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🌎 U.S missed out on RCEP | Fintech and Instagram influencers | Congo is Ebola-free


November 20th, 2020


Happy Friday!


Fortunately, science is making great strides in order to develop a vaccine that could put an end to the Covid-19 pandemic. So far we have Russian, Chinese, North American, Brazilian, European vaccine candidates .... a vast menu ... it is even difficult to choose one from so many.


One thing is certain, the Western world is suspicious of the effectiveness of Putin's, but his daughter is still alive.


Jokes aside, during this week the world got to know the front-runners in global efforts to develop shots to protect against infection with the novel SARS-CoV-2. Drugmakers such as Moderna, Pitzer, and BioNtech have edged ahead, releasing data from late-stage Covid-19 vaccine trials that show more than 90% efficacy. Hopefully, at least one vaccine will be ready for Xmas.



Did You Know...


We all know the global pharmaceutical industry moves millions annually, but would you risk predicting a figure for 2020?


(Answer below)


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CNY

The world's largest trade agreement


At the beginning of the week, national leaders from across 15 different Asia-Pacific countries signed the world’s largest trade agreement. The US was not among them. The Regional Comprehensive Economic Partnership (RCEP) includes most notably, Australia, China, Japan, South Korea and Singapore (fig 1).

Figure 1. RCEP Signatories


RCEP serves to cut tariffs, diminish the costs of doing business and grow supply chains. The agreement is a step forward in transforming the Asia-Pacific into a trading zone like that of North America or the European Union. Economic analysts predict RCEP will substantially increase trade throughout Asia, generating approximately US$209B in additional annual income accruing mostly to the usual suspects; China, Korea, and Japan.

Already crowned the world’s largest trader in 2013, RCEP will give China a leg up on global trade rulemaking. As a consequence of this agreement, international trade opportunities will be diverted away from countries not party to the agreement i.e. the US. Having already withdrawn from the Trans Pacific Partnership in 2017, this means the US will lose out on a large slice of the global market pizza pie. A slice so big that it encompasses almost a third of the world's GDP. The U.S.’s protectionist trade policies have left them in a squeamish and increasingly lonely position on the international stage.


RCEP has placed immense pressure on President-elect Joe Biden to salvage U.S. trade partners, and perhaps rejoin the TPP in an attempt to regain the influence China has won over the Asia-Pacific region. Rejoining the TPP could help the US demonstrate a restored commitment to international trade and provide economic support to US exporters. With China now closing in on the US as the world’s largest economy … will the US be able to stay on top of the game?


FX | Chinese yuan sits at its strongest levels in more than two years, owing to the faster Chinese economic recovery, People's Bank of China (PBoC) policy monetary stimulus, and the recent drop in the USD against its main peers. In general, the CNY’s recent losses do not overshadow the strong fundamentals and high yield differentials, which remain supportive factors for the currency.




Feature Article


Why Private Equity is Revisiting FX Hedging


Latam currencies have been hammered since the start of the year, with Covid-19 not being the only culprit. We take a look into why hedging could be a great option...


Read More Here


GBP


Fyre Festival all over again? Instagram hyped Fintech start-up may be a scam



Lanistar, the latest fintech startup out of the UK, has been issued with a warning by the UK's Financial Conduct Authority. The watchdog stated on Wednesday of this week that Lanistar has been delivering financial services without authorisation. The startup is pursuing millennials and advertising to them on social media. The firm's claim to fame is that the Lanistar bank card, Volt, is the “world's most secure". However, this could all be a scam, warned the watchdog. Firms who operate without authorisation, according to the watchdog, often “ knowingly run investment scams”.


Lanistar managed to enter the limelight by tapping into the wonders of Instagram marketing by paying influencers with millions of followers to share posts not labelled as ads. Influencers include U.K. model Demi Rose and Love Island winner Amber Rose Gill and footballer Kevin De Bruyne. Sound familiar? … *cough* Fyre Festival *cough*


If this doesn’t sound fishy enough, the rabbit hole goes deeper. Lanistar boasts a staff count of 400 strong, however, its LinkedIn account presents a much smaller number… less than 60. The LinkedIn profile picture of Lanistar’s CEO, Gurhan Kizilos, shows him posed in front of a unicorn statue. This is a poised reference to Lanistar’s goal of reaching a valuation of US$1 billion. However, $1 billion seems far on the horizon. Kizilos was recently left in a compromised position after Milaya Capital, a London-based investor, pulled out of a fundraising deal. Kizilos was left with no other choice but to pursue his relatives for funding.


As we’ve learned in the past, it is all too easy to be swept up in the hype created by Instagram influencers. It is crucial to remain skeptical in today’s world where new fintech companies are popping up frequently.


FX | Despite Brexit back-and-forth leaving the Pound susceptible to media reports, as well as with fundamentals showing a potential deterioration in the U.K. economy in Q4, the GBP remains firm against the USD.


CDF


DROC going ghostbusters on Ebola



If we haven't had enough news about virus outbreaks, the Democratic Republic of Congo (DROC) decides to come to the party. However, today is different. We are happy to write about DROC as It is the first time that the vast central African nation has been Ebola-free in about two and a half years.


The DROC declared an end to its 11th Ebola outbreak along with the World Health Organization on Wednesday after no new cases were registered in more than 48 days. The outbreak, which infected 130 people and killed 55, emerged in June of this year, weeks before an Ebola epidemic ended in the province of North Kivu that killed more than 2,200 people, the second-largest in the history of the disease.


To make things worse, the two outbreaks were a great distance apart (Fig 2), and genetic sequencing analysis confirmed they were unrelated.



Fig 2. Province of Équateur


Therefore, we can all imagine the massive logistical challenges for those involved, including health and aid workers from the WHO, local groups, and government agencies. Not only did it come in the middle of the Covid-19 pandemic, when resources were already scarce, but the outbreaks were located in communities across dense rainforests and remote villages (Fig 3).


Figure 3. Province of Équateur



But as everything can get worse in the DROC, armed clashes between rebel groups and government forces happen all the time. Although militant groups are concentrated more in the eastern part of the country (Fig 4), the geopolitical map is unstable, making operating more of a challenge.

Figure 4. Rebel groups in eastern DRC


Despite all the hurdles and difficulties, the end of the Ebola outbreak illustrates that it is possible to defeat even the deadliest virus by using science, technology and local community cooperation. Thus, the lessons learned are an important step to contain Covid-19 not only in Africa but also in all stiff regions across the globe.


FX | Since mid-July, the Congolese franc (CDF) has plummeted against the USD. The CDF, which for months was stable in a range from 1,600 to 1,700 is now trading at around 2,000, in highly volatile sessions. The pair shows annual volatility to be over 13%.



In Other News

Currency Heat Map

This chart shows the relative volatility between currencies. The redder the color, the higher the volatility.



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Quiz of the week


Answers


According to Fortune Business Insights™, the global pharmaceuticals market size is forecast to reach USD 1,310.0 billion in the current year.



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