13 May 2021
Headlines • Study finds 25% of EU residents ‘unlikely’ to take vaccine • Crime rates in England and Wales fell 8% in 2020 • Ohio introduces $1m lottery for those that have had a vaccine • Russia records first case of the Indian variant • Brazil suspends AZ vaccine for pregnant women
22 April 2021
Headlines • EC issues legal proceedings against AZ over delays • India records highest ever one-day tally of cases of any country • Tokyo cancels annual motor show • Italy is to start relaxing restrictions on Monday • Covax only delivered 20% of vaccine targets
21 April 2021
Headlines • Anti-lockdown protests in Berlin • J&J vaccine “benefits outweigh the risks” (EMA) • The Netherlands, France and Spain to begin J&J vaccine rollout • Finland to begin lifting restrictions and publishes exit plan • French domestic travel restrictions to end on 3 Ma
20 April 2021
Headlines • UK payroll dropped by 56,000 in March • Under 35s account for 80% of UK job losses • Pfizer vaccine has some efficacy against Indian variant • UK border staff see100 fake test documents a day (ISU) • US CDC warns against travel to 80% of world
9 April 2021
Headlines • Germany in discussions to buy Russia’s Sputnik vaccine • Virus prevalence in England rose last week (ONS) • Japan imposes new measures in Tokyo, Okinawa and Kyoto • EMA reviews link between J&J vaccine and blood clots • UK house prices rose 1.1% MoM in March
31 March 2021
Headlines • Pfizer says its vaccine is safe for children aged 12-15 • Arizona and Arkansas lift mask mandates • Germany bans AZ vaccine for under 60s • Mass testing begins in Bolton after discovery of SA variant • Malta to allow UK travellers this summer
30 March 2021
Headlines • c.50% of the UK population have Covid antibodies • Italy introduces five-day quarantine for EU travellers • Canada suspends AZ vaccine for those under 55 • Some German cities (including Berlin) suspend AZ vaccine for under 60s • Spain mandates mask wearing outdoors
29 March 2021
Headlines • Single vaccine dose reduces 62% of infections in care homes • Portugal extends flight ban to the UK • Vaccination rates up to seven times lower in minority communities • US extends eviction ban to 30 June • French ICUs close to record levels
26 March 2021
Headlines • The UK's R number is 0.7-0.9, last week it was 0.6-0.9 • EMA approves two new vaccine factories • UK retail sales rose 2.1% from January to February • 40,000 people in the UK caught the virus in hospital • Moderna delays vaccine shipment to Canada
26 March 2021
On Thursday 25th March we hosted the 15th annual Non-Executive Director Awards as our first virtual awards ceremony. Peel Hunt are proud to organise the NED Awards celebrating Non-Executive Directors who drive change and whose contribution as guardians of corporate governance deserved recognition.
22 March 2021
Headlines • US trial finds AZ vaccine 100% effective against hospitalisation • YouGov poll shows over half in Germany, France and Spain believe AZ vaccine is unsafe • A state of emergency has been declared in Miami Beach • TFL accepts government bailout extension until 18 May
18 March 2021
Headlines • OU study suggests vaccines are more effective against variants than previously thought • 47% protection in the over 65s after infection • Tokyo to lift state of emergency • UN says global economy has lost US$10trn this year • Kyiv to go into lockdown from 20 March
17 March 2021
Headlines • China resumes visas for those vaccinated with Sinovac • Poland is to enter a new national lockdown • Germany extends border controls with Austria & Czech Republic • Philippines suspends arrival of foreign travellers • Israeli study; vaccinated pregnant women pass on protection to babies
16 March 2021
Headlines • EMA says ‘no indication’ AZ vaccine causes thrombosis • 33% in the UK currently have antibodies • Moderna begins late stage trails of its vaccine in children • Sweden, Latvia, Slovenia and Cyprus suspend AZ vaccine • Stay at Home measure in Scotland will be lifted on 2 April
15 March 2021
Looking back at our 2020 sector book, where we included seven key technology trends, including ESG becoming a bigger theme, as our predictions for the year, we are happy to see a high hit rate. We have picked six new themes for this year, some of which are evolved from past themes. We again hope for a high hit rate, as that should open up opportunities for new companies championing them to come to market.
15 March 2021
Headlines • China’s January-February industrial production up 35.1% YoY • Portugal extends ban on flights to UK • DVT after vaccine lower than background rate, AstraZeneca • Germany, Netherlands and Indonesia suspend AZ vaccine • Singapore and Australia are discussing an air travel bubble
12 March 2021
Headlines • UK R number now 0.6-0.8, down from 0.7-0.9 last week • UK economy shrinks 2.9% in January • 3.2m UK households have acquired a pet since March 2020 • Italy to increase national restrictions from Monday • Scotland relaxes rules on socialising outdoors
11 March 2021
Headlines • Pfizer vaccine prevents 94% of asymptomatic infections • Seven European countries suspend the AstraZeneca vaccine • NHS waiting list rises to 4.6m • One-week wait to land cargo at largest Californian Ports • The EMA has recommended approving J&J’s vaccine
10 March 2021
As the Government and FCA now consult on Lord Hill’s recommendations in his long-awaited review into the UK listing regime, new research from our 2021 survey sets out a list of demands from investors and corporates for how regulators and policymakers can unlock growth in the equity markets, while revealing the significant role the investment community played during the pandemic in providing emergency capital to cash strapped corporates.
10 March 2021
Headlines • UK variant increases mortality by 30-100% • Tokyo to ban overseas fans from the Olympics • Women more likely to be furloughed, ONS • UK case rate below 50 per 100,000 • Gloucestershire, London and Staffordshire begin mass testing for Brazilian and SA variants
4 March 2021
Headlines • Study finds fatality rates 10 times higher in obese nations • Germany to maintain border restrictions • Athens extends its lockdown to 16 March • Germany and Sweden to allow over 65s the AstraZeneca vaccine • New vaccines to have fast-track approval process similar to flu vaccines
3 March 2021
Headlines • Deliberate explosion at Dutch test centre • US able to offer vaccines to all adults by May • Japan extends state of emergency in Tokyo • Isle of Man begins three-week lockdown • Four US states including Texas remove mask-wearing requirements
2 March 2021
Headlines • 30.77% of UK population have received a vaccine • Austria, Denmark and Israel form alliance to produce vaccines • Only 24% uptake of AstraZeneca vaccine in France • One-third of school year lost in the UK • Turkey reopens restaurants and schools
1 March 2021
Headlines • UK school staff at same risk of infection as other workplaces • UK unemployment claimants up 112% YoY • Finnish Government declares a state of emergency • US CDC approves Johnson & Johnson vaccine • Willingness to get vaccine increases in Europe, US & Japan
24 February 2021
Headlines • AstraZeneca to deliver <50% of contracted vaccines to the EU in Q2 • Portugal to send 5% of its vaccines to former African colonies • Switzerland to lift lockdown from 1 March • J&J vaccine 66% effective at preventing moderate and severe illness • Hong Kong residents to receive HK$5,000
19 February 2021
Innovations that caught our eye this week include a promising approach to making universal vaccines using a method worthy of Dr Frankenstein. Meanwhile, “organs-on-a-chip” are helping to unravel the mysteries of Parkinson’s and other complex diseases, which could unlock new avenues to potential cures.
19 February 2021
Headlines • UK R number 0.6-0.9 from 0.7-0.9 last week • Pfizer vaccine 85% effective after one dose • Israel extends its border closure to 6 March • China donates 200,000 vaccine doses to Algeria • Hong Kong to begin vaccinations on 26 February
18 February 2021
Headlines • Two million in the UK have not worked for six months • India implements tests for travellers from the UK, SA & Brazil • $24tn added to global debt, IIF • 130 countries have not received any vaccines, 10 countries have administered 75% of all doses • The South African variant may reduce protection of the Pfizer vaccine by 66%
16 February 2021
Headlines • 750,000 UK households behind in rent • Norway to lift national restrictions • Some schools in Scotland to reopen on Monday • Singapore announces $8bn spending programme • Poll shows only 64% of Australians to ‘definitely’ take vaccine
12 February 2021
Headlines • UK’s economy contracts 9.9% in 2020 • Norway’s economy contracts 2.5% in 2020 • Ukraine receives €50m from the EU for vaccines & refrigeration • Australian state of Victoria goes into lockdown • Austria bans travel out of its Tyrol region
8 February 2021
Headlines • Pfizer vaccine effective against South African variant • Rollout of AstraZeneca vaccine stopped in South Africa • Portugal advises against AstraZeneca for over-65s • 61% of Japanese residents oppose Olympics • France bans homemade masks in schools
26 January 2021
Headlines • IMF lifts 2021 global growth forecasts from 5.2% to 5.5% • EU to require firms to register their vaccine exports • UK unemployment rises from 4.9% to 5% • Sweden halts payments to Pfizer in disagreement over doses • California lifts restrictions
25 January 2021
Headlines • 8.8% of global working hours lost in 2020, according to ILO • Moderna delays vaccine delivery to Poland • France bans homemade facemasks • Merck ends Covid-19 vaccine development • Israel bans flights for one week
21 January 2021
Headlines • 8.4m UK residents borrowing more in the pandemic, ONS link • French ski lifts will remain closed in February • Glastonbury Festival cancelled again • One in 10 major hospital trusts has no spare ICU capacity • Dubai suspends live entertainment and non-essential surgery
15 January 2021
Headlines • UK’s R number is between 1.2 and 1.3 • Supreme court rules in favour of small businesses over business interruption insurance • UK economy shrank by 2.6% in November • Biden proposes $1.9tn stimulus package • Portugal goes into full lockdown
13 January 2021
Headlines • Scotland further tightens restrictions • China’s Sinovac vaccine 50.4% effective in Brazilian trials • California lifts stay-at-home order for Sacramento region • Japan extends state of emergency • Half of intensive care staff have severe mental health issues after the first wave
12 January 2021
Headlines • Total UK sales fell by 0.3% YoY in 2020 • CDC says nearly 9 million Americans vaccinated • China locks down Langfang city and parts of Beijing • German lockdown to last another 8-10 weeks • Royal Mail to reduce deliveries to high-risk areas
11 January 2021
Headlines • BioNTech now expects to produce 2bn doses in 2021, up from 1.3bn • Federation of Small Businesses warns 25% of businesses could close • Southend Hospital’s oxygen supply network at critical levels • 2.0m in the UK have received one dose of a vaccine • Seven mass vaccination centres open in England
8 January 2021
Headlines • UK authorises the Moderna vaccine • Major incident declared in London • UK R value between 1.0 and 1.4 • Early research shows Pfizer’s vaccine is effective against new variants • China’s Sinovac Biotech vaccine 78% effective in Brazilian trials
7 January 2021
Headlines • Ryanair cuts its January UK flight schedule effectively to zero • Tokyo declares new state of emergency with restaurants and bars closing • GP surgeries begin Oxford/AstraZeneca vaccine distribution • Kent begins mass testing programme • Tunisian tourism fell 65% in 2020
16 December 2020
Headlines • UK maintains Christmas relaxation rules • CMA opens investigation into air passenger refunds • UK inflation falls to 0.3% YoY in November, from 0.7% in October • ONS estimates there are 150k Long Covid cases in the UK • BAT receives approval to begin human vaccine trials
7 December 2020
Headlines • UK to begin vaccinations on Tuesday • Denmark to impose a partial lockdown in the main cities • 85% of California’s residents go into lockdown • Greece’s lockdown extended until 7 January • Kingfisher to pay back £130m in rates relief
30 November 2020
Headlines • Welsh pubs & restaurants banned from serving alcohol from Friday • UK job postings fell 42% YoY to November • Net consumer lending fell by £590m in October, BoE • China’s Manufacturing PMI rises to 52.1 in November • Moderna files for US & EU emergency regulatory approval
24 November 2020
Headlines • Hong Kong shuts bars and restaurants for third time • Russia says its Sputnik vaccine is 95% effective • Annual global airline revenues fall 60%, IATA • Passengers arriving in England can cut quarantine by paying for tests from 15 Dec
23 November 2020
Headlines • Oxford University and AstraZeneca vaccine 70.4% effective • Catalonia re-opens bars and restaurants • First Americans could be vaccinated on 11 December • Travel bubble between Hong Kong & Singapore postponed • Italy could see 2m more families in poverty
19 November 2020
Headlines • Brexit talks suspended after positive test • Tokyo raises its Covid-19 alert to the highest level • 14% of UK businesses have low or no confidence in surviving next three months • Lockdowns avoidable with 95% mask use, WHO Europe • NHS waiting list in Wales to take “years” to clear
10 November 2020
Headlines • The UK’s unemployment rate rose to 4.8% in Q3 • Wales cancels 2021 GCSE, AS and A-level exams • China is to disinfect all imported frozen food • Trials of the Chinese vaccine suspended in Brazil • France’s unemployment rate rose from 7.1% to 9.0% in Q2
6 November 2020
Stocks to buy into ahead of vaccine announcements Leaders in the race to develop Covid-19 vaccines are due to report trial results as early as late November (best case) or December (base case). If just one of these meets the US Food and Drug Administration’s criteria for approval, we expect a strong sentiment rally to follow. In this note we discuss the progress on the main vaccine candidates and identify the companies we believe stand to perform the best across our coverage.
5 November 2020
The imposition of another lockdown will clearly have a material impact on the domestic economy, particularly in the build-up to Christmas. However, the impact should not be nearly as deep as the first lockdown, given that most businesses will continue operating. This note looks at the similarities to and differences from the first lockdown and our initial thoughts on its impact on our sectors and companies. We will update further as more details emerge.
5 November 2020
Headlines • BOE injects £150bn into the UK economy • UK furlough scheme extended to March • OSR expresses concern over the UK Government’s data use • Indonesia’s economy contracts 3.5% YoY in Q3 • Greece goes into national lockdown • Rolls-Royce to cut 1,400 jobs...
29 October 2020
Who’s still paying? Updated 28 October The rate of cancelled and cut dividends has slowed materially in the past few months such that the total ytd is c.£36bn, up from £33.5bn in July. The focus has now shifted to those paying or likely to pay in the coming months. Our analysis shows a total of c.£20.7bn of extremely likely payments, with a further £12.0bn of likely payments by June 2021.
21 October 2020
Headlines • Cathay Pacific announces 5,900 job cuts • South Yorkshire to enter Tier 3 restrictions from Saturday • Gyms and leisure facilities can reopen in Liverpool • Czech Republic set to go back into lockdown • AstraZeneca’s US vaccine trial expected to resume this week...
15 October 2020
Headlines • London will move to ‘Tier 2’ on Friday • Police search home of French health minister • Hong Kong and Singapore agree travel bubble • Oxford University develops five-minute test • Frankfurt book fair, the world’s largest, to go ahead this week
14 October 2020
• Northern Ireland increases restrictions • ICUs at Liverpool hospitals are at 90% capacity • World Bank approves $12bn for developing countries • Bars and restaurants to close in Spain’s Catalonia region • Israel has extended its second lockdown
14 October 2020
Caesars’ offer for William Hill pushed up gambling share prices, and we believe that there is more to go for in that subsector as more US states regulate. In this note we identify possible other bolters across our other subsectors and those that look, perhaps, a little winded.
12 October 2020
Headlines • More Covid-19 patients in English hospitals now than when lockdown began • NHS Nightingale hospitals put on standby • Most A-level and GCSE exams in England will be delayed • Chinese city Qingdao is to test its 9m population in five days...
8 October 2020
Headlines • Covid-19 killed three times more people than flu and pneumonia in the UK, according to the ONS • Italy has made face masks compulsory in outdoor spaces • France order new restrictions in Lyon & Lille • Madrid court rejects partial lockdown as ‘harmful to basic rights’
7 October 2020
Headlines • Donald Trump ends negotiations over US Covid-19 relief bill. • Greene King to cut 800 jobs. • All bars and cafes in Brussels to close for a month. • Average UK house price has risen 7.3% year on year. • Bars, gyms and swimming pools in Paris closed for two weeks.
7 October 2020
In this note we discuss a number of the key themes in the video games sector, such as consoles, cloud gaming and the potential for lower platform fees. We upgrade FY2 EPS for Frontier Developments and Team17 by 4% and 13%. We downgrade Sumo’s by 5%, though this is due to D&A/share count and currently excludes its recent not-yet-closed acquisition. Frontier, Keywords Studios, and Team17 have had unprecedented equity performances during the pandemic and we will review our target prices and recommendations in due course. The UK names are on 22x NTM EV/EBITDA just below two-year highs.
6 October 2020
Headlines • Ireland to bring in ‘Level 3’ restrictions • WHO warns that “pandemic fatigue” has set in in Europe • China to have its locally produced vaccines assessed by the WHO • Japan and South Korea plan to open business travel between the two countries
5 October 2020
Headlines • New York City is seeking permission to close schools and reinstate restrictions on non-essential businesses • Bars in Paris will have to shut for two weeks from Tuesday • WHO says one in ten people may have had the virus globally • New car sales fall 4.4% YoY in the UK • Restaurants, bars and cafés in Mumbai reopen after six months...
1 October 2020
Headlines• New ban on households meeting in North of England.• Study shows R0 may be falling in the UK.• Madrid goes back into lockdown.• Rolls Royce announces £2bn rights issue.• 11 French cities see new restrictions.• South Africa to re-open borders.
1 October 2020
Majors’ pivot from oil is a unique opportunity for E&Ps As a follow-on to our July M&A note, we discuss the Majors’ plans to reduce their focus and spend on oil, in order to build new, low-carbon businesses. The scale of this structural change is huge: BP aims to reduce production by 40%, Shell may cut upstream costs by 30-40%, and Eni plans to lower its net GHG emissions by 80%. While each company uses a different metric, the outcome is clear: a large-scale divestment of the Majors’ oil fields in non-core geographies. We think this presents a huge opportunity for cash-rich, acquisitive E&Ps.
29 September 2020
• India sees lowest daily deaths since 3 August • The Netherlands introduces new restrictions • UK Government’s track and trace app downloaded 12.5m times • UK mortgage approvals in August highest since 2007 • Households in the Northeast of England banned from mixing socially
21 September 2020
Gold feels underpinned for the medium term Recent comments from the FED about average inflation targeting mean we believe the current gold price strength is likely to extend well into 2023E, ushering in a period of truly spectacular cash flow generation by the gold sector. This will give management teams the resources to delever, fund development projects and return cash to investors, enabling investors to select stocks based on their preferred characteristics.
15 September 2020
Headlines • UK unemployment rises to 4.1% • Retail sales in China grow 0.5% YoY • Marseille & Bordeaux announce new restrictions • 20% of South Africans may have been infected, new study shows • Domino’s Pizza has announced 5,000 new jobs • High Court rules insurers should pay some business interruption claims
14 September 2020
Headlines • London City Airport to cut 239 jobs – a third of its workforce • Israel goes into second national lockdown • South Africa expects GDP to fall more than 7% in 2020 • French government to spend additional €20m in subsidies for bike repairs • Saudi Arabia to partially lift international flight suspension
9 September 2020
Headlines • UK bans social gatherings of more than six people • Oxford vaccine trial put on hold • June factory emissions back to within 5% of pre-lockdown levels • Daily cases in the Netherlands and Portugal highest since April, but daily deaths less than 10% of the same month’s levels
8 September 2020
Headlines • UK weekly deaths fall from 138 to 101. • School disruption could impact global economic output by 1.5% estimates the OECD. • Japan’s economy shrank 7.9% in Q2. • 5-10% of UK furlough payments wrongly paid. • Further restrictions placed on Bolton, UK.
4 September 2020
Headlines • UK case numbers unchanged. • Russia’s “Sputnik – V” vaccine produces an antibody response in early trails. • US non-farm payrolls increased by 1.371m jobs in August. • Greece and Portugal stay on England’s quarantine-free travel list. • The government’s Eat Out to Help Out scheme subsidised 100m meals and cost £500m.
2 September 2020
The recovery in spending on home improvements has been far faster than expected due to a shift in spending following the protracted period at home. There will have been some pent-up demand post the lockdown period and the market’s assumption is that the improvement will be temporary as the furlough period ends and consumers’ caution increases. This increasingly feels too negative and most of our forecasts have material upside potential. The numbers from Dunelm# yesterday demonstrate this theme. This note looks at our coverage across the space and identifies the companies with the greatest upside.
27 August 2020
• Face masks to be mandatory across Paris as R number rises to 1.4.
• South Korea central bank cuts its growth outlook to -1%.
• Obesity increases risk of Covid-19 death by 48%, study finds.
• 1.3m air passengers arrived in the UK in July, down 89% on July 2019.
26 August 2020
• WHO says the rate of transmission is easing.
• Germany extends measures, bringing an extra €10bn for its furlough scheme.
• Pupils in England’s secondary schools will have to wear masks in corridors.
• Bars, cafes and restaurants in Aberdeen allowed to re-open.
25 August 2020
• German economy contracts by 9.7%.
• Schools in Seoul close as cases rise.
• Finnair announces plans to cut 1,000 jobs.
• A patient in the Netherlands and another in Belgium became re-infected.
• 48-hour lockdown is in force across the Gaza Strip.
• School pupils in Scotland to wear face coverings.
24 August 2020
• France to implement reciprocal 14-day quarantine for UK travellers.
• US FDA gives emergency authorisation for the use of plasma treatment.
• Tesco to create 16,000 new jobs to cater for online demand.
• France and Italy record their highest number of daily cases since May.
• South Korea tightens social distancing requirements.
20 August 2020
Headlines • 75% of people do some grocery shopping online, according to Waitrose • Masks now compulsory in Nice • Seoul bans gatherings of more than 10 people • Qantas reports an annual loss of almost £1bn • Germany reports highest daily infection rate since April
19 August 2020
Headlines - WTO’s Goods Trade Barometer falls to 84.5. - UK inflation rises to 1% in June. - Germany extends furlough to 24 months. - World Bank is calling for greater debt relief for poorer countries. - A mutation found in Europe, North America and Asia may be more infectious but less deadly.
18 August 2020
• Marks & Spencer is cutting 7,000 jobs.
• Opening match in French football Ligue 1 postponed.
• Hong Kong: bans flights from India.
• France: face masks mandatory in all shared workplaces.
• Over 90% of cases in Victoria, Australia, linked to one source
17 August 2020
Ryanair said it will cut capacity by 20% in September and October after bookings “notably weakened” in the past 10 days. Clearly this is due to the rolling travel restrictions the UK is now applying to countries that are seeing a rise in infections. Whilst there is a need to reduce imported infections, the instant blanket quarantine on travellers stymies a return to normal for the travel industry. The testing on return approach deployed by Germany appears to be more proactive and allows tourism to function more effectively.
13 August 2020
Weekly health ministry data from France shows that workplaces are the main source of current outbreaks in the country. Since 9 May, private and public companies have accounted for 22% of 609 clusters, health institutions accounted for 16% of all clusters and extended families accounted for 14%. Public transport, including trains and planes, accounted for just 1% of clusters, and schools and universities only 4%. Many will drop their guard in places and with people that are familiar, when the risk, if anything, is greater in these close quarter interactions.
12 August 2020
Russia approved a controversial Covid-19 vaccine for use, after less than two months of human testing. A number of vaccines across the globe have been shown to provoke an immune response, so why the delay? One major reason is antibody-dependent enhancement (ADE), a phenomenon well-known to virologists, where an individual is exposed to a closely related virus and antibodies produced, but – far from being protected against other versions – they become sicker when infected a second time, as the antibodies produced allow the infection to ‘hitchhike’ into the body. Phase 3 trials are needed to show this; Russia has chosen to skip this step.
11 August 2020
We expect the deepest recession in a century to be confirmed today, but figures from the British Retail Consortium and KPMG indicate that a recovery is under way via the consumer, with total retail sales increasing 3.2% YoY in July. Good weather and the reopening of non-essential shops across most of the UK has fuelled an increase in consumer spending close to pre-pandemic levels. Food, furniture and homeware sales all rose, as people cancelled their usual summer holiday plans and increasingly invested in their homes.
10 August 2020
“Greece has formally entered a second wave of the epidemic”, according to one of the country’s top infectious disease experts, Dr Magiorkinis. While he pointed out reopening and tourism partly played a role for the sudden increase, he mostly attributed the resurgence to lax observance of hygiene protocols by Greeks, particularly younger generations, who have flooded bars and beaches in recent weeks. This is a familiar story across Europe and the UK. Simple social distancing and personal hygiene routines will need to be followed closer than ever as restrictions lift to stave off a second wave.
10 August 2020
It is a world of haves and have-nots. Companies that have put in place the liquidity to trade through Covid-19 will benefit from the problems of those that have not. There is a cluster of winning share prices, mainly gambling companies, and a long tail of laggards. In this note we try to identify winners with further to go and grains of wheat currently languishing with the chaff.
7 August 2020
The World Health Organization has warned against “vaccine nationalism”, cautioning countries not to keep treatments to themselves. Hundreds of potential vaccines are being developed in several countries and the first vaccines are likely to go to the highest bidder. However, it might be more effective if they went to those countries less able to battle the virus. As Dr Tedros says: “For the world to recover faster, it has to recover together, because it’s a globalised world: the economies are intertwined. Part of the world or a few countries cannot be a safe haven and recover.”
6 August 2020
From Saturday, people returning to Germany from countries with a high risk of coronavirus will have to undergo tests on arrival. The free tests had been offered to such returnees on a voluntary basis from last week, but will now be mandatory. In contrast, the equivalent travellers arriving in the UK are required to self-isolate for 14 days; this relies on honesty and is hard to enforce, it is also less efficient. A negative test result would allow travellers to shorten the periods they are required to isolate. Testing capacity and speed has improved in the UK, but the value of further improvements should not be underestimated.
5 August 2020
Sweden’s economy shrank by 8.6% in Q2 compared with the previous quarter – the largest quarterly fall for at least 40 years. However, the preliminary estimate from the Swedish statistics office indicated that the country fared better than other EU nations that took stricter measures, which on average saw a contraction of 11.9%. Sweden’s deaths per million inhabitants, while significantly higher than its neighbours, remained below that of the UK, Spain and Italy. Whilst nothing can be done about the past, this demonstrates that a complete lockdown can and should be avoided with any future wave.
4 August 2020
According to a study published in The Lancet today, Britain faces a second wave of Covid-19 this winter twice as widespread as the initial outbreak if schools re-open without a more effective test-and-trace system in place. However, there is still time to prepare. Importantly, the study found that it is possible to avoid a second wave if enough people with and without symptoms are diagnosed, their contacts traced, and they are effectively isolated. Speed and ease of testing has come a long way already, but much more needs to be done if re-opening is to continue.
17 July 2020
Today the UK government signalled its intention to move the country back to some form of working normality. Asking workers to return to offices may appear unnecessary, but the sub economy that services the office user – lunch outlets, coffee shops, etc – will have a different opinion. However, many will see the resurgences around the world as restrictions lift and wonder if it is worth the personal risk; further, some may feel it unnecessary to return, regardless of the status of the outbreak.
16 July 2020
China’s economy returned to growth in the second quarter, with GDP rebounding more strongly than expected and expanding 3.2% in April-June, the National Bureau of Statistics said today. It remains to be seen how much of this was a catch-up of lost production in Q1. Retail sales, a key indication of consumer sentiment, fell short of expectations, shrinking 1.8% YoY last month, showing consumer sentiment is slower to recover. Measures taken by the UK government to encourage the consumer back will be vital in a service-dominated economy.
15 July 2020
The European commission said today that EU states should launch earlier and broader vaccination campaigns against flu this year to reduce the risk of simultaneous influenza and Covid-19 outbreaks in the autumn. While there is currently no evidence to show Covid-19 worsens in colder conditions, the EU executive wants to prevent the risk of hospitals again being overwhelmed by a surge of patients, as happened at the peak of the Covid-19 pandemic in Europe in March and April. Early preparation for known problems should help countries avoid large-scale lockdowns.
14 July 2020
Today nearly 400m people saw lockdown measures increased. Widespread lockdowns have demonstrated their effectiveness at bringing the virus under control, but they have also had an enormous impact on the global economy. With the UK economy already showing signs that the recovery may take longer than hoped, it is clear that other options must be considered in order to provide the greatest good for the greatest number.
13 July 2020
It looks increasingly likely that the UK will soon mandate the use of masks in public spaces with a formal review in England already under way. In the early stages of the outbreak, face masks were considered unnecessary; however, evidence of their efficacy is growing. Whilst wearing a mask may take the consumer some getting used to, this relatively cheap measure could help prevent further lockdowns, which are already beginning to mount up around the world.
8 July 2020
The UK chancellor Rishi Sunak today announced the government’s plan for weaning businesses off the – ever more costly – furlough scheme. Business owners will now need to consider whether to pay 5% of furloughed wages in August, 15% in September and 24% in October, followed by a minimum of £520 per month from November, to get a £1,000 one-off bonus in January. Clearly the level of take up will depend on the recovery in sales. Cuts to VAT, stamp duty and 50% off meals in August should stimulate demand by encouraging the public to go out and spend.
7 July 2020
Only 22% of people testing positive for coronavirus reported having symptoms on the day of their test, according to the Office for National Statistics. This highlights the significance of asymptomatic transmission. However, it also demonstrates how underestimated the infection rates are in the UK given that those who do not produce antibodies will also not be counted. We believe this should be viewed as encouraging evidence that the overall severity of the virus is much lower than the crude mortality rates we see.
6 July 2020
Britain’s building sector has started to grow again after activity slumped during lockdown. Data firm Markit reported that activity in June rose at the fastest rate in the sector in almost two years. Construction PMI rebounded to 55.3 in June, up from 28.9 in May. Whilst this is a positive signal, it’s a small rise off a low base and it’s early days in the recovery. Firms also reported problems accessing materials and many are still cutting jobs, suggesting uncertainty about the outlook. However, it is clear that the direction of travel is improving steadily.
3 July 2020
Restaurants, pubs and cafes in England will be allowed to open from 6:00am on Saturday. Holiday accommodation, hairdressers and a range of other public amenities will also be allowed to open. This will one of the first major tests of how the UK public responds to the ‘new normal’. There will inevitably be pent-up demand and to avoid the crowds seen at beaches last month the government has urged people to be ‘responsible’. Of course, there are risks. There is the risk of seeing the virus spread, but there are also risks in keeping the economy at a standstill. It will be hoped that the message this time is clearer.
2 July 2020
The US economy created jobs at a record rate in June as more businesses re-opened, giving fresh hopes of a recovery. The job gains added to other positive US data in consumer spending, which showed a sharp rebound in activity. However, cases have since increased in large parts of the country, including the populous California, Florida and Texas. Whilst another nationwide lockdown was ruled out, some states are reversing their re-opening plans. However, with funds in the Paycheck Protection Program, which gives business loans that can be partially written-off if used to meet wages running out, a new pause could be far more damaging.
1 July 2020
Major events looking to get back up and running after the crisis will likely have to do so without cancellation insurance for communicable diseases. Wimbledon says it will not be able to get similar cover next year and World Athletics said insurance policies are no longer available for coronavirus. Lloyd’s of London has estimated that global insurers will pay out $100bn this year due to the virus, including for cancelled sports, music and industry events, so the reluctance is understandable. However, events companies stressed after 2020 might not be willing to take on the risk of running events in 2021 with the chance of a second wave.
30 June 2020
Officials in Tokyo today announced it is to move away from numerical targets in containing Covid-19, and rely more on advice from a committee of experts. From the early stages of the disease Japan has been less concerned with statistics and more focused on its response. This approach has sometimes been criticised; however, so far the country has been highly successful in keeping the outbreak under control. It still has less than a 1,000 deaths. While data is vital, context and understanding the numbers is far more important.
29 June 2020
China’s military has approved a coronavirus vaccine for use on its soldiers. It has been developed by China’s Academy of Military Medical Sciences and a biotech firm, CanSino Biologics. It is the first large-scale human trial of any of the 131 candidate vaccines identified by the WHO. This is an acceleration of the normal process. Therefore the risks increase, however so does the speed in reaching a conclusion and any more human trials will likely be similarly accelerated. Vaccines remain central to the global fight; Dr Anthony Fauci has warned that the US is ‘unlikely’ to develop herd immunity until a vaccine is available.
26 June 2020
Scientists from the University of Innsbruck tested 80% of the population of Ischgl, the Tyrolean skiing resort that has been described as a possible “ground zero” for the pandemic in Europe. Some 1,259 adults and 214 children were tested and 42.5% of residents were found to have developed Covid-19 antibodies. Most interestingly, of those infected, only 15% had experienced any sort of symptoms, which means as many as 85% were asymptomatic. If these results are reflective of the wider population, the strategies of many governments may need to be revised.
25 June 2020
Ministers are finalising plans for a series of ‘travel corridors’ that will mean people arriving in the UK will not need to self-isolate. This should help support the tourism industry, which is vital to many in the UK and Europe. The value of supporting our and other economies should not be underestimated. However, many were ridiculed for legally going to the beach in the UK last weekend and it now seems that every new release requires an individual to make their own moral judgement, and everybody is watching.
24 June 2020
There continues to be much conversation on the second wave of coronavirus. A resurgence of some kind should be considered inevitable but what is important to recognise is that the UK is in a completely different position to where it was in March when the first wave hit. Awareness is much higher, testing has improved and ongoing measures have been brought in by businesses and customer-facing services to limit the spread of outbreaks. As long as the response remains fast and agile, the second wave should not see a return to previous lockdowns.
23 June 2020
Today came the long-expected announcement that restaurants and pubs will be allowed to reopen in England from 4 July. Coupled with a reduction in the social-distancing requirements, this is one of the biggest changes made since lockdown began, and will be seen a positive change for many businesses. It will be interesting to see what measures of customer protection are followed and enforced, as for many relaxing both of these measures in close succession, having spent the last few months trying to avoid such scenarios, may be seen as too much.
22 June 2020
UK manufacturers remain under pressure despite the recent lifting of restrictions across the country. A survey by the CBI found that 71% of respondents reported that orders were below expectations. Furthermore, manufacturers reported that stock remains higher than needed and expectations for output prices remain deflationary. Even with an instant bounce-back of economic activity, shutting down the nation will already have had unavoidable consequences and it will take time for these structural effects to unwind.
19 June 2020
The alert level in the UK has been reduced from 4 to 3, which should enable an acceleration in the easing of restrictions. There will inevitably be concerns at the prospect of a second wave, but many new measures (such as face masks) and strict business operating procedures are also coming into force. According to new research from the University of Liverpool, these could be just as effective at flattening the curve but will likely need to be in place until a vaccine is found. The importance of enhancing economic growth was emphasised by the news that government borrowing reached £55bn in May.
18 June 2020
The number of Jobcentre claimants in the UK increased from 1.2 million in March to 2.8 million in May. This trend is likely to continue as businesses recalibrate their cost bases. When the recovery comes, some of these jobs will not return. A recent survey of global executives by EY found that 41% of respondents had invested in accelerating automation since the pandemic started. However, the uncomfortable truth is that this virus has made inevitable changes but it is worth remembering that one company’s capex is another’s revenue, and overall employment will again increase.
16 June 2020
Global cases are continuing to rise, likely as a function of lockdown restrictions being eased and increased testing capacity. However, it should be noted that deaths are continuing to fall both globally and in the UK. There was further goods news today as a global study has found the first drug proven to increase survivability in severe cases. As more time passes healthcare systems will inevitably become better at dealing with the virus and thus reducing deaths, hopefully making any second wave far less severe.
15 June 2020
Beijing and Chennai have today responded to new outbreaks of the virus by reimposing lockdown restrictions, and in Berlin an apartment block has been quarantined. It looks more and more likely that small outbreaks will be unavoidable. However, authorities now know the severity of the virus and what they are looking for, so their attitudes will no longer be as complacent. This should lead to quicker, bolder and more targeted actions, giving hope that a second wave will be more gentle ripples rather than a tsunami.
11 June 2020
Calls have been growing for the government to change its two metre distancing rule, and to some this may seem arbitrary. However, it is worth remembering that to implement two metres, restaurants, shops and offices require 4x more space than for one metre, thus significantly increasing costs and reducing efficiency. Although a recent study by the Lancet showed that reducing the distance from two metres to one could double the risk of infection, it also showed that one metre is effective and reduces the overall risk by 80%. Therefore, while it is clear a reduction in distance will increase infection rates, the benefits could outweigh the risk.
10 June 2020
The OECD has published a report on the global economic outlook that shows the global economy could contract by 6% over the year, and the downside could be greater if a second Covid-19 wave emerges. The race to reopen will need to be carefully balance against this risk. Growth will depend on many factors, including how Covid-19 evolves, its impact on activity, and the implementation of fiscal and monetary policy support. So far the government has said it will ‘do whatever it takes’ but will be mindful of the debt building up.
9 June 2020
Today, the UK government announced it is dropping its plan to reopen primary schools for all pupils in time for the last month before the summer break. The government acknowledged that the practicalities are too difficult to overcome. This is a U-turn, but not one that should be derided. Governments and businesses will need to make decisions as we begin to emerge from this crisis. Some will be wrong. The most important thing is that they do change course. Flexibility is the most valuable asset going forward. For example, reducing social distancing from two metres to one would make a considerable difference to economic activity and productivity.
8 June 2020
Lockdowns have had a dramatic impact on the spread of the virus in Europe, with strict controls on people’s movements preventing an estimated 3.1 million deaths by the beginning of May, according to researchers at Imperial College London. The lockdowns lowered the R0 below 1 in all 11 countries studied. This success, given the variations in lockdown restrictions, provides a positive indication of the potential to manage this virus long term. It is hoped the smaller-scale efforts to slow the virus will be able to maintain control.
5 June 2020
The US unemployment rate dipped to 13.3% and the country added 2.5m jobs back into the market. This news came as a positive surprise to economists and the reversal of a two-month trend has been welcomed by the market as signals across the globe continue to improve. These initial gains are likely due to workers being rehired as businesses reopen, which should continue in the short term. We will only have a clear view on the underlying level of unemployment once the lockdown has ended.
4 June 2020
Today the Global Vaccine Summit got underway. This virtual meeting hosted by the UK aims to bring together political leaders from 50 countries, wealthy individuals and companies and represents a critical moment to advance collective solutions for Covid-19 vaccines. It is hoped that these discussions will be able to co-ordinate pharmaceutical companies and world leaders’ approaches. History has proven that a vaccine, with the globe united behind it, can defeat some of the most infectious diseases. Still, recent months give little reason to be optimistic of finding common ground in the current fractured political landscape.
3 June 2020
Ever since the UK government allowed both essential and non-essential stores to reopen, queues have been forming across car parks and down highstreets as patrons patiently wait to enter. This practice has become part and parcel of everyday life and has given some businesses a vital injection of funds. However, it should be noted that May had the most hours of sunshine on record, making this an easy adaptation. The weather looks to be taking a turn for the worse, at least in the short term, and it will be interesting to see if these queues continue to form in the rain. British summer weather is notoriously fickle, hopefully consumers will be less so.
2 June 2020
Figures today from the Bank of England show £7.4bn of consumer credit was repaid during the first full month of lockdown, including £5bn of credit card debt. This reflects the record fall in retail spending in April. Some of this repayment will have been covered by the government’s furlough scheme as a result transferring debt from the individual to the state. The government will be hoping this transfer is temporary and it’s paid back by a pick-up in GDP as lockdown lifts and spending resumes. However, spending habits may have changed forever, with the public now mindful of how quickly circumstances can change.
1 June 2020
Since January, the race has been on to try and identify just how many asymptomatic cases are out there. A study of the Theodore Roosevelt aircraft carrier in March suggests that as many as 58% of cases were asymptomatic. Similar numbers were seen on the Charles de Gaulle and Diamond Princess. This shows why the government’s initial strategy of asking those with symptoms to stay at home was ineffectual. It also shows why the new track and trace system will be vital in controlling the virus over the next few months as people will be told they must self-isolate after contact regardless of whether they are feeling any ill effects.
29 May 2020
The chancellor Rishi Sunak will set out the details of the extension to the furlough scheme today. It is expected that companies will now be asked to contribute a percentage to the cost of the scheme, which has been extended until October. It is likely the amount companies are required to contribute will increase over time and businesses will need to face the reality of maintaining a full complement of staff. Today, Renault was the latest company to announce job cuts as it reorganises itself for the new reality. More will follow over the next few months.
28 May 2020
South Korea has tightened restrictions in the metropolitan area of Seoul after a spike in infections. Restrictions were lifted across the country on 6 May after the outbreak appeared to be under control. However, officials have recorded the biggest spike in infections in nearly two months, prompting the closure of museums, parks and art galleries in the Seoul area for two weeks from Friday. The numbers are small but it shows the inevitability of localised outbreaks as lockdowns lift. The UK’s new contact tracing system, which launched today, will be essential in keeping outbreaks contained and avoid returning to complete lockdown.
27 May 2020
Non-essential retail has been earmarked for reopening on 15 June by the UK government. A number of restrictions will apply, including no changing rooms, one-way layouts, and restrictions on touching and handling items. One of the main residual advantages of the high street over online is the experience it provides for some users. Many enjoy the tactile browsing that high street shopping usually provides and while it is likely some pent-up demand will see shoppers return at first, if the experience is lacking many may be reticent about returning in the short term.
26 May 2020
Lockdown restrictions across the world are beginning to ease, both in terms of national restrictions and cross border travel. However, Dr Mike Ryan, the WHO’s head of emergencies, has sounded a further warning, telling a briefing on Monday: “We cannot make assumptions that just because the disease is on the way down now that it’s going to keep going down.” While he optimistically pointed out there would be a number of months to prepare for a second peak, most companies, individuals and governments have their eyes fixed on reopening plans, but few will be planning for a second wave of the infection.
22 May 2020
Latin America looks set to become the new epicentre of the virus. The number of cases in Brazil, Peru, Mexico & Colombia are rising fast, with Brazil seeing the number of deaths doubling every two weeks. These countries have neither the economic power nor political will to enforce significant lockdowns and some are looking at some unconventional approaches to slow the spread, including bringing forward a number of public holidays. As long as the virus is circulating, the hotspots will continue to change making it very hard for countries to reopen their borders to global travel and trade.
21 May 2020
A Dutch slaughterhouse was ordered to close (after a quarter of employees were found to have the virus) on the same day as the German Cabinet agreed a draft proposal to ban temporary workers at meat processing plants from January 2021. The virus has shown that the poor conditions in many of these factories and migrant accommodations are making social distancing impossible. The industry is having to revise its working practices; these changes could be permanent. A bottleneck has formed, with ramifications across the supply chain. Many industries will be seeing similar problems and the mechanisms to release these blockages will be a good indicator of the changes to come.
20 May 2020
Greece recently moved onto its third phase of releasing lockdown and is now setting out plans to open its borders for the holiday period. The Greek measures were some of the most proactive and strict in Europe and the country’s success is evident. However, as the rest of Europe still struggles to contain the virus, it seems unlikely this early effort will be rewarded. The country will not want all its hard work undone by allowing infected travellers in, but its already fragile economy is heavily reliant on tourism. It will be hoping the rest of Europe improves its efforts and catches up.
19 May 2020
Hanging by a thread President Trump has reignited his war of words with the WHO calling it a ‘puppet of China’. While the WHO has agreed to an independent review, China has hit back, accusing the US of attempting to distract from its own mishandling of the crisis. The ongoing trade war is unlikely to soften, which does not bode well for the long-term global recovery effort. Conversely, after initial disagreements, France and Germany have agreed to a substantial €500bn recovery fund for the more-affected states. Economic recovery will require collaboration and humility. Neither appear forthcoming by the global superpowers.
18 May 2020
President Xi Jinping defended China’s coronavirus response in the face of criticism from the US and others at the World Health Assembly in Geneva, saying: “We have provided information to the WHO and relevant countries in a most timely fashion”. Dr Tedros Adhanom Ghebreyesus defended the WHO’s response, arguing it gave countries ample warning, guidance and advice. No country or organisation involved will be completely unmarked but some have been more effective than others. There is little point in assigning blame. The best way forward is to address the shortcomings collectively so we are better prepared for future outbreaks.
15 May 2020
London, once the epicentre for the virus in the UK, has seen its infection rates plummet to an R value of 0.4, according to research by Public Health England and Cambridge University. The full drivers are not yet known but the lockdown will have clearly helped, and some studies are suggesting that herd immunity could be a factor. Getting the capital back up and running will be hugely valuable to the UK economy, and the Government today admitted that the lockdown could become regional. Varying the strategy across the UK based on regional needs would make sense and allow parts of the economy to recover. However, this could risk making the message ambiguous and also cause resentment between those released and those not.
14 May 2020
A test to find out whether people have been infected with coronavirus in the past has been approved by health officials in England. The test, developed by Roche, gave the correct result 100% of the time where someone had the disease, and a correct result more than 99.8% of the time in the case of a negative result. This could be a game changer for the Covid-19 response, by removing one variable in the calculations used to build an exit strategy. This comes with one caveat – no one knows if the antibodies are able to prevent reinfection.
13 May 2020
The ONS released the UK GDP numbers today, which unsurprisingly didn’t read well. However, they were better than many EU economies due mostly to the delay in implementing lockdown. More worryingly for some European countries, the biggest impact is possibly yet to come. Tourism makes up a significant portion of GDP for many and the important summer season will be very tough regardless of the status of lockdown. It is no surprise the EC has focused on this area, setting out guidance for EU countries to resume tourism. Finding willing travellers may be harder.
12 May 2020
The UK government has been criticised for what some call a confusing exit strategy. However, a clear message would need to be a one size fits all approach; that does not work on a country-by-country basis, let alone on a person-by-person one. Sweden’s government has resolutely refused to put its country into lockdown, an approach that has been widely criticised by other nations; still, it has seen its R0 value plateau and its daily cases follow a very similar profile to many countries in lockdown, including the UK. Societies operate differently and part of the strategy will be seeing how society reacts to the new measures.
11 May 2020
The UK government has outlined, for the first time, an exit strategy. The government will be painfully aware of the ballooning cost of the furlough scheme and its long-term economic impact. It comes as no surprise that its first major move is to encourage those who can’t work from home to return to their posts. While this presents some challenges logistically, as public transport use is still discouraged, this affects less than 20% UK commuters. The major issue will be what work will there be? The UK service sector makes up 80% of GDP. Some sectors will recover quickly due to pent up demand but many will find a lack of demand given that so many will remain at home.
8 May 2020
It has been widely reported that the UK is set to see some lifting of restrictions as soon as Monday. While the curve of new cases in the UK has flattened, the number is still significant and re-imposing restrictions is the last thing the Government will want to do. Therefore, it is no surprise that Boris Johnson has said the Government will “advance with maximum caution.” Some are questioning the sweeping restrictions and many will be hoping for more targeted measures. However, when complexity is introduced it will be harder for the public to understand and harder to enforce. Finding a balance between low risk beneficial openings and a clear message will not be an easy task.
6 May 2020
Ocado today reported 40% growth in retail sales since the start of March. Growth was expected to accelerate but the rate of progress is a surprise, demonstrating both the scale of demand and Ocado’s ability to step-up capacity. Many people will be new technology adopters or materially increasing their online footprint. Consumer behavioural changes are likely to accelerate more, the longer restrictions remain. Some changes will be obvious, others more subtle. As lockdowns across the globe begin to lift it will be interesting to see what consumers hold onto.
5 May 2020
Australia and New Zealand are discussing the potential for a travel ‘bubble’ between the two countries after both have had success in suppressing the virus. This, if agreed, could have economic benefits for both nations. Social bubbles, allowing people to interact with a small-defined group outside of their household, have also been discussed as a possible element of the UK’s exit strategy. While small social bubbles will help individuals cope with the lockdown it won’t help businesses and the economy. Only once large geographic bubbles can be established (cities, countries etc) could the bubble theory become part of a long-term strategy.
4 May 2020
The list of countries lifting states of lockdown is growing as more countries see the positive impact of measures put in place to reduce the spread of the disease. However, these first moves do not signal an end to the crisis. Most exit strategies published so far last for months, indicating that the next phase will be much longer, even assuming that there is no upsurge in outbreaks. Many businesses will face materially reduced demand and costs are likely to be higher in the second phase. The hard work for many companies is about to begin.
1 May 2020
One of the reasons for the UK delaying its implementation of a lockdown was the risk of public fatigue with the measures and the potential for a resurgence before control is established. There are signs that the public’s resolve is beginning to wane. Google’s mobility report shows a marked increase in activity across the country last weekend; this trend will likely continue. Having now achieved capacity for 100,000 tests per day a published exit strategy will not only help businesses plan for their re-emergence, it could also help focus the minds of the population and help achieve the fastest sustainable release from the lockdown measures.
30 April 2020
France and Belgium are investing in cycle lanes and offering subsidies to repair bikes. This is mainly to limit the use of cars as restrictions end and people avoid the crowds associated with public transport. Over the next few week governments will begin rolling out strategies for lifting the lockdown. With construction likely to be one of the first to return to work, it will be interesting to see if any governments use this moment to accelerate changes to better positon their economies for the future. Full fibre installations, rail network capacity and roadside car charging could be addressed more efficiently in the current environment.
29 April 2020
Gilead has said its possible coronavirus treatment has had positive results in a US study, raising hopes that an effective treatment is on the way. Meanwhile, Boeing has announced plans to cut 10% of its 150,000 strong workforce following BA’s announcement that it may cut 12,000 jobs. The airline industry has realised that even with unprecedented support from governments on both sides of the Atlantic, it will not be able to survive the long lasting damage without radical structural changes. Many will also struggle even after a cure is found; others will see their model proven in the new global landscape and will find themselves on a strong platform when the crisis eases.
28 April 2020
After easing some restrictions, Germany has seen its cases rise back to an r0 value of 1.0, meaning each infected individual will (on average) infect one other. An r0 value of 1 is considered ideal as it allows for the development of herd immunity, still our best defence, while allowing health services to cope. However, above the value of one, exponential growth kicks in. Germany and others in the process of lifting lockdowns will be watching their r0 numbers closely and considering whether there is a need to reapply restrictions to ensure they maintain control.
27 April 2020
Some European countries have begun to lift restrictions on residents as the infection curve of the virus stabilises. France, Belgium and Spain were the latest countries to announce plans to lift some restrictions over the weekend. While many businesses will benefit from this easing, others rely on certain levels of customer density to run profitably and queuing in the rain is not going to be attractive; it might be more cost effective (with more government support) to stay closed. Moreover, these same businesses are likely on the sharper end of longer-term changes to social attitudes that may linger for longer than the virus.
24 April 2020
Our Covid-19 survey revealed that the majority of respondents have a strong view that the lockdown is likely to return, implying a rocky road to economic recovery. This view was held across our three categories (investment managers, corporate managers and other).
24 April 2020
The first great hope for an antiviral treatment for Covid-19 (Remdesivir) has supposedly seen no clinical benefits in its first randomised clinical trial in China (according to the leaked WHO report). However, the company’s main trial (n=400) is due to report this month and the company has talked about a potential benefit, particularly for patients early in this disease. Markets have risen and declined on the back of the data, which demonstrates the desire and hopes for an effective treatment. Remdesivir may not be the silver bullet, but other promising candidates will likely appear in the coming months. Treating Covid-19 is likely to require a variety of approaches from testing to treating before a vaccine is available.
23 April 2020
We expect the online and delivery-orientated businesses to continue their strong performance post-lockdown. Of the closed subsectors, we believe low-cost gyms and bowling have the best economics and unit capacity to cope with operating under social distancing constraints. Also offering strong structural growth and having substantial liquidity in place, these operators are highly undervalued in our view. Too much risk has been priced in.
23 April 2020
The news on lifting restrictions and returning to work is gathering pace. In the UK, housebuilders are reopening sites and Aston Martin is restarting operations next week. Elsewhere, Spain, Vietnam, Dubai and Uruguay are all tentatively easing their lockdowns and social distancing regulations. The desire to return to work is pressing with governments stepping up funding and losing tax revenues. The UK deficit has risen to £49bn ytd and is expected to reach £260bn in 2020. With governments under pressure worldwide there is growing concern that the impact will result in greater deaths from poverty than from the virus itself.
22 April 2020
As the global war on Covid-19 continues, most countries are understandably focused on navigating their own path through this crisis. Funds and minds are focused on solving internal issues. This could have huge consequences. According to the head of the World Food Programme David Beasley, 30 million people, and possibly more, could die in a matter of months if the UN does not secure more funding and food. The direct death toll of the virus could be dwarfed by deaths caused through policy change.
21 April 2020
The WHO has undertaken serological testing to ascertain what proportion of the global population has been infected and developed antibodies. Early results show that only a small number ‘maybe as few as 2% or 3%’ appear to have antibodies. For a virus with an R0 value of 2 (the lower estimate of Covid-19), herd immunity is achieved when around 60% of the population is immune. This shows there could still be a long way to go before herd immunity is achieved, and lockdowns in varying forms may last longer than some expect.
20 April 2020
A number of European countries have begun to reopen parts of their economies hoping to start the return to normality without seeing a resurgence in the infection rate. Some have had clear success in reducing infection rates and feel they are past the peak; others do not want to be far behind. The UK extended its lockdown for a further three weeks on Friday, with no easing of restrictions. Having a prime minister with first-hand experience of the virus is likely to drive a more cautious approach to lifting the lockdown. At least this gives an opportunity to observe and learn from others rather than leading blindly from the front.
17 April 2020
Figures published by Germany's disease control agency indicate the person-to-person infection rate has dropped to 0.7 in the country. Any value below the crucial 1.0 level means the number of new people infected is less than the number of carriers. Like other countries successful in bringing the virus under control, Germany has been praised for its aggressive testing efforts. This data enables scarce resources to be allocated to stretched health services, allowing more targeted lockdowns and earlier releases. While the UK and others still lag behind in testing, this new data point shows we do not have to wait for a vaccine to achieve control.
16 April 2020
Protesters in the US state of Michigan have demanded that businesses reopen to allow them to work. The governor recently extended the state’s lockdown. Meanwhile, workers in Mexico are protesting to shut factories that remain open as it is risking their health. Clearly there is heightened concern for workers across a number of ‘essential industries’, where they are more at risk of catching the virus. However, this has to be balanced against the need to ensure the continued production of key products (eg food), and for economic activity to resume. Public opinion will be a key driver in balancing the outcome.
15 April 2020
Donald Trump has withdrawn funding from the WHO in a spat over who is to blame for the outbreak. While his motivation is likely to be political rather than financial, he will not be the last to direct the blame. As the economic cost of the virus begins to rise, more fingers will be pointed. Today, the FCA ordered insurers to pay-out on claims (where there is a ‘clear obligation to pay specifically included’ in a policy), or explain why. Insurers worried about their own existence are reluctant to pay-out on the flood of claims. As the days go by and the bills keep mounting, picking-up the tab will become more and more unpalatable.
14 April 2020
The global daily trend of cases is now starting to plateau, as a number of countries are seeing the benefit of government restrictions. Austria, Italy and Spain are tentatively starting to lift some restrictions as they have seen a clear down trend in new cases. Countries around the world will be watching the outcomes carefully and learning from the success and failures of others. Caution will be required as, for example, Hokkaido (Japan’s northern island) has re-declared a state of emergency following a resurgence of the outbreak after restrictions were lifted on 19 March.
9 April 2020
The WTO forecast that goods trade would shrink between 13% and 32% this year, more than in the global financial crisis. However, unlike then, banks are not short of capital and the economic environment is in better shape. The recovery will depend on the duration of the outbreak, the effectiveness of policy responses and the willingness of countries to work together. While the duration is unclear, policy and co-ordination is very much in our collective hands. The WTO forecast a rebound in global goods trade of between 21% and 24%, if governments act effectively.
7 April 2020
On Thursday, the Prime Minister was seen clapping for the NHS on the steps of Number 10 and the worst of his symptoms seemed to be improving. Days later he was admitted to intensive care, where his condition is reported to be stable. The effect on business and the economy could take a similar course. Stocks have rallied this week on positive infection rate trends emerging from Europe. However, as the impact from the global lockdown continues, governments will be desperate to begin exit strategies. Many will jump the gun. Until there is effective testing, a vaccine, or herd immunity is achieved, secondary outbreaks will occur.
6 April 2020
As the weather improves and demands for release become more vociferous, governments need to be clearer on their exit strategies from lockdown. There are numerous suggestions. However, politicians have many issues and unknowns to address and it is easy for others to pontificate. Early release/lighter measures were unsuccessful in Hong Kong. Singapore had to impose tighter restrictions on movement, and cases & deaths increased in Sweden. There’s no clear correlation between the number of tests undertaken/number of deaths and, with 16 countries on the verge of exit, it’s premature to think about relaxing restrictions.
3 April 2020
The UK’s Nightingale Hospital opened today at London’s ExCel centre after nine days of fitting out. It currently has 500 beds, although it has capacity for 3,500. In New York, temporary hospitals are being built in Central Park and the Manhattan Center, and many other pop-up hospitals are filling conference centres, stadiums and parks across the globe. While these are impressive logistical feats, it is two months since China completed its two hospitals in two weeks in Wuhan. It seems surprising that it has taken this long for governments to respond.
2 April 2020
As ever, Rupert Soames speaks clearly and thoughtfully. Serco’s statement today said: “At a time when the UK and other governments are helping Serco with its liquidity, it seems inappropriate to use that cash for anything other than its intended purpose of protecting the financial strength and resilience of our business. We are therefore withdrawing the resolution we had intended to propose at the AGM authorising the payment of a final dividend in respect of 2019. On the same logic, it does not seem right to be spending cash on Executive Directors’ bonuses earned in respect of 2019 whilst government and shareholders are helping us to maintain financial resilience.”
1 April 2020
We have looked at all the lockdowns currently in place around the world, and found that 38% of the global population is currently affected. Clearly, the scale of lockdown is different in each country, but these all have social distancing and stay-at-home measures in place. It is noticeable that every country that has approached its release date has extended it for more days or weeks, with the latest including Bangladesh, Italy, Greece and Denmark. There are tentative hopes from some countries of allowing a gradual release post-Easter, but it is highly likely that the lockdowns will be further extended.
31 March 2020
Chilling headlines and deaths are escalating, but statistics show deaths from coronavirus are low as a share of the total. ONS stats for England & Wales for the week to 20 March show 108 deaths ytd from Covid-19 vs 21,320 for respiratory causes. This lagging indicator uses registered deaths, and will always be behind the latest numbers (1,789 at 31 March), but more complete. Respiratory causes deaths were 71,674 last year; 13.5% of the total. There’s no clear evidence that Covid-19 will register as a statistical event. Indeed, deaths may even decline due to social distancing (ie, less flu) and road deaths will fall materially.
30 March 2020
Today Carluccio’s and Brighthouse filed for administration. Both companies, like Flybe which collapsed earlier this month, were weak before the global outbreak of coronavirus. Weaker companies will continue to fail during this crisis and if, as hoped, government measures are sufficient to keep the stronger afloat, the competitive landscape will be very different on the other side of the pandemic. However, it is unknown which consumer behaviours will return to normal and which will be permanently changed.
27 March 2020
All eyes were on the US today as it became the country with the most confirmed cases in the world. However, on this side of the Atlantic a possibly more significant problem has arisen. EU leaders failed to agree to share the debt that is rising out of this pandemic. They did agree to ask Eurogroup finance ministers to explore the subject further, reporting back in two weeks’ time. Two weeks in this environment is a long time. The problem was no doubt the richer northern countries not wishing to bail out the poorer south, as was the case in the financial crisis. This problem does not look an easy one to solve.
26 March 2020
3.3 million people filed claims for unemployment in the US last week as large parts of the American economy began to shut down. To put this into context, the number of new jobless claims in the prior week was 281,000. It is clear the US economy is already suffering from the behavioural change brought about by the outbreak. With widespread lockdowns a possibility in the future, the enormous stimulus package announced yesterday may already be behind the times.
25 March 2020
As successive countries have seen exponential rises in cases, many have sent clear signals to others at an earlier stage in the outbreak to prepare. Most, if not all, have not heeded the warnings. Even now, Brazil’s President Jair Bolsonaro has called on governors to roll back restrictions. President Trump has said the outbreak will be over in two weeks. As the NHS asks for 250,000 volunteers and looks to commandeer exhibition centres, the message should be clearer than ever. Underprepare for the outbreak at your own risk.
24 March 2020
The UK Government announced a significant escalation in measures last night in response to rising cases, following most of Europe into lockdown. However, we could soon see a shift of the virus epicentre. WHO spokeswoman Margaret Harris said there had been a “very large acceleration” in cases in the US and it has the “potential” to become the next Covid-19 hotspot. The US has seen more than 46,000 cases and 593 deaths with no widespread lockdowns. The US could soon be setting unwanted records as its polarised health system begins to feel the impact.
23 March 2020
The virus sees more people indoors and entertaining themselves digitally. Steam beat its largest concurrent player number again (22m on Sat), Netflix has reduced its resolution to help ISPs, and US video games internet traffic is up 75%.
23 March 2020
As economies close and markets tumble, regulators are increasingly tearing up rule books to ensure that jobs are protected, businesses stay alive and that they don’t make things worse. The US Treasury has announced initiatives providing US$300bn of new financing, but needs to act to support businesses and individuals. Treasury Secretary Mnuchin has said that the administration could consider taking equity stakes. We see this as a sensible move to ensure companies are supported. Proactive efforts by governments could materially limit the damage and enable companies to raise funds.
20 March 2020
It is easy to focus on all the problems, so we are including some good news to highlight where things are getting better and companies are seeing a benefit. It is worth noting that the accounting profession has made the crisis considerably worse for a company with leases. This may not have been intentional, but the decision to include leases as debt has changed the balance sheet structure and this has been included in consensus forecasts. In a crisis, investors focus on companies with leverage and some indiscriminately sell without a proper understanding of the balance sheet. This should be addressed to ensure that it cannot happen again.
19 March 2020
Corporate bond defaults are one of the major risks insurers face in time of stress. As such, the £350bn emergency package announced on Tuesday evening will be welcomed by insurers as Covid-19 disrupts the economy. In times of stress, sub-investment grade bonds are more likely to slide into default; in addition, investment grade bonds dropping into the sub-IG category also consumes capital. Insurers that have the capital strength to hold bonds to maturity are in a better position to absorb the volatility of the bond portfolio.
19 March 2020
Cash & liquidity are of paramount importance, given the uncertain length of disruption. Under a lengthy scenario, companies will need to aggressively conserve cash and test whether the government really will do ‘whatever it takes’. This could include stopping PAYE, NI and VAT payments. Other measures could be to stop business rates payments, even if not on the eligible list, and to reduce pension top-ups to the 3% statutory minimum. Companies will want to retain key workers where possible, so it may be preferable to introduce shorter working hours/weeks until the economy rebuilds.
18 March 2020
Government measures are large and welcome, with the promise of lending and the suspension of business rates very helpful for the most affected sectors. Despite the firepower, this has not comforted equity markets, with further sharp slides today. The government needs to address this given the massive knock-on effect from the loss of value in terms of savings and pensions. The freezing of real estate funds emphasises the point.
18 March 2020
The evolving Covid-19 outbreak could have profound effects on the real estate space. Implications could be far reaching, but quantifying these is highly speculative at present. We share our thoughts on what this may mean for the sector and where the risks may lie. In times of uncertainty, and with share prices materially lower, we look to quality companies with strong fundamentals and long-term prospects.
17 March 2020
Governments across the world have accelerated their responses to the virus outbreak over the weekend and the measures have continued to escalate. While quick to implement, the impact of these measures is difficult to predict and the consequences could be long-lasting. Companies are beginning to shut down in order to reduce costs and limit cash outflow. There will be additional costs when the time comes to restart. Restrictions on movement continue to increase and UK nationals have been told to avoid all but essential travel.
13 March 2020
The words of Christine Lagarde today after she came under fire for her initial response to the crisis. The markets settled somewhat helped by Italy and Spain’s ban on some short selling. Last night, the UK confirmed it was moving to a delay phase in managing the virus. Countries across the globe have increased their response, closing schools, cancelling events and shutting borders. Trump is holding a press conference at 8pm when he is expected to declare a national state of emergency. While there is still debate over the best approach to take, it is clear governments are no longer holding back in their response and are accepting the magnitude of the event.
12 March 2020
Last night the US restricted travel to all EU Schengen area countries. Given the proliferation of the disease across the US, this measure is likely to have minimal success in reducing its spread. In Europe, several countries are shutting schools and banning mass gatherings as governments begin delay phases. While this won’t eliminate the virus, it could reduce the peak of the disease and push it back to summer when health services are better positioned to cope. These delay phases could be vital given the NHS is expecting a ‘several-fold’ increase in intensive care capacity requirements, according to NHS England’s strategic incident director.
10 March 2020
Korea and China have both seen marked declines in new cases over the past few days. South Korea has carried out extensive testing across the country, with nearly 7% of the population tested, while China has conducted mass quarantines and ramped-up its frontline response. This success shows that the disease can be pushed back if the correct steps are taken. It is hoped Italy’s response will have the same effect.
9 March 2020
Over the weekend, Italy locked-down more than 16 million people across 15 provinces until 3 April. This measure was praised by the WHO president, who commended the country’s “genuine sacrifices”. How effective the travel restrictions are remains to be seen. On a positive note, the early signs are that commercial operations are continuing. Elsewhere, the aggressive action taken in China has been rewarded by a rapid reduction in new cases.
9 March 2020
Spreading risk. COVID-19 is rapidly moving from containment to delay in Western Europe and North America. The authorities are paying the penalty for half-hearted containment and tracking in comparison to China and South Korea. As a result, we are likely to see more widespread infection per head of population, as well as longer to return to normal. On a more positive note, the economic impact is likely to be materially less than in China.
6 March 2020
The WHO president was scathing in his condemnation of some countries’ responses to the outbreak in his most recent speech. “We’re concerned that some countries have either not taken this seriously enough, or have decided there’s nothing they can do...the level of political commitment... does not match the level of the threat we all face.” Elsewhere, Lufthansa has announced a massive capacity reduction of up to 50%, which surely will just result in more reductions, and the flight from risk has seen CDS spike on high-yield debt. In contrast, China is returning to work,with Starbucks now reporting that 90% of stores are open.
2 March 2020
The WHO-China Joint mission report provides insight into the progress of COVID-19 and the efforts to contain it. The data shows that the majority of cases in China have been connected to Hubei Province and that improvements in care have resulted in a material reduction in deaths.
28 February 2020
As markets look for a support level, companies need to ‘rebase’ as the scale of disruption becomes more obvious. Emerson Electric is an interesting example: after updating on 13 February, it has now increased its forecast for the impact materially.
27 February 2020
The WHO’s Tedros said “we are at a decisive point” in the epidemic. Similarly, the global economy is nearing a juncture. As the fallout from the outbreak continues, businesses are beginning to see tangible effects on earnings and profits.
20 February 2020
Today once again saw a significant drop in reported cases in China. This is likely due to the government’s actions to contain the outbreak. However, cases are rising outside China, most notably in South Korea, where the number has more than doubled to 104.
17 February 2020
Many factories are re-opening in China this week as hoped, although most at a reduced capacity due to travel restrictions and self-quarantine requirements. There are also issues around new operating regulations, which need to be in place before factories can re-open.
13 February 2020
This note focuses on the potential economic impact of coronavirus. In general, the focus is all about getting back to work. However, supply chains in some areas will have ongoing impact given the need to secure approval for re-opening, shortage of labour and lack of components. There will also be delays through the transport network and the ports, again due to the lack of labour and bureaucratic controls. Assuming the spread of the virus peaks over the next few weeks, business should return to normal over the next couple of months. However, there will be plenty of companies which find their supply chain more disrupted than expected and there will inevitably be longer-term implications.
10 February 2020
The 2020 Non-Executive Director Awards Shortlist has been announced. See below for nominees in the FTSE 100, FTSE All Share, FTSE AIM, Private/Private Equity Backed, Not for Profit/ Public Service Organisation & the NED to Watch.
29 January 2020
We are pleased to share with you the results of the latest QCA/Peel Hunt Mid and Small Cap Survey.
The report investigates the views of fund managers and small and mid-sized quoted companies on the current de-equitisation trends on UK public markets and what can be done about it. It also covers the impact of regulation and MiFID II on liquidity, research and broking houses.
14 January 2020
I can see clearly now, the rain has gone ........ The election result has clearly given the UK housebuilders share prices a shot in the arm. We expect the housing market will follow suit. More consumer confidence and housing demand should see house prices edge up, helping housebuilder margins, while there will be more upside potential for volumes.
13 January 2020
An arms race to detect harmful traffic has reduced the usability of essential business functions such as e-mail, web browsing and content sharing. In wanting to balance the inversely correlated security and usability in favour of better productivity, enterprises have become resigned to a state of insecurity. An approach termed ‘Hardsec’, which uses hardware to extract and verify harmless traffic, has the potential to overhaul this status quo radically. Defining what is ‘good’ is easier than trying to identify the ever-changing ‘bad’. Doing so using simple hardware instead of complex software greatly reduces the risk of compromise.
25 November 2019
Hear from analyst Anthony Leatham talking about the key themes from this years Peel Hunt Investment Companies Conference.
5 August 2019
GB-based gambling companies have to assess ‘affordability’ under new rules issued last week by the Gambling Commission and effective from Halloween. Operators believe they are already responsible; we will find out if they are responsible enough. We believe there is risk to revenue forecasts.
16 April 2019
The Peel Hunt Travel & Leisure analysts believe the key to investing in Leisure is finding the cost mitigation, LFL sales potential (through market positioning, pricing power, scope to innovate or refurbish) and acquisition firepower to offset rising labour costs. The best sub-sectors can grow and embrace technology without attracting over-supply.
9 April 2019
Given the dramatic swings in valuations, government policy and global economic outlook, there is a heightened level of uncertainty among technology executives and investors. Last year, we started our annual sector book by saying that: “we find it harder to recommend a significant overweight position for technology in the coming 12 months”. This year, we take a step back from forecasting the near term to frame the longer-term by looking at key tech themes.
28 March 2019
Sir Roger Carr was crowned the 2019 Lifetime Achievement Award winner at the Non-Executive Director Awards hosted by Peel Hunt. In his acceptance speech, made on the 27th March at Claridges in London he listed the top 5 qualities which make a good non-executive director.
5 February 2019
The QCA/ Peel Hunt Mid and Small-Cap Investor Survey brings together the views of 102 UK-based find managers and 105 small and midsized quoted companies.
24 January 2019
It is the week after the overwhelming rejection of Theresa May’s first Brexit proposal. Looking ahead into 2019, there is a beguiling form of uncertainty. Two years of negotiations have been rejected and a modern version Mr Micawber’s policy of “something will turn up” seems to offer a level of comfort to investors – a solution will be found because the worst surely cannot be allowed to happen.
9 October 2018
With subscription models expanding, outside of the world of video/music, the benefits are clear: lower up-front cost for the subscriber leads to easier customer acquisition and stronger retention, alongside a predictable and guaranteed inflow for cash to support product innovation.
9 July 2018
7758 Ah∅(1-Sw)/Boi. This is the equation used to calculate the volume of oil initially in place in a reservoir, also known as Stock Tank Oil Initially In Place, or STOIIP. This is NOT the same as the volume of oil that can be recovered from a reservoir.
6 June 2018
After the major shakeup of the broking community following the implementation of MiFID II in January 2018, Peel Hunt has retained its title as the UK’s top research house focused on UK Small & Mid Caps in the latest industry rankings from Extel.
8 May 2018
Most of us assume that, even with the help of modern computers, we never will be able to solve many of the problems that are taxing humanity, from degenerative diseases to sustainable energy. The classical binary architecture (1s and 0s) of the computers we use today, no matter how big we make them, negates that possibility. In order to solve problems such as protein folding (eg to find cures for Alzheimer’s) and superconducting efficiency (eg to improve storage and distribution of energy), we must emulate the way Nature itself does those calculations. This is essentially what Quantum Computers are.
23 April 2018
Over the past 15 years, income has accounted for around three quarters of real estate’s total return. Even over the past five years, when capital values have been rising steadily, income has still accounted for half of the return enjoyed.
23 April 2018
MiFID II is, without doubt, the most significant regulatory change to impact the financial markets since the ‘Big Bang’ in 1986. However, despite long running preparations ahead of its implementation in January 2018, nobody quite knew the effect that MiFID II would have on the City of London and the companies and investors it serves, or just how far reaching its implications might be.
19 April 2018
The February/March results season did little to change our bullish view on the UK new housing market (see forecast changes on the left). It also did little to shake our more cautious view on transactions in the second-hand housing market.
27 September 2017
In short, the new build housing market has remained in decent shape over the last 3-6 months, while the second-hand market has remained subdued. Sector share prices have largely followed this pattern, with the housebuilders up 5% in the last three months and estates agents down 2%.
24 August 2017
In this Telecommunications sector note, Peel Hunt discuss the major themes at play in the industry such as our growing hunger for data, the inevitable tipping point for fibre optic technologies, the shifting sands of UK regulation, and Cloud-based services.
7 June 2017
Ahead of the implementation of MiFID II, which is set to transform the sell side research industry from January 2018, Peel Hunt, is delighted to announce that it has been named top research house in the official Extel rankings of brokerage firms focused on UK Small & Mid Caps.
10 April 2017
Peel Hunt is delighted to announce its charity partner for 2017- 2018 is Rays of Sunshine, www.raysofsunshine.org.uk, a children’s charity that grants wishes for seriously ill children aged 3 to 18 across the UK.
5 January 2017
Growth at a reasonable price. The growth companies are chosen by our analysts on a bottom-up basis rather than attempting to create a portfolio or play a particular theme. As such, we see these companies as well positioned to deliver growth in their respective markets.