Media Snapshot
View from the Top
British Prime Minister Boris Johnson addressed the United Kingdom on Sunday night to report only very minimal changes in the lockdown. Very limited parts of schools will open in early June, although most businesses will take longer to reopen. France, Spain and Iran move forward on loosening restrictions, US states continue to weigh the costs of opening, and South Korea and China report small outbreaks in previously contained areas. In The White House, Dr. Anthony Fauci and other staffers quarantine themselves amidst positive tests.
Forecasts on the mounting costs of the crisis are appearing. The United States alone has added $2.4 trillion to its deficit. There will be no shortage of pundits questioning how we will actually pay this, while the Financial Times examines if the fallout from Covid-related global debt will sow the seeds of the next debt crisis. Vox does a write-up of a new report showing that thousands of companies have not followed the allocation rules of the Paycheck Protection Program and could be forced to repay loans.
Cognito released the Crisis & Issues Readiness Assessment, a short survey for companies of all sizes and industries to help understand preparedness for any future shocks. You can take the assessment by clicking here.
Banking and capital markets
European banks have shelved global ambition in favor of a hyper-local focus of both retail and investment banking activities. This could dampen cross-border mergers and further stifle competition for US banks operating in Europe, writes The Wall Street Journal. Despite this local success, Fitch has grave news for UK banks as the credit agency warns of £25 billion of loan losses in 2020. Lloyds came under fire for flaws in its small business loan program for pandemic-impacted businesses.
The Economist’s annual special report on banking concentrates on Chinese banking expansion and the battle over the world’s payments systems, stressing the uncertainty over the potential for the Yuan as a reserve currency.
Hong Kong has lifted many of its social restrictions as the number of cases in the territory continues to dwindle. The outlook for its stock exchange, however, is less rosy. HKEX is seeing a growing number of China's state-owned enterprises de-list and refocus on the mainland.
Fintech
Covid-19 pushed fintechs and banks towards a better understanding of their strengths and weaknesses, and where they can improve through increased cooperation in areas such as processing credit applications, customer identification and quickly dispersing funds.
Visa bolstered Fast Track – a fintech accelerator program aimed towards payment technology – by shortening the onboarding process from months to weeks. Meanwhile Sifted highlighted startups in France are still looking for workers.
Asset management
This week’s Economist has a cover story about the mounting problems caused by the widening gap between Wall Street positivity and Main Street pessimism. The center, it seems, cannot hold.
Private-equity owned retailers J. Crew and Neiman Marcus both filed for bankruptcy this week in what could be the beginning of a rough patch for private equity giants with large retail holdings. Bond investors are seeing signals the worst is behind us, and are expecting a steepening yield curve, both of which are dependent on how the reopening of the economy goes.
In Beijing’s latest effort to open up China’s financial markets, it officially scrapped foreign quotas in two investment schemes last week. Commentators believe the move may speed up foreign investments in China as assets are available at depressed prices thanks to the pandemic’s impact on the global economy and financial markets.
It only took a global pandemic for Wall Street titans Larry Fink and Lloyd Blankfein to accept higher corporate and wealth tax rates.
Insurance
The question over Covid-related liabilities – both if insurers are liable for business interruption claims and what is the liability for employers (and their insurance firms) in the future – will almost certainly be settled by the world’s highest court.
Congressional Democrats and Republicans are drawing the battle lines over the “liability shield” for companies as part of the next round of stimulus. A case in Pennsylvania raised by a restaurant owner is slowly moving to the Pennsylvania Supreme Court despite lobbying against it by AIG and other insurance trade groups.
The Wall Street Journal covers how the largest life insurance firms are turning away new policies amidst rising demand and sinking interest rates.
Technology
Can smartphones curb the spread of a pandemic disease? Do we even want them to? Maybe – but the different technologies and groups needed to collaborate to make it a reality is a major challenge. Across Europe, governments feuded with Google and Apple. France said it would ‘remember’ Apple’s refusal to provide more assistance with a contract tracing app. Multiple governments chose to develop their own technology rather than rely on an in-progress app from Apple and Google.
An FT Special Report published today describes how the direction of foreign direct investment (FDI) into Asia Pacific has shifted over the last decade. China has flipped from destination to source of much of the FDI, while India and Singapore have become more popular destinations for tech and fintech investments.
Twitter is testing out a function that alerts users their reply may be offensive or harmful in an attempt to improve online conversations, while Facebook is creating a content review board of “20 academics, lawyers, journalists and human rights advocates” to better moderate what can, and cannot, be shared.
Box, wanting to replicate the Covid-growth of remote working applications Zoom and Slack, has made several changes to its platform to increase the ease at which remote workers can move access, share and manipulate files.
The Singapore government is relying on telemedicine and a gadget that checks oxygen levels to strengthen health surveillance in its foreign worker dormitories, which became the city state’s biggest coronavirus clusters and account for the majority of cases in the country.
Story Tracker
Our vice chairman Andrew Marshall is reading The Economist each week to track how many stories mention the pandemic in different ways. This week sees a further climate in stories that are not principally related to Covid.
More from Cognito
Your first meeting post-lockdown: the view from Hong Kong
The head of our Hong Kong office is back in the office and thinking about what the slow return to physical meetings actually mean.
These will be the first face-to-face interactions they’ve had with clients and prospects for some time, so it’s worth planning them carefully. As lockdowns ease in other parts of the world, our experience over these past few weeks in Hong Kong might help you make the best of the opportunity.
The first thing to say is that people are, unsurprisingly, eager to get out and about again. It’s true that some firms here aren’t yet allowing meetings to take place in the office, so being flexible in venue choice and being prepared to travel to a local coffee shop will stand you in good stead.
This is more important that it sounds – many of your contacts won’t be ready yet to go out for lunch, and meeting in a park, for example, is too informal. Coffee shops are an ideal middle-ground to ease back into the meeting cycle, and showing willingness to meet near your contact will help if they aren’t yet completely comfortable traveling.
It’s also true that there’s a huge amount still unknown – business strategies have changed and sales cycles disrupted. So going straight into a meeting mob-handed with a fixed agenda may not be productive – or popular. Start nurturing individual relationships; pick up one-on-one with your contacts and take the time to listen.
Weekly Podcast Recommendation: Prognosis Daily: Coronavirus
Bloomberg's daily Prognosis podcast brings the news, data and analysis you need for living in the time of Covid-19. In around ten minutes, we will explain the latest developments in health and science, the impact on individuals, industries and governments and the adaptations they are making in the face of the global pandemic.