Market Commentary on COVID-19 Developments

Copious amounts of data, news flow, and COVID-19 developments emerge each month. An indicator of each country’s management of COVID-19 is hospital occupancy.

With the exception of the UK, the number of beds occupied in hospitals has decreased over January 2021. This is a good sign and likely the result of continued vaccine rollouts across the world and continued stringent lockdown measures. The percentage of the population in the US, UK, and EU having received a vaccination dose is significantly higher than at the beginning of January (c.12% vs c.2% in the U.S., c.19% vs c.1% in the U.K. and c.4% vs <0.5% in the E.U)(2).

Unfortunately, doubt has been raised over the efficacy of the AstraZeneca vaccine against the “501.V2 variant”, first identified in South Africa. The current vaccines instruct our cells to create the Sars-Cov-2 “spike protein”, stimulating a robust immune response when the spike protein is recognised.

Concern, therefore, arises if the surface of the spike protein that the virus uses to enter human cells is altered. One of the mutations in the 501.V2 variant, and also present in the “P.1” variant currently spreading in Brazil, is called the “Eric variant”. The spike protein in the Eric variant is suspected to have been altered(3). The extent to which the vaccines are still effective is not confidently known, however, South Africa has halted the rollout of the AstraZeneca vaccine after a study showed that it offered little protection against mild and moderate disease caused by the 501.V2 variant(4). The danger, according to epidemiologists, lies in the coming months, in a situation where there is enough community transmission occurring to generate new variants and enough people immunised to create an advantage for variants that can escape the current vaccines.

Notes: (1) Total number of beds occupied in hospitals and ICU as a result of COVID-19 (The Covid Tracking Project, National Health Service England, European Centre for Disease Prevention and Control, Australian Government – Department of Health, as at 31 January 2021). (2) Calculated as the doses administered and therefore may not equal the total number of people vaccinated. Coronavirus (COVID-19) Vaccinations (Our World in Data, as at 9 February 2021). (3) What we know about the most troublesome Covid mutations (Financial Times, as at 8 February 2021). (4) South Africa forced to overhaul vaccine plan over variant fears (Financial Times, as at 9 February 2021).