Covid-19 Round-up: Canada’s CDPQ earmarks C$4bn to support companies

The latest coronavirus / investment news

The Caisse de dépôt et placement du Québec, which manages around C$340bn (€219.9bn) for public and para-public pension and insurance plans, is creating a C$4bn “envelope” to support Québec companies hit by the outbreak. The move complements other initiatives and the funds will be used to address the specific liquidity needs of companies – whether or not they are in CDPQ’s portfolio. It said eligible companies would be able to use these investments to “weather this turbulent period”. It’s among a series of measures including a salary freeze.

Glass Lewis has come out in favour of governance pragmatism over “ideological purity”. The proxy advisory firm said: “Glass Lewis acknowledges that some believe in a prescriptive approach to governance that favors ideological purity over pragmatic principles. We do not believe that discouraging pragmatism, discretion and context serves the interests of shareholders or companies—particularly during a crisis.” The comments come in a posting by Senior Vice President of Research and Engagement Aaron Bertinetti.

The European Investment Bank is in the market with a sustainability bond in the context of the EU’s response to the pandemic. It has mandated BNP Paribas, BofA Securities, DZ BANK and J.P. Morgan to lead manage a €1bn no-grow Sustainability Awareness Bond (SAB) due 15 May 2028, with pricing expected today (April 2).

Munich Re is raising its dividend amid the crisis, though it has withdrawn its 2020 profit guidance and discontinued its planned share buyback until “further notice”. “The proposal to the Annual General Meeting on 29 April remains unchanged: that the dividend be increased to €9.80 per share,” the reinsurance giant said in its first quarter report. Its property-casualty reinsurance segment saw a “considerable claims burden” due to the crisis – “mainly to the cancellation and postponement of large events”.

Burford Capital, the litigation funder backed by institutional investors that has been the target of short-seller Muddy Waters, says the crisis could create “potentially significant levels of new opportunities”. “Looking out at the longer-term, just as the global financial crisis of 2008-09 was followed by a large amount of litigation, Burford expects that the current global crisis and what is likely to be a time of economic pressure will result in a significant increase in the volume of large dollar litigation and arbitration matters in which Burford specialises.”

AXA says its AXA Research Fund, which funds research on infectious diseases and pandemics, has decided to mobilize an additional €5m “for the development of responses to infectious diseases and COVID-19, including the implementation of post-crisis solutions”.

The Australian Sustainable Finance Initiative (ASFI), the body established to set out a roadmap for realigning the finance sector that is backed by the Principles for Responsible Investment and other financial institutions, says its final report will be published later this year. “While we are not setting a date for the delivery of the final report, it may be as late as November / December 2020,” said co-Chairs Jacki Johnson & Simon O’Connor.

The People’s Pension, the UK workplace auto-enrolment pension scheme, has added a new annual change of £2.50 (€2.8) for members to “futureproof” itself against the impact of Covid-19. The new charge reduces the “cross subsidy” by active members of millions of small, inactive pots which are increasingly created by auto-enrolment.  And it also “cushions” revenues against the “extreme market volatility”.