Vaccination is the silver bullet

people through movement restrictions and changing behaviours such as social distancing and masking will lower R, the effective rate of reproduction. Let us call this percentage reduction “p”.

We can also slow the spread of the outbreak by reducing the riskiness of infection in each contact between two persons. And it is clear that vaccination of the population achieves this. We will call this percentage reduction “q”.

Mathematically, to reduce R and stop exponential growth of new infections, the combination of the above two fractions, p and q, must be less than or equal to 1/R.

That is, (1 - p) x (1 - q) ≤ 1/R.

In short, q will rise over time as more and more of the population is inoculated. Thus, even when the lockdown is lifted, the left side of the equation must eventually grow smaller and smaller as q approaches 1. It is for this reason that we believe this pandemic will end soon — and why we are bullish and fully invested for our portfolios.

The UK is providing the world with critical knowledge by being ahead in the outbreak in terms of testing and vaccination. And the data is highly optimistic. The country has been reopening gradually and positive cases are rising anew. This is to be expected as it maintains a high level of testing and especially with the more contagious Delta variant.

Critically, the number of deaths has stayed low. This is the clearest evidence yet that the vaccine works — and that the absolute number of positive cases needs careful interpretations! It may not stop people from getting infected — no vaccine offers 100% protection — but it does very effectively lower the risks of severe illness and death (see Chart 4 on Page 17). This is what Malaysia must aim to achieve so that lives and livelihoods can return as close to normal, as soon as possible.

Looking even further ahead, Singapore’s road map in a post- vaccinated world in which the disease is endemic provides additional insights. The country will do away with the daily reporting of Covid-19 cases altogether, as the numbers are no longer relevant, just like the number of people down with the flu is not broadcast daily.

Widespread rapid testing will be carried out in airports, seaports, office buildings, malls, hospitals and educational institutions, for screening purposes. The sick will be sent home. The quality of data gathered will translate into better public healthcare management where variants of concern can be identified quickly, hospitalisation and deaths monitored closely and counteractive measures taken where necessary.

The Global Portfolio gained 1% for the week ended July 14, led by gains from The Walt Disney Co (+6.1%), Taiwan Semiconductor Manufacturing Co (+5.2%) and Apple (+3.2%). On the other hand, shares in Builders FirstSource (-2.5%), Bank of America (-2.2%) and Singapore Airlines (-2.1%) ended the week in the red. Last week’s gains lifted total Global Portfolio returns since inception to 60.7%. This portfolio is outperforming benchmark MSCI World Net Return Index, which is up 54.9% over the same period.

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