those jobs and businesses, he will not achieve his levelling up,” Mr Osmond said on Sky yesterday. “There will be extensive misery, more health problems, more suicides, more deaths and a much worse economy than he could ever imagine.” The restrictions would cost pubs and restaurants £7.8 billion in lost sales in December, according to UK Hospitality, the trade body.

Reed Exhibitions
The world’s leading events business belonging to parent company RELX, has embarked on a redundancy programme in response to the industry’s slow recovery from the coronavirus pandemic. Just over ten percent of the company’s workforce, or 500 members of staff, have already left or will be gone by the end of the year. The chief executive of Reed’s UK business and its regional head of finance are among senior executives set to leave, while other executive roles in marketing, sales and commercial are being merged.

 

Financials & Real Estate 

Sealand Capital Galaxy Limited
The IT/digital investments and acquisitions company has today announced the extension of the contract between its subsidiary, New Sky Global Media Limited, and Suncity Leisure Services. The Company announced on 6 November 2020 that NSG had been awarded a new contract by Suncity, a longstanding client, to set-up and operate a new Douyin (more commonly known outside of China as TikTok) campaign to promote Suncity’s opportunities around the 67th Macau Grand Prix. This project has now been formally extended and NSG will provide Douyin with operation and management services for the Suncity Douyin Official Account until 31 March 2021.  Nelson Law, Executive Chairman of the Company, commented: As Macau is now virtually COVID-19 free, and customs clearance with various parts of China has been reestablished, NSG has also begun to discuss further marketing plans for Suncity in 2021.”

 

IN THE NEWS

Coronavirus causes sharp rise in UK poverty, studies find – Financial Times

Hope for northern England as Covid rates halve – The Times

Shops can stay open for longer in run-up to Christmas to help the high street, says minister – The Telegraph




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