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Oxford/AstraZeneca jab fails to prevent mild and moderate Covid from S African strain, study shows

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The Oxford/AstraZeneca Covid-19 vaccine does not appear to offer protection against mild and moderate disease caused by the viral variant first identified in South Africa, according to a study.

Although none of the more than 2,000 mainly healthy and young patients in the study died or was hospitalised, the findings, which have not yet been peer reviewed, could complicate the race to roll out vaccines as new strains emerge.

In both the human trials and tests on the blood of those vaccinated, the jab showed significantly reduced efficacy against the 501Y.V2 viral variant, which is dominant in South Africa, according to the randomised, double-blind study seen by the Financial Times.

“A two-dose regimen of [the vaccine] did not show protection against mild-moderate Covid-19 due to [the South African variant]”, the study says, adding that efficacy against severe Covid-19, hospitalisations and deaths was not yet determined.

While all Covid-19 vaccines so far have largely held up against the B.1.1.7 variant that emerged in the UK, the strain that originated in South Africa has been more worrying. Both Johnson & Johnson and Novavax have said their vaccines were less effective against the strain in clinical trials conducted in South Africa. In trials, both vaccines offered complete protection against severe disease and death in relation to Covid-19.

Moderna has said it will test a booster shot and a reformulated vaccine to target the South African variant, after studies showed its vaccine was significantly less effective.

BioNTech/Pfizer said their vaccine was slightly less effective in a lab study using a pseudovirus with some mutations from the 501Y.V2 variant, but have not published results of tests against the variant itself.

There are caveats to the Oxford/AstraZeneca study, as the sample sizes were relatively small. The study, led by South Africa’s University of the Witwatersrand and Oxford university, enrolled 2,026 HIV negative individuals, with a median age of 31. Half the group was given at least one dose of placebo, with the other half receiving at least one dose of vaccine.

Tulio de Oliveira, who heads the Network for Genomic Surveillance in South Africa, told the Financial Times the findings were a “wake-up call to control the virus and increase the response to Covid-19 in the world”.

Health authorities worldwide hope vaccines will reduce or completely eliminate the burden of hospitalisation, which would allow for lockdowns to be eased.

While important, it is relatively less urgent to avert symptomatic, but milder, infection that does not progress to hospitalisation.

Sarah Gilbert, lead researcher on the Oxford Vaccine Development Programme, told the BBC on Sunday that she was hopeful the jab would still prove effective in preventing severe illness.

“What we’re seeing from other vaccine developers is that they have a reduction in efficacy against some of the variant viruses,” she said. “What that is looking like is that we may not be reducing the total number of cases. There’s still protection in that case against deaths, hospitalisations and severe disease.”

Any setback for the efficacy of the Oxford/AstraZeneca vaccine would be particularly crucial for the developing world, as the partners are producing billions of doses on a non-profit basis during the pandemic.

The vaccine still appears to be fully effective in preventing hospitalisation and death caused by other variants of coronavirus, according to data from other studies.

AstraZeneca initially declined to comment. It later said it had not been able to properly ascertain the effect of the vaccine on severe disease and hospitalisation caused by the South African variant in the study given most of the participants were young, healthy adults. 

“We do believe our vaccine could protect against severe disease, as neutralising antibody activity is equivalent to that of other Covid-19 vaccines that have demonstrated activity against more severe disease, particularly when the dosing interval is optimised to 8-12 weeks,” it said. It added that other immune responses, such as T-cells, may protect against disease. Initial data, it said, indicated those responses “may remain intact” against the South African variant.

It noted that it had begun to adapt the vaccine against this variant with Oxford, advancing rapidly through clinical development “so that it is ready for autumn delivery [if] needed”.

Oxford declined to comment on the results of the study, saying only that it was working with partners across the globe, including in South Africa, to evaluate the effects of new variants on the first generation of its Covid vaccine.

“Oxford is working with AstraZeneca to optimise the pipeline required for a strain change should one become necessary,” the university said. “This is the same issue that is faced by all of the vaccine developers, and we will continue to monitor the emergence of new variants that arise in readiness for a future strain change.”

Shabir Madhi, director of the Vaccines & Infectious Diseases Analytics (VIDA) research unit at the University of the Witwatersrand, and chief investigator on the trial in South Africa said: “Recent data from a study in South Africa sponsored by Janssen which assessed moderate to severe disease, rather than mild disease, using a similar viral vector, indicated that protection against these important disease endpoints was preserved.”

He added: “These findings recalibrate thinking about how to approach the pandemic virus and shift the focus from the goal of herd immunity against transmission to the protection of all at risk individuals in population against severe disease.”

South Africa’s Department of Health did not respond to a request for comment.

The 501Y.V2 variant, dominant in South Africa, has recently been discovered in countries all over the world, including the US and the UK.

The so-called Kent variant, which Oxford university said on Friday was just as susceptible to its vaccine as older variants of the virus, has now acquired the E484K mutation in a few cases that UK health authorities are trying to stop spreading. E484K is present in the variants fuelling Covid-19 surges in Brazil and South Africa.

South Africa took delivery of 1m doses of the AstraZeneca vaccine last week, the first Covid-19 vaccines to arrive in the country, as part of a 1.5m dose order from India’s Serum Institute.



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Emerging Markets

Tech-heavy Taiwan stock index plunges on Covid outbreak

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Taiwan’s stock market, home to some of the world’s biggest tech companies, suffered one of the largest drops in its history as investors were rocked by a worsening Covid-19 outbreak.

The Taiex fell as much as 8.55 per cent on Wednesday, the index’s worst intraday fall since 1969, according to Bloomberg. It finished down 4.1 per cent.

Construction, rubber, automotive and financials — sectors retail investors had been shifting into from technology in recent months — were the worst hit in the sell-off.

The world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Company, which has a 30 per cent weighting in the index, fell as much as 9.3 before recovering ground to be down 1.9, while Apple supplier Hon Hai Precision Industry, also known as Foxconn, dropped 9.8 per cent before paring losses to be down 4.7 per cent.

While Taiwan’s sell-off was related to domestic Covid-19 problems, it followed recent declines in global markets as investors worried about possible inflationary pressures.

The falls came as Taiwan’s government was expected to partially close down public life to contain a worsening coronavirus outbreak — something the country had managed to avoid for more than a year.

“The reason that triggered the escalated sell-off during the trading session is the new [Covid-19] cases to be reported this afternoon, and probably the raising of the pandemic alert level,” said Patrick Chen, head of Taiwan research at CLSA. “On top of that, the market before today was already at a point where the index was at an inflection point.”

Taiwan’s strict border controls and quarantine system and meticulous contact tracing measures had helped it avoid community spread of Covid-19 until recently.

That success, which allowed Taipei to forego lockdowns, helped boost the local economy, which grew about 3 per cent last year and 8.2 per cent in the first quarter of 2021.

But health authorities announced 16 locally transmitted confirmed cases on Wednesday, for three of which the infection source was unclear — a sign of widening spread in the community. Authorities had confirmed seven untraced cases on Tuesday, and domestic media reported that the government might introduce partial lockdown measures.

President Tsai Ing-wen called on the public to be vigilant but avoid panicking.

Taiwan’s stock market rose almost 80 per cent over the past year, peaking at a historical high late last month. It is now down 8.5 per cent from that mark.

Retail investors have increasingly moved out of technology stocks in recent weeks, reducing the sector’s weight in trading volume from almost 80 per cent at its height to just over 50 per cent.

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China factory gate prices climb on global commodities boom

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The price of goods leaving factories in China rose at the fastest pace in more than three years, on the back of a rally in commodities supported by the country’s economic recovery.

The producer price index rose 6.8 per cent in April year-on-year, beating economists’ expectations and surpassing March’s increase of 4.4 per cent.

The rate was driven in part by comparison with a low base last year in the early stages of the pandemic. But it also reflects a global surge in the prices of raw materials that was first stoked by China and now incorporates expectations of recovering global demand.

While PPI prices in China have leapt, economists suggested there was limited spillover into consumer prices and that the central bank was unlikely to react. China’s consumer price index added just 0.9 per cent in April, the National Bureau of Statistics said on Tuesday, although it touched a seven-month high.

“It tells us that demand at this moment is super strong,” said Larry Hu, head of greater China economics at Macquarie, of the PPI data, although he suggested policymakers would see the increase as “transitory” and “look through it”.

“We’re going to see some reflation trends,” he added.

Signs of tightening in China’s credit conditions have drawn scrutiny from global investors eyeing the prospect of higher inflation as the global economy recovers from the pandemic, especially in the US, which releases consumer price data on Wednesday.

China’s PPI index remained mired in negative territory for most of 2020 following the outbreak of coronavirus, but has started to gather momentum this year. Gross domestic product growth in China returned to pre-pandemic levels in the final quarter of 2020.

An industrial frenzy in China has stoked demand for commodities such as oil, copper and iron ore that make up a significant portion of the index and have helped to push it higher. 

Policymakers in China have moved to tighten credit conditions, as well as attempted to rein in the steel sector. Ting Lu, chief China economist at Nomura, said the relevant question now was “whether the rapid rise of raw materials prices will dent real demand, given pre-determined credit growth”.

Retail sales in China have lagged behind the growth rate of industrial production, putting downward pressure on CPI, which has also been weakened by lower pork prices that rose sharply on the back of African swine fever. Core CPI, which strips out food and energy, rose 0.7 per cent in April 

Julian Pritchard-Evans, senior China economist at Capital Economics, said that producer prices were feeding through into the rebound in consumer prices, but also suggested that pressures on the former were “likely to be mostly transient”.

He added that output prices for durable consumer goods were rising at their fastest level on record.

China’s rapid recovery has been driven by its industrial sector, which has churned out record quantities of steel and fed into a construction boom that policymakers are now trying to constrain. On Monday, iron ore prices hit their highest level on record, while copper prices also surged.



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Iron ore hits record high as commodities continue to boom

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The price of iron ore hit a record high on Monday in the latest sign of booming commodity markets, which have gone into overdrive in recent weeks as large economies recover from the pandemic.

The steelmaking ingredient, an important source of income for the mining industry, rose 8.5 per cent to a record high of almost $230 a tonne fuelled by strong demand from China where mills have cranked up production.

Other commodities also rose sharply, including copper, which hit a record high of $10,747 a tonne before paring gains. The increases are part of a broad surge in the cost of raw materials that has lasted more than a year and which is fanning talk of another supercycle — a prolonged period where prices remain significantly above their long term trend.

The price of timber has also hit a record high as US sawmills struggle to keep pace with demand in the run-up to peak homebuilding season in the summer.

“Commodity demand signals are firing on all cylinders amid a synchronised recovery across the world’s economic powerhouses,” said Bart Melek, head of commodity strategy at TD Securities.

Strong demand from China, the world’s biggest consumer of commodities, international spending on post-pandemic recovery programmes, supply disruptions and big bets on the green energy transition explain the surge in commodity prices.

Commodities have also been boosted by a weaker US dollar and moves by investors to stock up on assets that can act as a hedge against inflation.

The S&P GSCI spot index, which tracks price movements for 24 raw materials, is up 26 per cent this year.

Strong investor demand pushed commodity assets held by fund managers to a new record of $648bn in April, according to Citigroup. All sectors saw monthly gains with agriculture and precious metals leading the way, the bank said.

Agricultural commodities have had an especially strong run owing to rising Chinese demand and concerns of a drought in Brazil. Dryness in the US, where planting for this year is under way, is also adding to the upward rise in prices. Corn, which is trading at $7.60 a bushel and soyabeans at $16.22, are at levels not seen since 2013.

“From a macro economic environment to strong demand and production concerns, the ingredients are all there for the supercycle,” said Dave Whitcomb of commodity specialist Peak Trading Research.

Rising copper and iron ore prices are a boon for big miners, which are on course to record earnings that will surpass records set during the China-driven commodity boom of the early 2000s.

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JPMorgan reckons Rio Tinto and BHP will be the largest corporate dividend payers in Europe this year, paying out almost $40bn to shareholders. Shares in Rio, the world’s biggest iron ore producer, hit a record high above £67 on Monday.

Brent crude, the international oil benchmark, has crept back up
towards $70 a barrel, which it surpassed in March for the first time in
more than a year, recovering ground lost as the pandemic
slashed demand for crude and roiled markets.

Supply cuts by leading oil producers have helped to bolster the market
as consumption has begun to recover around the world.

While some Wall Street banks have hailed the start of a new supercycle, with some traders talking of a return to $100 a barrel oil, others are less convinced. The International Energy Agency said oil supplies still remain plentiful meaning any talk of a supercycle is premature.



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