By Powerscourt on 05/02/2021
The magic number is 75 (out of 100). That is the level of inoculation needed to reach herd immunity so that society can return to vaguely pre-pandemic normality. Bloomberg has launched its vaccination tracker to predict when each country and region will hit the critical 75% level. Based on current rates of vaccination, Israel will get there in two months, the UK by September and the US by the end of the year. It would take the EU over two years and the world seven years. But these projections are based on current rates of vaccinations. There are currently 8.5 billion doses either in production or pre-production. Timelines will shorten as soon as vaccination rates start cranking up.
Worryingly however, surveys in the US, Germany and France suggest that up to a quarter of their populations would refuse to take the jab.
The slow pace of vaccine rollout in the EU is causing political tensions to ramp up in the bloc’s two big member states. German newspapers are reporting that Olaf Scholz, the finance minister, launched into a highly personalised attack on Ursula von der Leyen, president of the European Commission, during a cabinet meeting. In words that can hardly be described as being lost in translation, he said the Commission performance was “really shit.” Scholz is a member of the junior Social Democrat party and opposed the appointment of von der Leyen, who is a close ally of Merkel. The move was also seen as Scholz trying to distance himself from the senior party in government and exploit wider tensions in the country with the pace of inoculation ahead of federal elections later this year.
Emanuel Macron, the French president, is also coming under pressure. His government resiled from implementing a third nationwide lockdown on Tuesday for fears that simmering tensions could spill over into widespread violent demonstrations.
For both countries the supply of vaccines can’t come quick enough. In that respect, there was some good news. Johnson & Johnson has applied to the US FDA for authorisation for its single dose Covid vaccine. It is expected to apply to the European Medicines Agency later this month. The J&J jab is seen as a gamechanger in the fight against the pandemic. It only requires one injection and it can be stored at room temperature, which makes it logistically easier to roll out. Many EU countries have prohibited the use of the Oxford/AstraZeneca vaccine for over 65s, which will slow even further the rate of inoculation as they are currently reliant on the Pfizer and Moderna jabs to cover this age cohort. Both vaccines require two injections and need to be stored at -70C. The arrival of the J&J jab would likely mean that, theoretically at least, the EU could hit a 70% inoculation target by the end of the summer.
The UK government will force all arrivals from coronavirus hotspots to quarantine in assigned hotels at a cost of £80 a night. It is expected that the move will significantly reduce the current rate of 1,000 people arriving in the country every day.
Asian markets and US and European futures all climbed overnight on data which suggests that the US labour market is healing and improving Covid trends. The Biden administration’s willingness to progress its $1.9 trillion fiscal stimulus package is also helping investor sentiment.
WHAT ARE COMPANIES SAYING?
Energy bills will rise for about 15 million UK households from April after the regulator Ofgem lifted the price cap on tariffs back to pre-pandemic levels. Ofgem said that for six months from April, the price cap will increase by £96 to £1,138 for 11 million default tariff customers, and by £87 to £1,156 for 4 million pre-payment meter customers. It is the first rise in the energy price cap in two years, more than wiping out the £84-a-year cut Ofgem announced in October 2020.
Consumer & Retail
French Connection, the high street fashion retailer that has suffered from COVID-19 disruption. has received separate approaches regarding potential offers for the chain. Shares in the company jumped yesterday, and the company today said its board notes the recent share price movement and confirms it has received separate approaches from each of Spotlight Brands in conjunction with Gordon Brothers International LLC, and Go Global Retail in conjunction with HMJ International Services.
On The Beach
Online travel agent On The Beach today warned demand from consumers for summer holidays remained sharply down despite vaccine hopes. The travel and tourism industry was appalled when senior ministers urged Brits not to book holidays abroad this year, and On The Beach’s numbers today showed continuing weakness in bookings. Reservations for “forward holidays” was down 83% at the company in the past four months, hit hard by the latest round of restrictions and the group has pulled all holidays due to depart before 1 May.
RedCat Pub Company
One of the world’s biggest investment firms is backing former Greene King boss Rooney Anand’s £500m swoop on Britain’s beleaguered pub sector. Los Angeles-based Oaktree is providing the financial firepower behind RedCat Pub Company, injecting £200m to capitalise on increased leisure spending once lockdown restrictions are eased and a surge in staycations. The pub sector remains among the hardest hit by coronavirus with rolling lockdowns taking operators to the brink of collapse.
Financials & Real Estate
Beazley saw a loss before tax of $50.4m in 2020, down from a profit of $4,267.7m in the previous year, as the coronavirus pandemic took a toll on the firm. The insurer saw return on equity of 3% for its 2020 financial year, down from 15% in 2019. Insurers have been hit hard by the pandemic. Beazley chair David Roberts described the loss as “disappointing”, adding that the pandemic had impacted a number of lines of business at the insurer.
Johnson & Johnson
Johnson & Johnson has filed an application seeking emergency use authorisation for its COVID-19 vaccine with the Food and Drug Administration, bringing the company one step closer to getting the first single-shot vaccine distributed in the US. The world’s largest healthcare group said it expected to supply 100m doses to the US government in the first half of the year, boosting supplies and speeding up the vaccination rollout.
IN THE NEWS
Banks told to prepare for negative rates – The Daily Telegraph
UK platforms see uplift after shorted stocks frenzy – Financial Times
Ministers race to book 28,000 quarantine hotel rooms by 5pm on Friday – The Daily Telegraph
Carmakers consider supply chain overhaul to avert more chip crises – Financial Times