Business Maverick

Business Maverick

April 17: Five Things You Need to Know to Start Your Day

Brazil's Marine Corps soldiers from the Nuclear, Biological, Chemical and Radiological Defense Company perform disinfection operations at Tram (VLT) stations in downtown Rio de Janeiro, Brazil, on Thursday, April 16, 2019. Brazil’s Rio de Janeiro state Governor Wilson Witzel extended quarantine until April 30 to prevent the spread of novel coronavirus.

Gilead surges after a trial drug shows promising signs of treating the coronavirus. HSBC has set up a new global restructuring unit to help corporate clients struggling in the pandemic. And demands for free speech in China may outlast the virus lockdowns. Here are some of the things people in markets are talking about today. 

Go Gilead

A group of coronavirus patients being treated with Gilead’s trial drug remdesivir in Chicago are “seeing rapid recoveries in fever and respiratory symptoms,” according to a new report. The news triggered a 4.4% climb for the biopharmaceutical company post-market Thursday. Gilead’s drug is one of the most-watched therapies being studied for treatment of Covid-19 patients. Meanwhile, the governor of New York extended a lockdown to May 15 and U.S. President Donald Trump unveiled guidelines on reopening the U.S. economy that could allow states and employers to abandon most social distancing practices within four weeks. The U.K. added three weeks to its restrictions as total infections exceeded 100,000 and new cases also climbed in Italy, Spain and Germany. Singapore reported its highest daily increase for a second day. New Zealand is now seeking to wipe out the virus after an early lockdown success. And new research is telling us that your risk of getting sick from Covid-19 may lie in your genes. Also, can dogs sniff out the virus? Globally, cases topped 2.1 million, and deaths now exceed 140,000. Here are the latest developments.

Markets Rally

Asian stocks looked set for gains as traders awaited the latest economic data from China to assess the impact of the coronavirus. U.S. shares closed higher as President Donald Trump mapped out a phased reopening of the country. Futures edged higher in Tokyo and Sydney, with U.S. contracts that traded after-market extending gains, getting a boost from news that Boeing will resume commercial airplane production in Washington. In a volatile U.S. session, the S&P 500 closed higher and Nasdaq 100 wiped out its losses for 2020. Meantime, the dollar rose, while Treasuries were steady. Oil closed under $20 a barrel for a second day.

Tech Bet

One of Goldman Sachs’s top emerging-market equity funds boosted its bet on Asian stocks during the tumultuous first quarter. The $1.8 billion Goldman Sachs Emerging Markets Equity Fund, managed by Basak Yavuz and Hiren Dasani, increased its wagers on some of the region’s biggest technology companies. Tencent, Alibaba, Samsung Electronics and Taiwan Semiconductor Manufacturing Co. now make up about 25% of their portfolio from 23% in late December, according to filings as of March 31. While it’s unclear when exactly the fund added to its Asian equity exposure, the portfolio’s 17% drop in March marked the biggest monthly loss since late 2008. Still, the fund has topped 82% of peers this past year, and 89% over five years, according to data compiled by Bloomberg.

Helping Hand

HSBC’s recently-installed chief Noel Quinn has tasked his top bankers with creating a new restructuring unit for corporate clients struggling over the coronavirus pandemic. Gregory Guyett, co-head of global banking and markets at HSBC, told employees this week that Chief Executive Officer Quinn asked him and global commercial banking head Barry O’Byrne to assemble the global team to help clients with difficulties in this environment, according to people familiar with the matter. Patrick Nolan, global head of corporate banking, will lead the yet-to-be-created unit and has been named head of client leadership, according to an internal memo seen by Bloomberg. Guyett said the bank would have to support the restructuring of some of its clients, while balancing the lender’s own needs. Nolan will relinquish his corporate banking role. HSBC’s chief risk officer Pam Kaur will also be involved in the work. And as one of the world’s largest lenders, HSBC is likely to be involved in numerous restructurings stemming from the crisis, namely oil — they have a $600 million exposure to beleaguered Singaporean oil trader Hin Leong.

Speech Over Secrecy

In China, demands for more free speech may outlast the virus lockdowns, as public doubts linger about how much the Communist Party’s secrecy and censorship contributed to the crisis. The sentiment is being felt just as China seeks to revive its economy under a host of new restrictions meant to prevent another outbreak. President Xi Jinping allowed some rare criticism of local officials during the height of the outbreak, including mass expressions of grief for whistle-blowing doctor Li Wenliang, who died Feb. 7 after contracting Covid-19. Still, Xi has declared the party’s handling of the virus “correct” and complaints about the central government remain off-limits. Outspoken property tycoon Ren Zhiqiang was placed under investigation last week after he was widely associated with an anonymous article denouncing the country’s “great leader” as a “clown with no clothes on who was still determined to play emperor.” But the risk of dissent boiling over during the outbreak-induced economic slowdown is still very real, as seen in incidents of unrest after the government lifted lockdowns in Hubei province. Dozens of small shop owners protested outside one of Wuhan’s biggest shopping malls to demand a cut in rent last week, days after violent border clashes as police in neighboring Jiangxi province tried to keep Hubei residents out.

What We’ve Been Reading

This is what’s caught our eye over the past 24 hours.


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