Filenews 26 March 2021
Investors are optimistic about the course of vaccination in Europe, despite the fact that the region has so far fallen significantly behind the US, Israel and the UK. They estimate that at the beginning of the summer a sufficient proportion of the population will have been vaccinated to relax the lockdowns, which will allow a gradual return to normality in time to avoid losing the summer season and tourism.
In fact, by the end of the third quarter they estimate that even 100% of the euro area population is very likely to have been vaccinated, which means that growth will soar with significant support from the Recovery Fund resources that will flow in that period.
As they point out, tighter lockdowns now and a little more patience from the world, are the best recipe to see much better days than June.
Deutsche Bank: Plenty of vaccines from Spring
Vaccine disposal is expected to put most of the developed world in a strong position by the summer months, with vaccination rates reaching 60-70% of the population in early summer in the US and Europe and 70%-80% at the end of the summer season, Deutsche Bank estimates. The German bank explains that a total of 12-14 billion doses of vaccines will be produced this year, which is enough to achieve herd immunity internationally, with the US and Europe having ample reserves from Spring onwards.
Deutsche Bank estimates that the recovery in the euro area may ultimately be strong thanks to: (a) the acceleration of vaccinations, (b) the recovery in demand which could add 1% to GDP in 2021, at a time when in the first quarter extra savings in Europe are reaching EUR 600 billion. (c) the US fiscal package, which could add 0.5% to the euro area's GDP this year as it is one of the region's main export partners.
100% of the euro area population will have been vaccinated by the end of the third quarter
The current relatively slow path of vaccinations in Europe is unlikely to derail the prospects of a strong recovery in growth in the coming months, bank of America estimates, for three main reasons.
Firstly, there is growing evidence that the AstraZeneca vaccine is effective, while indications that it is harmful are minimal. Medical authorities in both the EU and the UK have concluded that the AstraZeneca vaccine does not increase the overall risk of thrombosis. While clinical trials have shown higher efficacy for Pfizer's vaccine than for AstraZeneca, real-world data from the UK vaccination campaign show that they have similar high levels of efficacy.
Secondly, vaccine supplies in Europe are expected to improve sharply from the second quarter onwards: the availability of vaccines in the euro area is expected to increase from EUR 90 million to EUR 90 million. in the first quarter to EUR 280 million. in the second quarter and EUR 500 million. the third trimester, which is enough to fully vaccinate 60% of the population of the region by the end of the second trimester and 100% by the end of the third trimester. The reduction in the number of cases in Israel, the Uk and the US is in line with the BofA's view that vaccination campaigns can lead to improved health outcomes even in their early stages.
And thirdly, Europe's economy is expected to be boosted by a strong US recovery. BofA economists expect that the opening up of the economy and the large fiscal stimulus package in the US, combined with the allocation of a significant part of consumer savings, will lead to US GDP growth of 11% in the third quarter. Strong growth in the US combined with the opening up of the economy from the second quarter will lead the eurozone to growth of 7% in the third quarter, the US bank estimates.
Against the above, BofA appears positive for tourism and therefore for the euro area countries that will benefit the most – it recently placed Greece among the winners of the summer, while taking a positive stance on European equities, and trades of cyclical/defensive shares and value/growth shares. It estimates that by the third quarter European shares will rise a further 8%, with a 15% over-performance of cyclical versus defensive and value shares and gains of more than 20% for banks and airlines.
He'll be saved in the summer.
Since its inception, vaccination in the EU has proved slow and chaotic, with vaccine dose allocation issues exacerbating supply challenges in countries, notes Société Générale.
As a result, with 5.5% of the adult population fully vaccinated, the EU lags behind the US by about a month and a half and the UK by about two months in terms of administering the first dose. However, assuming that there is no new notable reaction against vaccines and there are no other significant delivery problems, it seems very likely that high-risk individuals (over 75 years of age and staff in the care/health system) will be vaccinated by the end of April and 70% of adults will be vaccinated by the end of the summer, although not without a significant increase in vaccination campaigns in countries.
Therefore, as SocGen points out, stricter lockdowns combined with vaccinations and the health certificate could allow for the effective lifting of restrictions as early as June, allowing for a gradual return to normality just before the summer season.
In the past three months, four vaccines have been approved by European authorities, and another two could be approved during 2021 as the EU has begun talks with two other pharmaceutical companies. In total, the EU has ordered more than 2.5 billion instalments. This would allow the entire adult population to be fully vaccinated more than four times or three times more if we count only vaccines that have already been approved. Note that some of these payments may eventually be donated to countries with lower and middle incomes, SocGen points out.
In December, the European Commission set two targets for EU Member States: 1) vaccination of at least 80% of over-80s and health and social care workers by the end of March 2021 and 2) vaccination of at least 70% of the adult population by summer 2021. The first objective that does not seem ambitious is to reduce pressure on hospitals and reduce the number of deaths (over-75s account for more than 75% of deaths and, despite recent vaccination efforts, 50% of hospitalisations). The second objective, in order to achieve the immunity of the herd, would allow an almost complete opening up of the economy. The slow initial progress of vaccinations in the EU does not mean that these targets cannot be achieved, after all, the rate of vaccinations in the EU has already increased significantly in recent weeks, from around EUR 500 million in 2000 to around EUR 500 million in 2005. in February to over EUR 1 million. recently daily.
Source: Capital.gr
