Tuesday 02/03/21

1. In VACCINE & CORONAVIRUS-RELATED NEWS, France U-turns on AstraZeneca, Hungarians get the Chinese vaccine, Austria/Denmark/Israel’s vaccine side-deal, Novavax triumph, vaccine passports and Covid tests
2. In FLOTATION-RELATED NEWS, we look at Sunak’s City plans, SPACs’ new record and Trustpilot listing in London
3. In CORONATRENDS NEWS, UK factory production slows, household savings increase and Zoom triples its revenues
4. In INDIVIDUAL COMPANY NEWS, Instagram takes on Clubhouse, Twitter clamps down and Klarna readies for acquisitions
5. AND FINALLY, I bring you a depressing new toy and an influencer’s just desserts…

So Europe’s vaccine woes continue as the EU considers vaccine passports and Covid tests fly off the shelf…

📢 *** Watson’s Daily – QUICK BITES alert! *** There’s a Quick Bites report in today’s e-mail! Have a look!

The European vaccine/vaccine distribution farce continues with France lifts restrictions on Oxford/AstraZeneca jab for over-65s (Financial Times, Leila Abboud) signalling a U-turn by the French one month after their dithering with the jab as it has now been deemed OK for the over-65s. Europe’s distribution problems have driven individual countries to seek their own solution in Hungarians receive Chinese Covid vaccine as Orban breaks with EU strategy (Financial Times, Valerie Hopkins and Michael Peel), where Hungary has decided to gets its own vaccines (it’s also the only member of the EU that has approved both the Sinopharm and Russian-made Sputnik V vaccines) and Austria and Denmark forge ‘vaccine alliance’ with Israel (Financial Times, Sam Jones and Richard Milne) shows the three countries looking to get together to develop in-country production facilities for mRNA vaccines along with Pfizer and Moderna as well as sharing vaccine stockpiles. Meanwhile, Slovakia has also departed from the EU agreement and directly sourced 2m doses of the Russian vaccine. * SO WHAT? * This is just getting worse by the day. Countries are getting understandably frustrated with the EU’s lack of speed. Will this just be something that they will forget about over time or could it be the catalyst for further ructions in Europe?

Then in Novavax closes in on Covid triumph after 33 years of failure (Financial Times, Hannah Kuchler) we see that the Maryland-based serial disappointer is on the verge of getting approval in the UK for its coronavirus vaccine – a

rare example of when 💩-polishing comes good. Early data suggests that its efficacy rate is up there with the others but it is easier to transport and it can be kept at room temperature for at least 24 hours. Although highly critical shortseller Citron Research did its best to decimate the company, it will now be eating bucketfuls of humble pie as the company that benefited from $1.6bn from the US vaccine programme Operation Warp Speed is now coming good – and then some. Novavax’s share price has shot up by 4,900% since the start of last year! In your FACE, Citron!

EU plans digital vaccine passports to boost travel (Financial Times, Michael Peel and Alice Hancock) shows that Brussels is thinking about introducing a vaccination e-certificate, called a “Digital Green Pass”, that will help to boost travel around the EU once more people are inoculated. It will give information including proof that you’ve had the jab, test results and information on the holder’s recovery if they have previously had the disease. Detail is to be announced later this month, but there will obviously be objections as to privacy, discrimination etc.

Then in Companies rush to snap up Covid testing kits (Daily Telegraph, Julia Bradshaw and Ben Gartside) we see that companies like diagnostic specialist Excalibur Healthcare are seeing demand for Covid testing kits go through the roof ahead of businesses reopening. Most of the demand has been from big customers in hospitality and entertainment who want to know how to execute lateral flow tests. It would suggest that companies are planning for a May/June return to work. * SO WHAT? * I would have thought that home testing is just going to become a way of life for some time yet, no matter how many people get vaccinated. Still, the more that can be done to get the spread of the virus under control, the quicker we can start to get the economy back on track…

The City hopes ahead of Sunak’s budget, SPACs reach a new high and Trustpilot opts for a London listing…

I won’t say too much about the Budget, which is due out tomorrow, but Sunak to arm City of London for fightback with listings shake-up (Financial Times, George Parker, Daniel Thomas, Philip Stafford and Matthew Vincent) shows that Sunak is set to outline a plan of action to get London back in the mix as a financial centre and fight back against the Americans who are taking SPAC business and Europeans who are taking the trading business. It is expected that regulations will be relaxed regarding the use of dual-class shares (allowing founders to keep control of their businesses), that there could be a potential lowering of the free float requirement and that there would be discussion about whether London could be made more SPAC-friendly. We’ll just have to wait and see tomorrow!

Talking about SPACs, Spac dealmaking sets new record (Financial Times, Ortenca Aliaj, James Fontanella-Khan and Aziza Kasumov) cites Refinitiv data which shows that blank-cheque companies did $109bn-worth of transactions globally last month 😱 in 50 deals as investors used the SPAC route to surf the various waves of customer sentiment. So far this year, SPACs accounted for over 20% of overall dealmaking activity and America has accounted for $58bn of the money raised in this way. * SO WHAT? * Critics say that SPACs are a bubble waiting to burst, but fans say that SPACs are just disrupting an archaic system. I think that SPACs will do well as long as they team up with quality assets, but if there are a few that blow up consecutively I think that sentiment towards them could change dramatically – and quickly.

Meanwhile, Tech founder puts his trust in London with plans for £1bn listing (The Times, James Dean) shows that the Danish founder of Trustpilot has announced plans for a £1bn float on the London Stock Exchange, the first large company from the European Union to announce such plans this year. It plans to sell at least 25% of its shares in the IPO, raising about $50m to fund growth and reduce its debt burden. I think London really needs this right now!

UK factory production slows, household savings rise and the Zoom boom continues…

UK factory production slows amid Brexit and Covid disruption (The Guardian, Richard Partington) shows that Britain’s manufacturers had a tough February thanks to ongoing border disruption but, on the other hand, business optimism appears to be increasing. James Brougham, a senior economist at the manufacturing industry body Make UK, reckons that such delays will limit the sector’s ability to bounce back when the economy starts to pick up. No💩, Sherlock! Still, at least sentiment appears to be more hopeful…

Growth in UK household savings raises hopes of recovery boost (Financial Times, Valentina Romei) implies that there’s a pent-up wall of money just waiting to be unleashed when lockdown lifts as Bank of England figures show that households deposited an additional £18.5bn into bank accounts in January – almost quadruple the £4.8bn monthly average for the last six months! The Bank of England’s Monetary Policy Committee said last month that

households would spend around 5% of their additional savings when restrictions ease, but conceded that the figure could well be higher! * SO WHAT? * I have said this before, but I think that the coronavirus has polarised fortunes of the population into haves (who have kept their jobs or been furloughed) and have-nots (who have lost their jobs and have minimal income). Let’s hope that the haves spend loads in order to power jobs for the have-nots.

Then in Zoom foresees robust growth even as pandemic pressures ease (Wall Street Journal, Maria Armental) we see that one of lockdown’s biggest winners, Zoom Video Communications, is betting that growth will continue at a robust pace through and beyond vaccine rollout. Is said yesterday that revenues this year would climb by over 41% and that it is considering using its $4bn+ cash pile to strengthen the business. * SO WHAT? * I personally think that there’s still a bit to go yet on Zoom growth but that its growth rate will slow considerably going into the end of the year as more people return to their respective offices. I think that the best way that the company can keep itself at the forefront of investors’ minds is to continue to enhance its product offering in order to stave of any potential Zoom fatigue.

Instagram takes on Clubhouse, Twitter gets all moral and Klarna searches for targets…

Instagram expands chat options to rival Clubhouse (Daily Telegraph, Hannah Boland) shows that Instagram has enhanced its chat features to take on the popularity of Clubhouse in its launch of Live Rooms which will allow the broadcast of up to four people (until now, it was limited at two). Instagram says that this will mean people will be able to produce podcasts, host live shows and have live shopping experiences. Sounds interesting – will it take off? Well I think it has a decent chance!

Twitter expands use of enforcement system to Covid-19 falsehoods (Wall Street Journal, Paul Ziobro) shows that the social media network will start to use its strike system to include users who spread false news about the coronavirus and vaccines in an attempt to contain the spread of harmful content. The company said it will permanently suspend users who break its new policy five

times. The first strike will be a warning, subsequent ones will result in increasingly long lockouts and the fifth will mean permanent suspension. * SO WHAT? * This sounds like a positive move, but why hasn’t this been done before??? I also think that it needs to address the matter of cyberbullying etc. as a matter of urgency. 

Then in Klarna targets acquisitions as it raises fresh $1bn of investment (Financial Times, Richard Milne) we see that the Buy Now Pay Later (BNPL) specialist has just raised $1bn and plans to go shopping itself for decent acquisitions. The company now has an implied valuation of $31bn – almost six times what it was valued at only 18 months ago. There are plans to do an IPO in the next one or two years. * SO WHAT? * I think that the company is right to make hay while the sun shines, but I still maintain that it is targeting the demographic that is suffering the most from coronavirus lockdown-related unemployment – young people. I would have thought it would be wise to keep some of this money aside for covering any potential losses further down the line. Or maybe this was the idea all along?

…in other news…

I thought I’d leave you today with a 2020-inspired toy in Fisher-Price sparks debate over play set designed to represent a home office (The Mirror, Rosaleen Fenton) and the influencer who got his just desserts in ‘Cheeky’ influencer tries to blag free meal but ends up at police station (The Mirror, Rosaleen Fenton). Nice move 👍