TheChek News Flow

Shares soar after promising but preliminary results in trial of coronavirus vaccine

Hope is the ultimate drug for both the infirm and the investor. In May, Moderna, a Boston-based biotech, announced promising but preliminary results in an early-phase trial of a coronavirus vaccine. Shares soared, sending its market capitalisation to $31bn. Heady stuff for a company that had yet to commercialise a treatment for any disease or illness. Hours after the announcement it priced a $1.3bn stock offering off its suddenly buoyant stock price. 

With ordinary companies battered by an economic slowdown that has turned off revenue, many investors are happy to wager on companies whose near-term business model is, intentionally, not to have immediate revenue. Biotechs have dominated US initial public offerings. Excluding blank cheque companies, more than half of US listings in 2020 have been healthcare businesses.

Of 19 healthcare IPOs this year, 17 are trading above their IPO price. Among the 17, several have doubled or more. Gilead Sciences, whose Remdesivir has shown promise as an antiviral treatment for Covid-19, has seen its stock jump by 14 per cent this year, ahead of the Nasdaq biotech index which is up a tenth.

Still, most drugs fail to reach commercial viability. Shareholders are making hopeful but risky bets on complex technologies that are, by definition, unproven. Outside life sciences, most companies at the IPO stage need to show either real profits or galloping revenue growth. But shares in emerging healthcare companies are binary call options. Out of a portfolio of treatments, maybe one or two will hit pay dirt.

More attention is now being paid to the details of the Moderna vaccine trial. The trial had just eight participants who showed “neutralising” antibodies. Some experts were wary of drawing conclusions from the limited data Moderna released. Though its shares have tripled this year, the stock is down a quarter from its peak. Investors who bought the stock offering have made big paper losses. Testing will advance to the next stage in the weeks and months ahead.

Investment is an art, not a science. But evidence still matters. More of it is needed before backing Moderna.

CQS’s Hintze blames ‘unprecedented’ crisis for huge losses

Performance of flagship fund has almost halved this year, hurt by positions in structured credit

Billionaire investor Sir Michael Hintze has blamed an “unimaginable” market crisis for the roughly $1.4bn of losses suffered by his CQS hedge fund in just two months during this year’s coronavirus pandemic.

In a letter to investors, seen by the Financial Times, Sir Michael said that his CQS Directional Opportunities fund’s 17.6 per cent loss in April was mainly driven by positions in structured credit, which were also largely behind a 33 per cent fall in March.

The chance of “extreme stress” hitting different countries, sectors and companies at the same time was “unimaginable until this unprecedented pandemic struck”, wrote Sir Michael, who founded London-based investment firm CQS 21 years ago.

Last month the FT revealed Sir Michael’s large loss in April, a month in which many hedge funds made back some of the losses incurred in March’s turmoil as riskier markets rebounded.

The performance means his fund, which trades a wide range of credit assets as well as equities and other instruments, is down more than 46 per cent this year. That leaves Sir Michael, who is well-known beyond the finance industry for his philanthropy and donations to the Conservative party, as one of the highest-profile hedge fund casualties of the coronavirus crisis so far.

It also puts the fund on course for easily its biggest annual loss since launch in 2005.

Sir Michael, known for a punchy investment approach that has often generated large gains, wrote at the turn of the year that he was “cautiously optimistic” for 2020. That bullishness cost him as riskier assets began to tumble on signs the virus was spreading throughout Europe. 

CQS, which earlier this year was managing around $20bn, declined to comment.

The letter revealed that April’s losses were mainly driven by “idiosyncratic widening” of some structured credit positions, with two defaults in energy positions. The fund also lost money on its credit index hedges and “pandemic-related hedges”, as well as distressed positions in the retail sector.

Last month people familiar with the matter said that CQS invested in the riskiest slices of derivative products, the performance of which was hit by a spate of bankruptcies such as Diamond Offshore Drilling and Whiting Petroleum.

Despite the losses, Sir Michael struck a more optimistic tone in the letter, noting that he believed the environment could provide “many opportunities” and that cutting some positions “put us in a better position to reposition risk later this year”.

Sir Michael, 66, who was born in China and raised in Australia, has a net fortune estimated by the Sunday Times Rich List at £1.5bn. The former Goldman Sachs and Salomon Brothers trader recorded gains of more than 30 per cent in his fund in 2012 and 2016, although it struggled in 2018’s choppier markets.

CQS’s Hintze blames ‘unprecedented’ crisis for huge losses

Performance of flagship fund has almost halved this year, hurt by positions in structured credit

Billionaire investor Sir Michael Hintze has blamed an “unimaginable” market crisis for the roughly $1.4bn of losses suffered by his CQS hedge fund in just two months during this year’s coronavirus pandemic.

In a letter to investors, seen by the Financial Times, Sir Michael said that his CQS Directional Opportunities fund’s 17.6 per cent loss in April was mainly driven by positions in structured credit, which were also largely behind a 33 per cent fall in March.

The chance of “extreme stress” hitting different countries, sectors and companies at the same time was “unimaginable until this unprecedented pandemic struck”, wrote Sir Michael, who founded London-based investment firm CQS 21 years ago.

Last month the FT revealed Sir Michael’s large loss in April, a month in which many hedge funds made back some of the losses incurred in March’s turmoil as riskier markets rebounded.

The performance means his fund, which trades a wide range of credit assets as well as equities and other instruments, is down more than 46 per cent this year. That leaves Sir Michael, who is well-known beyond the finance industry for his philanthropy and donations to the Conservative party, as one of the highest-profile hedge fund casualties of the coronavirus crisis so far.

It also puts the fund on course for easily its biggest annual loss since launch in 2005.

Sir Michael, known for a punchy investment approach that has often generated large gains, wrote at the turn of the year that he was “cautiously optimistic” for 2020. That bullishness cost him as riskier assets began to tumble on signs the virus was spreading throughout Europe. 

CQS, which earlier this year was managing around $20bn, declined to comment.

The letter revealed that April’s losses were mainly driven by “idiosyncratic widening” of some structured credit positions, with two defaults in energy positions. The fund also lost money on its credit index hedges and “pandemic-related hedges”, as well as distressed positions in the retail sector.

Last month people familiar with the matter said that CQS invested in the riskiest slices of derivative products, the performance of which was hit by a spate of bankruptcies such as Diamond Offshore Drilling and Whiting Petroleum.

Despite the losses, Sir Michael struck a more optimistic tone in the letter, noting that he believed the environment could provide “many opportunities” and that cutting some positions “put us in a better position to reposition risk later this year”.

Sir Michael, 66, who was born in China and raised in Australia, has a net fortune estimated by the Sunday Times Rich List at £1.5bn. The former Goldman Sachs and Salomon Brothers trader recorded gains of more than 30 per cent in his fund in 2012 and 2016, although it struggled in 2018’s choppier markets.

Transactions surge outweighs any negative impact, predicts payments tech group

Wirecard announced on Wednesday that a strong additional surge in online transactions in Asia and Europe had compensated for the negative effects of coronavirus on its payments processing business.

The Dax-listed technology group is one of the few large companies to predict no impact on its pre-pandemic forecasts for 2020, even as it has blamed Covid-19 for delays to the publication of audited financial statements for 2019.

Wirecard has substantial exposure to the travel industry. The company said it assumed an easing of coronavirus restrictions would “reactivate the airline and travel business” later this year.

The announcement was made as the Dax-listed group faces intense scrutiny over its accounting practices, following a special audit by KPMG that did not resolve questions over its financial statements.

KPMG said it was unable to verify whether arrangements responsible for the “lion’s share” of profits from 2016 to 2018 were genuine, and did not receive bank confirmations or statements to establish the existence of €1bn of cash.

Wirecard’s share price has fallen 28 per cent since publication of the KPMG report on April 28, to give it a market capitalisation of €11.7bn. Release of full-year figures approved by Wirecard’s longstanding auditor, EY, has since been twice postponed and is now scheduled for June 18, when the group said it would “provide detailed reports on growth plans and intended structural measures”.

The group last month appointed a chief compliance officer, who is set to join Wirecard’s supervisory board on July 1. Wednesday’s statement said that with the appointment Wirecard “will in future make itself less susceptible to any suspicion directed against the company”.

The KPMG special audit was launched in October after the Financial Times published documents indicating that sales at Wirecard businesses in Dubai and Dublin had been fraudulently inflated.

German regulator BaFin has said that multiple investigations were continuing and that the group also faced a criminal investigation in Singapore into alleged accounting fraud at eight Asian subsidiaries.

Wirecard has denied any wrongdoing and on Wednesday reiterated its position that suspicions over its Singapore business “have been conclusively cleared up”.

Wirecard also said that with regard to the transactions and account balances that KPMG could not verify: “Corresponding evidence was provided in the course of the audits of the consolidated financial statements. It is therefore incorrect to assume that there is no evidence whatsoever for these transactions.”

Effort to boost consumer demand includes cuts to VAT and €300 for every child in the country

The German government has agreed a €130bn fiscal stimulus centred on a big cut in value added tax as it scrambles to mitigate the economic damage of the coronavirus pandemic.

From July 1 until the end of 2020, the standard rate of VAT will be reduced from 19 to 16 per cent, and the lower band cut from 7 to 5 per cent — a measure that will cost €20bn. The government also plans a €300 one-off “children’s bonus” payment for every child in the country.

The aim of the package is to stimulate consumer demand as Germany comes out of the coronavirus-related lockdown and public life gradually returns to normal. Thanks to the pandemic, the country is heading for the worst recession in its postwar history, with gross domestic product set to shrink 6.3 per cent this year, according to officials. But ministers believe that without urgent action to ease the burden on companies and taxpayers, the economic damage could end up being worse.

In announcing the package, Angela Merkel, chancellor, said the fact that Germany had 7m temporarily furloughed workers “shows how fragile the situation is, and how we must now succeed in boosting the economy and so safeguarding jobs”.

As well as the VAT cut, the measures include generous financial help to hard-pressed municipalities and expanded incentives for buying electric cars. The measures were announced after 21 hours of negotiations between the partners in Ms Merkel’s governing “grand coalition” — her own Christian Democratic Union, its Bavarian sister party the CSU, and the left-of-centre Social Democrats.

The package will cost €130bn in 2020 and 2021, with €120bn being paid by the federal government and the rest by the country’s regions and municipalities. Olaf Scholz, finance minister, said the new stimulus measures would necessitate an extra emergency budget this year, but the additional sums that would have to be raised were “manageable”.

But the car industry will be disappointed that the measures do not include any incentives for the purchase of conventional petrol and diesel cars, similar to the “scrappage” scheme that helped get the German auto sector back on its feet after the 2008-09 financial crisis.

The stimulus comes on top of the massive economic aid package Berlin unveiled at the start of the crisis, which, according to the Bruegel think-tank, is equivalent to 10.1 per cent of its GDP, making it larger than that of any other western country. That package included a €100bn fund to buy stakes in companies laid low by coronavirus: €50bn in direct grants to distressed small businesses; and €10bn for an expanded furloughed worker scheme.

In a statement, the coalition partners said that having reduced the number of new infections and gradually lifted the coronavirus shutdown, they now intended to “lead Germany back to a sustainable path of growth, which will secure jobs and prosperity”.

To do this, the government not only had to mitigate the effects of the shutdown, but also modernise the economy, promoting innovation and removing obstacles to growth. “Germany must emerge strengthened [from this crisis],” the statement said.

The stimulus includes a reduction in electricity prices for consumers through a cut in the Renewable Energy Act levy, which is used to subsidise solar and wind energy. There are also generous federal allocations to municipal councils whose tax revenues have been badly hit by the reduction in business activity.

The government also agreed on a €25bn package of “bridging aid”, limited to the period from June to August, for hospitality businesses such as hotels, restaurants, bars and clubs that have been particularly hard hit by coronavirus. In addition, the coalition partners signed off on a €50bn “future package” including measures to promote investment in research, particularly in areas such as artificial intelligence and quantum computing.

Managers say asset prices have become too detached from bleak fundamentals

Hedge funds are getting ready for another slump in stock markets after growing uneasy that surging prices do not reflect the economic problems ahead.

Some managers fear that equity investors, used to buying the dips during the decade-long bull market that ended in March’s sharp sell-off, have become too complacent about how quickly economies can recover from the coronavirus crisis and how effective stimulus packages from central banks and governments can be.

The S&P 500 index completed its best 50-day run in history on Wednesday, according to LPL Financial, closing within 8 per cent of its record high of mid-February.

“The markets are priced to perfection,” said Danny Yong, founding partner at hedge fund Dymon Asia Capital in Singapore. “The stability in equity markets does not reflect the job losses and the insolvencies ahead of us globally.”

Mr Yong has been buying put options — which protect against market falls by allowing their owner to sell at a pre-determined price — on stock indices and also on currencies sensitive to risk appetite such as the Australian dollar and the Korean won.

“I believe we will see new lows in global equity markets later this year,” he added. “As March . . . has shown us, prices cannot diverge from fundamentals for too long.”

Other hedge fund managers have expressed concerns about the sharp rebound in stocks from the March lows.

Stanley Druckenmiller, a protégé of George Soros who stepped back from managing outside money a decade ago, recently said he expected a wave of bankruptcies and that a V-shaped economic recovery was a “fantasy”.

Paul Singer’s Elliott Management, which has $40bn in assets, wrote in its most recent letter to investors that since the impact of the economic downturn is greater than that of the 2008 financial crisis, “our gut tells us that a 50 per cent or deeper decline from the February top might be the ultimate path of global stock markets”.

The fund made money during the first-quarter crash from hedges in stocks and credit, and said it was trying to find new ways of protecting itself against another market fall after some hedges became more expensive.

Despite a slew of bleak economic data — including more than 40m Americans filing for unemployment benefits and an expected record contraction in the eurozone economy in the second quarter — the S&P 500 has surged almost 40 per cent since its trough in March, leaving it down just 3 per cent for the year. The index is now trading at more than 22 times expected earnings for the next 12 months, according to FactSet figures, taking the common valuation measure back to levels not seen since the early 2000s.

Mr Yong believes investors could soon discover that the so-called “Fed put” — the concept that the central bank will step in to support markets — may be reaching its limits.

“Some people believe the Fed’s unconventional measures are limitless but this is not the case,” he said. “It's now about the “Trump Put” — how much more stimulus can he push through? I think he [US President Donald Trump] will be constrained by Democrats in the House.”

Morgan Stanley said in a recent note that its hedge-fund clients hold a net short position of around $40bn in Euro Stoxx 50 futures. Global macro hedge funds have sharply reduced their exposures to stocks this year, according to JPMorgan Cazenove.

“It is entirely possible that there will be a fourth quarter reckoning, where a second wave of job losses and a prolonged period of business failures tests equity sentiment,” said Seema Shah, chief strategist at Principal Global Investors.

Francesco Filia, head of London-based hedge fund Fasanara Capital, is holding 70 per cent of his fund in cash and also using put options and other instruments to hedge his portfolio while he waits for a “severe rupture” in markets.

He sees threats in the trend towards “deglobalisation,” which could drive inflation higher, and growing political interference in the technology sector, which could hurt shareholder returns. He expects a potential “2008-style . . . daily liquidity crisis” as investors try to pull money from exchange traded funds that may not be able to meet those redemptions.

However, many fund managers are reluctant to bet outright against stocks in the face of stimulus efforts from the Federal Reserve and European Central Bank, both of which have argued they have firepower in reserve.

The market hitting new lows “is possible,” said Tom Clarke, who has a low exposure to stocks at a macro fund at William Blair in London. But he added that government and central bank stimulus packages have “taken on almost mythical proportions. There’s no doubt in which direction policymakers want markets to go”.

Airbus veterans called up to rescue aviation supply chain

With suppliers facing cash squeeze, governments have turned to three retired executives

They are the A-team — respected veterans of Airbus, Europe’s aerospace champion, recalled from retirement to defend the industry’s fragile supply chain against a devastating collapse in demand.

Each has been chosen to lead a national task force: Tom Williams, former chief operating officer of Airbus commercial, for the UK; Didier Evrard, ex-head of aircraft programmes, for France; and Bernhard Gerwert, previously chief executive of the defence arm, for Germany. 

The aim is to bring together each country’s big aerospace manufacturers to plan for the survival of their shared domestic suppliers. Even before the pandemic, many suppliers had been weakened by the grounding of Boeing’s 737 Max single-aisle jet after two fatal accidents. 

Now many companies in Europe’s €127bn-a-year civil aerospace industry face a crippling cash squeeze. Payments for orders that came before demand collapsed will begin to dry up from the end of this month. Meanwhile, bills for goods ordered when forecasts were brighter are now falling due.

“This wave is coming towards them and they are under pressure,” said one senior industry executive.

But the task forces have a longer-term mission too, and one that is already under strain from mixed political and business motives. It is to win government support for a radical restructuring of their highly fragmented domestic supply chains, so Europe’s three biggest aerospace industries will be competitive when demand eventually returns.

“There has to be a reshaping of the landscape,” said Mr Williams, who retired in late 2018 after two decades at Airbus. “A number of companies have struggled to earn a decent level of profitability. We need to create companies that are more robust to protect core technologies for the upturn.”

Right now, many customers are refusing to take deliveries, suspending contracts, cancelling orders or demanding price cuts. They will run down their own buffer stocks before coming back to suppliers for more, exacerbating the impact of the downturn. 

“This is the reality,” said Michel Crozier, who runs the Safran Electrical & Power factory at Villemur-sur-Tarn, near Toulouse, pointing to a rack of aircraft wiring sitting on his factory floor with a label: “Customer order cancelled. To be reallocated”. Mr Crozier explained: “A finished product where the need is no longer there because the company isn’t taking a plane any more.”

Before the pandemic, companies such as Safran Electrical had raced to keep pace with the world’s appetite for air travel. At the start of 2020, waiting times for Airbus’s most popular single-aisle aircraft ran to more than six years. 

“Up to eight or 10 weeks ago they were being driven by the primes [the top manufacturers such as Airbus] and biggest suppliers to increase production. Everything was about buying new machine tools and ordering lots of long lead-time material,” said Mr Williams. “There was a lot of cash going out the door quickly.” 

Almost overnight, that growth turned into dramatic decline. Revenues evaporated at companies making spare parts for the $77bn-a-year maintenance, repair and overhaul market, as two-thirds of the world’s commercial fleet was grounded in the first quarter. 

In April, the world’s two big aircraft makers, Airbus and Boeing, slashed production by between a third and 50 per cent respectively to reflect reduced demand from cash-strapped airlines. Airbus could go further this month when it unveils job cuts, expected to total more than 10,000.

That abrupt U-turn is now ricocheting through Europe’s aerospace supply chain. Companies took advantage of wage support schemes offered in France, Germany and the UK before moving to job cuts. The biggest, such as Rolls-Royce and Meggitt, have announced workforce reductions of 15 per cent or more. Smaller companies such as UK turbine blade manufacturer JJ Churchill have cut the workforce by 40 per cent and will invest in automation. 

“The whole supply chain, from tier one suppliers like us, down to our own suppliers, are going to have to adapt,” said Philippe Petitcolin, chief executive of engine maker and equipment supplier Safran. “The supply chain is going to have to reduce capacity by a minimum of 30 to 40 per cent for the years ahead, not just for a few months.”

While the cheap loans offered by many governments have been welcome, many aerospace companies are not keen to take on more debt. An industry looking at a three to four-year recovery needs “patient capital” designed to fit the recovery cycle, said Paul Everitt, head of ADS.

Equally, each country’s industry knows that competitors will be looking to exploit the crisis to snare a bigger share of the global market. The UK’s share of the global industry has slid in recent years. France, with annual industry revenues of €65.4bn, has overtaken the UK, now at £36bn, while Germany’s industry has caught up fast at €40bn in annual turnover.

In previous crises, the French government has supported industry-led funds to invest in domestic aerospace. Now Marwan Lahoud, another former Airbus executive, is raising a new fund with a target of €1bn from private investors and the industry. The government is expected to put in additional money as part of a multibillion-euro aerospace support package to be launched later this month. 

The aim of the fund is no longer to support SMEs with minority stakes as in previous initiatives, but to take majority positions in promising aerospace suppliers in an attempt to drive consolidation. 

Yet tensions are emerging over how the funds should be used. Some industry investors object to funding the growth of rivals, or of enabling suppliers to build the scale that will allow them to push back on pricing.

“There are a lot of common interests — and also some divergence,” said one person close to the discussions. “It is bloody difficult to do.”

In the UK, questions centre on whether the government would support foreign-owned companies with local sites. In addition, any fund would have to overcome the government’s aversion to a policy that might be seen as “picking winners”.

But in all three countries there are worries that if domestic companies are not strong enough to drive consolidation, local aerospace expertise will be acquired by foreign buyers.

“Investors in the US aerospace business are among the groups who are looking for opportunities in Europe irrespective of Covid,” said Alex Murrill, an investment banker at Baird. “People are seeing opportunity in a crisis.”

The supply chain could be reshaped in other ways, such as transferring orders from the least efficient to the best in class, which in some cases could force the weakest under. 

It is a Darwinian battle, say executives, where only the fittest will survive. “Given the duration [of the crisis] that we expect, we can’t support all the suppliers the whole time. It isn’t possible,” said Mr Petitcolin of Safran.

Big original equipment makers such as Airbus, Safran, GKN and Rolls-Royce have already begun to reallocate orders, or even take work back in-house to minimise the impact of the crisis on their own workforces. 

Warrick Matthews, head of procurement at Rolls-Royce’s civil aerospace division, said his company would seize the chance to accelerate rationalisation of its 700 civil aerospace suppliers. “I want to come out with the highest-performing supply chain both in the UK and globally,” he said. “Will we have fewer higher-performing suppliers coming out of this crisis? Yes, that is my desired state.”

Plus: ‘Humpty Dumpty’ falls to Phillips; virtual drinks at Masterpiece; urban art for new London project

The big-name auction houses may be making great strides online but there is a lot to make up for since the Covid-19 pandemic took its toll on live events. Sale totals worldwide fell 97 per cent at Christie’s, Sotheby’s and Phillips during May, from nearly $2.9bn in 2019 to $93m last month, according to data from Pi-eX. This is the lowest public auction total ever recorded for the month by the database (which tracks from 2007).

“The sharp fall isn’t so surprising given that all but three of May’s auctions were purely online. Historically, online sales from these auction houses have generated less than $2m on average each, compared to $50m from the live evening sales,” says Christine Bourron, chief executive of Pi-eX.

May is normally high season in the art market — Pi-eX finds that 38 live sales were cancelled or postponed during the month this year — and auction specialists hope to make up some of the slack in the traditionally quiet summer season.

Sotheby’s is the latest to reinvent the wheel and will conduct its postponed New York evening auction from London on June 29. The plan is for auctioneer Oliver Barker to field bids through the night via what he describes as a “mission control-style, zero-latency video stream”. Renderings suggest this will be a cross between a life-size Zoom meeting and a video game, which should prove entertaining. Sotheby’s has already announced consignments estimated at more than $200m to the sale.

Phillips is also full steam ahead for its postponed 20th-century and contemporary art evening auction in New York, now planned to take place live on July 2 and with as many staff and clients as the health guidelines permit by then.

Recent consignments include “Humpty Dumpty” (1921), painted by the American artist Maxfield Parrish for the cover of the Easter edition of Life magazine that year (est $400,000-$600,000). The work, a surreal vision of Humpty Dumpty taking tea on a bucolic wall, comes from the Du Pont family in Wilmington, Delaware, a branch of one of American’s wealthiest dynasties. Parrish and Pierre du Pont (1870-1954) were childhood friends and his family bought the work directly from the artist.

Elizabeth Goldberg, who joined Phillips from Sotheby’s last year to boost its American art expertise, says “America’s contribution to 20th-century painting [is perceived as starting] with Jackson Pollock and the other postwar Abstract Expressionists, which shouldn’t be the case.”

Of Parrish, she says, “People recognise his imagery without knowing it’s by him,” noting his parallels with surrealist artists in Europe, particularly René Magritte. Collectors of Parrish include the film director George Lucas, who has said that the artist inspired some of the fantastic landscapes in Star Wars.

There’s been a change of direction for London’s cross-category Masterpiece art fair, whose organisers have now decided to join the fray and go virtual.

“Everybody was piling in online but I needed to think about it to see if we could do something additive — and something that people could enjoy,” says chief executive Lucie Kitchener. As well as running the fair through the Artsy platform (June 24-July 8, with two preview days), her plans include offering private views through the Masterpiece website and Zoom. These could range from an expert talking in depth about one particular discipline to a curator’s highlights tour. “We want it to be more social; we’re encouraging people to grab a glass of wine with five of their friends,” she says.

Pre-recorded videos and live panel discussions with museums including the V&A, the Metropolitan Museum of Art and the Hong Kong Museum of Art will also feature. The fair’s 138 exhibitors have the option to do their own video to introduce their virtual booths and there is no fee to participate. “Contemporary galleries have been a step ahead online, but some of our galleries need this support just now,” Kitchener says.

Masterpiece is majority owned by MCH Group, which also wholly owns Art Basel, one of the first fair franchises impacted by Covid-19 when its Hong Kong edition was cancelled in March. Art Basel’s flagship Swiss fair, due to run in June and then postponed to September, is still an uncertain prospect. An online version of the fair takes place in the meantime, running June 19-26.

“Nothing is stopping me,” says the gallerist Nicole Schoeni as she prepares to move from Hong Kong to London and launch project spaces in both cities before the end of this year. Plans are well under way in Clapham, south-west London, where she has invited 10 urban artists to take over a 6,000 sq ft Victorian house, ahead of its renovation into her family home and a gallery space next year.

The project has not been without its challenges during the Covid-19 crisis. “It’s particularly difficult with urban art, because you ideally want the work made on the spot,” Schoeni says. Only four of the 10 artists involved are based in the UK so while they can go into the property (one at a time), the others are having to think more creatively than usual. For example, the street artist Zoer, who is based in France, had planned to paint directly on the walls but is instead creating digital graffiti for Schoeni’s team to print and paste in the UK. Another participant, Isaac Cordal, primarily makes small sculptures, which can be shipped over from Spain — his latest miniature figures come complete with face masks for Schoeni’s show, which she hopes to open this summer.

Visitor numbers will probably be limited to just two at a time and, Schoeni notes, she may not get to see it herself, given the expected quarantine restrictions in both cities. She describes the London project as a soft launch for a gallery that she plans to open in Hong Kong’s regenerated Wong Chuk Hang area in the Autumn.

Follow @FTLifeArts on Twitter to find out about our latest stories first. Listen to our podcast, Culture Call, where FT editors and special guests discuss life and art in the time of coronavirus. Subscribe on Apple, Spotify, or wherever you listen.

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