The WHO review – it’s a task that will put Helen Clark between an American rock and a Chinese hard place

You can’t keep a good woman down and Helen Clark is no exception. Her new appointment, as co-chair of a review of how the World Health Organisation handled the coronavirus pandemic, will test her formidable political skills.

Sitting with her is Ellen Johnson Sirleaf, former Liberian president, who handled the Ebola outbreak in her country six years ago. She is even more formidable than Clark, given her success in Africa.

The appointment is not without risks and challenges. Clark will have to manage both China and the US.

President Donald Trump served notice this week of the US withdrawal from WHO. He brands coronavirus “China virus”.  President Xi Jianping has been fierce  in defending Beijing’s response.

In effect, Clark will end up being ground between two massive stones, one from Washington DC and the other from Beijing.   Will this produce risks for NZ?.

In the US, Clark is well-known as an old leftie, given her links to the various anti-US movements that sprang from the Vietnam war. She was a member of the Labour government which effectively took NZ out of the ANZUS Alliance.

The US declined to support her campaign to become Secretary-General of the United Nations.

Around New York, it was said this was largely because in her job running the UN Development Programme she paid little heed to the US ambassador to the UN. She dealt with presidents and prime ministers only.

The present US administration rates PM Jacinda Ardern. She got on well with President Trump when they met at the UN General Assembly.   And Washington knows Clark no longer represents a NZ government. But if  the  report  is  anodyne,  the  reaction  may  be  chill.

On the  other  side, should the  conclusion  contain  any element of condemnation  of China,   the  mood in Beijing   could be sour.

The NZ Government is dancing cautiously around its relations with China, driven largely because of the vast economic importance of the trade relationship. Foreign Minister Winston Peters has been the only minister to question the role of the Chinese government in foreign policy.

If Clark  and her co-chair land heavily on China and the US in her findings,  probably it would matter more to the former than the latter. Then NZ will discover – as has Australia recently – what happens when you twist the dragon’s tail.



Covid-19 drug trials: Remdesivir shows promise in treatment of patients in US

As  the world  awaits  the  development of  a  vaccine  for  the  novel coronavirus causing Covid-19,  reports   in the past week   of  successful  treatment of severely ill patients at  a Chicago  hospital  with the antiviral  medicine  Remdesivir   were headlined in the US  and  caused a bounce on global sharemarkets.

Remdesivir was one of the first medicines identified  in lab tests as having the potential to impact SARS-CoV-2.  Results from US  biotechnology firm Gilead  Science’s  clinical trials  have been  eagerly  expected  as the  world looks for  positive outcomes which could  lead to fast approvals by the Food and Drug Administration and other regulatory agencies.

If safe and effective, it could become the first approved treatment against the disease.

The University of Chicago Medicine recruited 125 people with Covid-19 into Gilead’s two Phase 3 clinical trials.  Of those people, 113 had severe disease.

All the patients have been treated with daily infusions of Remdesivir. Rapid recoveries were  observed in fever and respiratory symptoms, with nearly all patients discharged in less than a week, Continue reading “Covid-19 drug trials: Remdesivir shows promise in treatment of patients in US”

Sorry, but we can’t find a financial whiz to assure us the short-term economic outlook is bright

It’s been a grim week for investors.  RNZ reported the local sharemarket continued to slide yesterday, because of anxiety about the coronavirus and the prospect of it sparking a global recession,  and the NZ dollar tumbled after the first case in this country was confirmed.

The market mayhem was induced by the global panic as news of more coronavirus cases, notably in Italy, raised concerns of the virus’s economic impact being much greater than previously expected.

The market started the week at a record high but fell every day and had lost almost 7 per cent by the end of trading on Friday.

The three main US indexes ended the week down 10% or more.

“A known unknown” is how one major company boss described the economic fallout of coronavirus to the BBC, which reported the markets have woken up to the disruption to the economic activity from coronavirus being wider, deeper and perhaps longer lasting than previously assumed. Continue reading “Sorry, but we can’t find a financial whiz to assure us the short-term economic outlook is bright”

Dairy exporters remain sanguine while other sectors (and investors) take a hit from coronavirus

Finance Minister  Grant  Robertson insists  NZ  is in a  strong position to weather  the fallout  from   coronavirus, even  though  Australia  has  declared it a  pandemic.

He underlines the  Crown accounts are  buoyant, the fundamentals of the economy are strong and  careful management has seen the economy continue to grow in the face of constant headwinds like international trade disputes and uncertainty over Brexit.

But he concedes there might be a need for fiscal stimulus.

We  are preparing for  multiple scenarios”.

He  says  the government is carefully monitoring the impact of coronavirus on all sectors.

 “We are ready to support our people and our businesses through any eventuality.

 “We believe it is sensible and responsible to plan for every possible scenario, but that does not mean we are predicting them. We are also at a stage in the 2020 Budget process where we can consider the policies required if we need them”.

Robertson’s aplomb might have a hollow ring for investors taking a thrashing in the sharemarket.

Clearly some sectors are  suffering  more than others  and  Westpac  bank  economists  have talked of  a  “significant blow”  to  the  NZ  economy from  the  coronavirus impact. Sectors such as  tourism, education and the logging industry  in  particular  are  under the  pump.

But for the country’s biggest export  sector  there has  been some  reassurance  this  week   with   reports  from  Fonterra  and  A2 Milk  on the state  of  their  sales to   China.

Fonterra confirmed   it is not  revising its forecast farmgate milk price range at $7.00-7.60kg/MS. The co-op reported it has signed deals with suppliers in China, which should offset the impact of the coronavirus.

CEO  Miles Hurrell  said the current situation is very fluid and uncertain.

“However, we have already contracted a high percentage of our 2020 financial year’s milk supply and this is helping us manage the impact of coronavirus. While there had been a slowdown in container processing at ports, products were continuing to be cleared by customs and quarantine officials.

The momentum we saw in the first three months of the financial year has continued, and as we approach the interim results our underlying earnings are tracking well.  However, given the potential significant risks that could arise from coronavirus in the second half, we are taking ant approach and maintaining our full-year forecast earnings range”.

ASB analyst Nathan Penny described it as a “reassuring and comforting” announcement, considering the speculation around coronavirus.

Meanwhile A2 Milk has reported a big jump in interim profit, boosted by strong growth in the Chinese infant nutrition market.  The company’s net profit climbed  21% to $184.9m in the December  half and revenue rose 31% to $806.7m. Chinese label infant nutrition sales doubled to $146.7m, and distribution expanded to 18,300 stores.

Acting CEO Geoff Babidge said the company expected strong revenue growth to continue, but he acknowledged the potential for the Covid-19 coronavirus to impact on supply chains and Chinese consumer demand.

A2’s products were “essential” for many Chinese families and revenue for the first two months of the second half is likely to be above expectations.

However, this is a dynamic situation and at this stage we are unable to quantify the impact, either positively or negatively, for the full year.”

One forecast A2 did make was a medium-term target for its operating profit margin, of around 30%.

This was lower than the first half due to a number of factors, including increased marketing costs, possible supply chain costs resulting from the virus in China, and the potential for “unfavourable” foreign exchange rate movements.

“Given the Covid-19 situation, we are assessing the level of discretionary marketing investment and trade marketing activation that can be effectively deployed in China for the remainder of the fiscal year,” Babidge said.