KASB Ray of hope: The spring of hope

WhatsApp Image 2020 04 25 at 3.33.28 PM

While the return to normal can only come once the vaccine is widely available, most statistics show that the lockdowns have been able to bring the situation in control across the world. Over the past 24 hours, new infections only increased by 0.9% – the lowest increase since late Feb and the first time it has gone below 1% (see chart below).

US company, Moderna has announced that its vaccine has so far productive positive results on human. This is potentially a major news. 45 people were tested for with the drug and the results so far, show an improvement in immunity with minor side effects. As I wrote in an earlier note, 2Q20 will be all about such announcements and 3Q and 4Q will be about the rollout of the vaccine. The ray of hope is slowly turning into a nice sprint.

The US market has now fully recovered from the COVID hit and Oil has climbed back to $34. While there are many different opinions out there, I believe that the Fed “put” provided through the unprecedent fiscal and monetary policy response will create massive asset price inflation. Equities will rally.

There is already evidence that the recovery post lockdown is quite strong. It has been a week since many European countries and the US started to re-open their
economies. The results are very re-assuring. While no economic indicators are out yet, but big data numbers show good recovery across many sectors. The German Central Bank is now using big data (google search, toll collection, electricity usage, air pollution) to gauge the recovery. They see a recovery. Germany allowed the first league football match (played without spectators and with the umpire wearing mask and gloves). The match attracted a record audience (see chart below).

UK NHS results show that 94% of the people who died due to Corona had other underlying conditions – especially diabetes, followed by dementia and heart disease. This might be one of the explanations why Asian countries such as Vietnam have had so few deaths. They don’t have too much obesity and high levels of diabetes.

Pakistan is yet to flatten the curve. Not only are the cases still rising (43,158) but reportedly, 50-70% of the people who have symptoms refuse to get the test done. Testing has become a taboo. As we know from the example of Polio, social behaviors are hard to change. I suspect the cases will grow exponentially. In South Korea, they found that one person who went to the bar impacted 350,000 people. This is inevitable. The safe strategy will be to protect the vulnerable and build immunity. Healthy diet, exercise, Vitamin D, sleep helps.

We pray for the good health of you and your families.

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