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Women’s COVID job crisis was more predictable than we thought

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The U.S. and China are climate frenemies—and maybe that’s OK

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‘Quant winter’ thaw ends long spell of drab returns for funds

Computer-driven investment funds are rebounding from a painful stretch, with big firms such as Clifford Asness’s AQR posting dramatic rebounds after several years of struggles, cutbacks and multibillion-dollar redemptions. Few firms were hit as hard as AQR in the “quant winter” that chilled the performance of quantitative investment strategies in recent years, with the firm shedding $86bn in assets from its 2018 peak. But AQR’s $1.4bn Absolute Return fund — which combines a lot of its strategies in one wrapper — climbed 21.6 per cent in the first quarter, and is now up by a third since the end of September. About 65 per cent of quant mutual funds have surpassed their benchmarks in 2021, according to Nomura. If sustained, that would be the second-best beat rate in at least a decade. Industry insiders are cautious about declaring a definitive “quant spring”, but the rebound suggests that the long winter might be fading, and that many flagship strategies are regaining some of their mojo. For Asness — who turned to violent video game Doom Eternal to relieve stress last year — the signs are heartening. “While 2018 to 2020 was actually the toughest period I’ve seen yet, the first three months of 2021 have made for one of the strongest starts to a year we have had in our history,” Asness said. “I wouldn’t be surprised if this recovery was the biggest and the longest.”Quant investing is a broad field. Some engage in highly complex and ultrafast trading based on faint statistical patterns. Others, including AQR, seek to exploit long-term trends known as “factors”, such as the tendency of smaller stocks to do better than bigger peers over time. Just a few years ago, AQR was riding high on the wave of interest in quant investing, systematically mining these factors to become one of the biggest hedge fund groups in the world. It managed as much as $226bn by mid-2018. Many of its strategies then started spluttering, and AQR’s assets slumped to about $140bn today. AQR is also going through an internal shake-up. Ronen Israel, one of its top executives, is now leaving to help start a biotechnology company after 22 years at the firm, while Lars Nielsen, his fellow co-head of portfolio management, is shifting to a more client-focused role, according to people familiar with the matter. That means all of AQR’s investment teams will now report directly to Asness and fellow AQR founder John Liew. Industry insiders offer myriad explanations for why many quant strategies have fizzled in recent years. It has been a particularly nightmarish stretch for the “value” factor, which takes advantage of how cheap securities in the long run tend to beat more loftily valued, glamorous counterparts. Value has done so badly that the strength of other factors has been insufficient to buoy overall performance for quants that exploit multiple factors simultaneously.The pain was particularly evident last year. In the annual Barclays survey of hedge fund investors, 70 per cent said they had pulled out some or all of their money from “risk premia” funds — as factor strategies are also often called — and not one out of 240 respondents managing a total of $5tn said they planned to increase their allocations. However one of the biggest drivers of the tentative quant spring is the renaissance enjoyed by the value factor since last November, and AQR’s brighter fortunes now are echoed among other factor-oriented hedge funds. Systematica’s Risk Premia fund dropped 13 per cent drop last year but has rebounded 5.5 per cent this year, while Two Sigma’s Risk Premia Strategy lost more than 7 per cent in 2020 but is up slightly this year, according to people familiar with the returns. JPMorgan’s Diversified Risk fund lost around 23 per cent last year, but is up around 4.7 per cent this year. The companies declined to comment.The question is how durable the revival is. Anthony Morris, head of quantitative strategies at Nomura, argues the performance of many major factors is linked to movements in bond yields, and that the industry therefore has to evolve.“The whole industry is deceiving itself and others that these are independent, systematic factors,” he said. “We need to move on. Using new data sources is a way to rescue the quant world from the shackles of fixed income, whether those shackles are recognised or not.”Not all quant funds are enjoying strong recovery either. AQR’s Global Risk Premium hedge fund, which was up just 1 per cent last year, is down almost 3 per cent this year, according to performance numbers seen by the Financial Times. Moreover, a rebound “is cold comfort for investors who suffered through years of underperformance [and] then redeemed”, said Andrew Beer, managing member at Dynamic Beta Investments.Jaime Lee, head of quant equity investing at PanAgora, agrees that the industry will in the future have to lean on the more sophisticated signals they are now unearthing with the help of new data sets and artificial intelligence, rather than the basic factors used for the past few decades. “The quant spring is coming because of the favourable market environment. However the outperformance that we’re seeing from new-generation factors is large,” she said. “I think that’s the future of quant.”

Will Africans take COVID-19 vaccine?

Initially, there was so much misinformation on Covid-19 vaccines out there, a development that made national governments and health officials to be wary of the acceptability of Covid 19 vaccination. However, with over 700 million vaccine doses administered worldwide as of April 19 2021 according to the World Health Organisation (WHO), albeit with only a few in Africa, the latest survey by a group of scholars has provided an insight into which countries in Africa is Covid 19 vaccination’s acceptability or hesitancy highest. A recent survey conducted by a multidisciplinary team of university scholars across 14 countries has shown that Liberia has the highest Covid 19 vaccination’s acceptability in Africa. The questionnaires were administered in English, Arabic and French languages, comprising questions on demographics of the respondents, self-reported health status and literacy, knowledge and perception of vaccines as well as their willingness to be vaccinated, among others. The survey results indicated that 69 percent of Liberians said they would receive Covid 19 vaccination. South Africa came second of the chart as 62 percent of its nationals also indicated they would accept Covid 19 vaccination. Acceptability rate in Malawi is 58 percent; 56 percent in Tanzania, while in Morocco and Nigeria, the level of acceptability is 55 percent each. On the contrary, Cameroon has the least vaccination acceptability among the African countries surveyed. Only 18 percent of Cameroonians said they would accept the vaccination. In the Democratic Republic of Congo (DRC), the level of acceptability is 26 percent while it is 39 percent in Egypt. The multidisciplinary scholars that conducted the survey were from Nigeria, Rwanda, Cameroon, Ghana, Sudan, South Africa, Morocco, DRC, Liberia and Malawi. Others came from the United States of America, France and Germany.The study was led by AbdulAzeez Anjorin, a virologist from the Lagos State University, Ojo., other members of the team are Ismail Odetoun( University of Ilorin); Ajibola Abioye (Harvard University-USA); Hager Elnadi(Tours University-France); Mfon Valencia Umoren(Cincinnati Children’s Hospital, Ohio, USA); Bamu Fufor Damaris(Hannover Medical School, Hannover-Germany); Joseph Eyedo(Lagos State University); Jean Baptiste Nyandwi(University of Rwanda); Mena Abdalla(Minya Health Insurance Hospital, Egypt); Sodiq Olawale Tijani(LUTH); Kwame Sherrif Awiagah(Korle Bu Teaching Hospital, Ghana); Gbolahan Idowu(Lagos State University); Sifeuh Noussi Achille Fabrice(Buea, Cameroon), and Aala Mohmed Osman Maisar (International University of Africa, Khartoum, Sudan). Read Also: Poor fund management bane of education in Nigeria minister We also have Youssef Razouqi(Sultan Moulay Slimane University Beni Mellal, Morocco); Zuhal Mhgoob Ebrahim Mohammed (El Nileen University Khartoum, Sudan); Salim Parker(University of Cape Town); Osaretin Emmanuel Asowata(University of KwaZulu-Natal, South Africa); Ismail Olayinka Adesanya(US Army Reserve & Hospitalist, BayouCity Physicians); Maureen Obara(Hannover Medical School); Shameem Jaumdally(University of Cape Town Lung Institute); Gatera Fiston Kitema(University of Rwanda and St-Andrews University); Taofik Okuneye( General Hospital Odan, Lagos Nigeria); Kennedy Mbanzulu(University of Kinshasa-DRC); Hajj Daitoni(Malawi and Islamic Health Association of Malawi); Ezekiel Hallie(University of Liberia); Rasha Mosbah(Zagazig University), and Folorunso Fasina(University of Pretoria, South Africa). “A total of 5,416 individuals completed the survey. Approximately, 94% were residents of 34 African countries while the others were Africans living in the Diaspora. Only 62% of participants surveyed were willing to receive the COVID-19 vaccination. A total of 79% were worried about the side effects of the vaccine, and 39% actually expressed concerns that they might get infected by receiving the vaccine”, the report says. “The accelerated development and approval of COVID-19 vaccines, therefore, offers a unique opportunity for the prevention and control of COVID-19. The extent to which vaccine hesitancy may limit the success of vaccine distribution is unclear. The objective of this study was to assess the potential coronavirus vaccine hesitancy, and explore the determinants of vaccine hesitancy among Africans”, the report adds. Further, 53.7 percent of the respondents were males while 46.3 percent were females, but vaccination hesitancy is higher in male (45%), than female (41%). Put in other way, 55 percent of the male respondents indicated acceptability of the vaccination unlike the female respondents where 59 percent said they would vaccinate. In terms of age distribution, the modal group is aged 25-34 years old, which constituted 38.1 percent of the respondents. Those aged 18-24 years constituted 22.8 percent; 35-45 years old 22.4 percent, which means, the respondents aged 18-44 years accounted for 83.3 percent of those surveyed by the researchers. Most of the respondents, that is, 77.8 percent, are university graduates, which further explain while 24.2 percent and 67.4 percent of them live in semi-urban and urban areas respectively. West Africa accounted for 1 in every 3 respondents surveyed. In other words, 29.9 percent of the respondents came from West Africa; 19.2 percent from East Africa; 18.1 percent from North Africa; 15.6 from Central Africa; 11 percent from Southern Africa, and 6.2 percent were Africans in the Diaspora. At 72 percent, Southern Africa has the highest vaccination acceptability rate; while on the contrary, Central Africa at 67 percent has the highest vaccination hesitancy rate. 66 percent of East Africans are willing to receive vaccination; acceptability rate in Southern Africa is 72 percent; 55 percent in West Africa; 33 percent in Central Africa, and 63 percent among Africans in the Diaspora. Another interesting insight from the survey is that the more you earn the more the willingness to receive vaccination. This is so because 50 percent of the low income earners were willing to receive vaccination. 56 percent of respondents within the income range of $100-$499 would receive vaccination. 69 percent of respondents within income range $1000-$4999 expressed their readiness to receive vaccination. The income group with highest vaccination acceptability earn between $5000 and $9999, as 73 percent of them expressed their willingness to receive Covid 19 vaccination. 68 percent of income group $10,000 to $14,999 would receive vaccination while 66 percent of those that earn $15,000 and above would also receive vaccination.Economic conditions of many individuals worsened due to the measures taken to curtail the pandemic. Nigeria, Africa’s biggest economy slipped into recession for the second time in five years in 2020, but managed to get out of it with marginal quarterly GDP growth in the last quarter of 2020. Nigeria’s unemployment rate rose for yet another occasion in the country as about 23 million Nigerians are in the labour market plus an inflationary trend that is as high as 18.17 percent as of March 2021.But there is hope on the horizon. As economies relax restrictions, a lot of countries hard hit by the pandemic are now beginning to release positive GDP growth results. For instance, China grew by 18.3 percent in the first quarter of 2021 compared to a corresponding quarter in 2020. In the United States, the Bank of America has raised the country’s annual growth to 7.7 percent in 2021. The survey results will further boost optimism in Africa, because once most Africans are vaccinated, restrictions will be further relaxed and there will be higher productivity on the continent.

ECB keeps policy unchanged, faces taper questions

FRANKFURT (Reuters) -The European Central Bank left policy unchanged as expected on Thursday, keeping copious stimulus flowing even as it faces questions over how...

ECB vows to persist with faster bond purchases to prop up recovery

The European Central Bank has reaffirmed its determination to keep borrowing costs low in the eurozone, saying it will maintain its recently increased pace of bond purchases until the bloc’s economy is firmly on the path to recovery.The central bank kept its main policy measures unchanged on Thursday. In a statement released after the decision, policymakers said that “incoming information confirmed the joint assessment of financing conditions and the inflation outlook carried out at the March monetary policy meeting”.Therefore, “the governing council expects purchases under the [pandemic emergency purchase programme] over the current quarter to continue to be conducted at a significantly higher pace than during the first months of the year”, the statement said.The deposit rate remained at minus 0.5 per cent and the ECB reiterated its stance that its €1.85tn emergency bond-buying programme could be further expanded or not used in full, depending on its progress in stimulating a recovery in output and inflation.The eurozone economy continues to suffer from the containment measures deployed to rein in the bloc’s high Covid-19 infection rates. But the pace of vaccinations has accelerated in many countries recently, fuelling economists’ hopes that restrictions may be eased next month, a move that many expect to trigger a strong rebound.The more conservative members of the ECB governing council hope the economic outlook will brighten enough in the coming weeks to justify reducing the pace of bond-buying when it publishes new forecasts in June, although other council members regard that as premature given the low level of inflation.The debate about when to start winding down the huge bond-buying programmes launched by central banks around the world in response to the economic shock of the pandemic is one of the major issues that policymakers must confront. The Bank of Canada said on Wednesday it would scale back its monthly bond-buying in response to the improving economic outlook. But the US Federal Reserve said last month it was not yet ready to reduce its asset purchases and the Bank of England said recently it expected to complete its bond-buying “around the end” of this year.At the ECB’s last monetary policy meeting in March, it decided to conduct emergency bond purchases at a “significantly higher pace” in the second quarter to mitigate the risk that a sell-off in bond markets could push up borrowing costs before the recovery has taken hold. But since then, its weekly net purchases have increased only marginally, leaving analysts wondering whether the recent rebound in sovereign bond markets led ECB officials to change their minds.

Earth Day: Climate change is becoming ever more important to business

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