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New COVID-19 Variant of Concern: Omicron, Explained

Editor, TRANSFIN.
Nov 27, 2021 3:26 PM 5 min read
Editorial

It’s déjà vu we could have happily done without.

Yesterday, the WHO designated B.1.1.529 - named after the Greek letter "Omicron" - as a COVID-19 variant of concern (VOC).

The variant has alarmed public health experts due to its “very unusual constellations of mutations”. Because this incarnation of SARS-CoV-2 has so many changes - many of them novel - there are fears about increased transmissibility, immune system evasion, and possible resistance against vaccines.

Omicron was first detected in Botswana on November 9th 2021. Since then, it has also been reported in neighbouring South Africa, Belgium, Hong Kong and Israel. 

The WHO’s announcement yesterday was followed by the reimposition of travel restrictions by many countries. Expectedly, investors hit the panic button. Friday’s market bloodbath was swift, brutal, and reminiscent of April 2021 (when the Second Wave was raging) and March 2020 (in the early days of the pandemic, five centuries ago).

Viruses and Mutations

Viruses mutate all the time. Most of these “copying errors” (aka genetic mutations) are harmless i.e. They don’t substantially change the structure of the virus. But if a virus continues to spread unabated, the probability of the pathogen developing more lethal mutations increases.

And lethal mutations can be really bad. Just look at Delta, which caused India’s devastating Second Wave and is currently the world-leading variant.

The WHO regularly monitors emerging new variants and classifies them as variants under investigation (VUI) and, should the mutations be significant, variants of interest (VOI). VOC are those whose features are likely to make them more dangerous and infectious than previous coronavirus iterations.

 

How Dangerous is Omicron?

The Network for Genomics Surveillance in South Africa (NGS-SA) has said that some of B.1.1.529’s alterations were earlier identified in the Alpha, Delta and Lambda variants; however, there are many that have "rarely [been] observed until now and not well characterised”.

Some of these mutations reportedly enable Omicron to replicate faster and enter the body's cells more easily. The latter pertains to the at least 30 mutations in the region that encodes the spike protein, which is of particular concern since this is the part of the virus that vaccines are designed to target. Any drastic changes in structure of the spike protein - which the virus uses to gain entry into human cells - could render existing vaccines futile.

FYI: The new VOC has been detected in nearly 90% of cases in South Africa’s Gauteng province, where the test positivity rate has risen from under 1% to 30% in only three weeks.

It is likely to take a few more weeks before scientists can definitively ascertain vaccines' effectiveness against Omicron. If early studies can be trusted, the new variant could make vaccines 40% less effective. Again, this figure isn’t peer-reviewed or conclusive: a more reliable picture will emerge in the coming weeks.

For now, there are fewer than 100 whole-genome sequences available. The WHO has implored countries to submit complete genome sequences and associated metadata to a publicly available database, such as GISAID, at the earliest. Studies commenced on Tuesday to analyse Omicron's immune escape potential in a laboratory setting. South Africa has also established a real-time system to monitor hospitalisations.

Speaking of which, the country has seen a worrying jump in cases over the past month, coinciding with the discovery of B.1.1.529:

New COVID-19 Variant of Concern: Omicron, Explained 

And the proportion of Omicron genomes has skyrocketed at a pace faster than even Delta’s:

New COVID-19 Variant of Concern: Omicron, Explained

As we await more information from the WHO, it’s important to remember that, whatever you do...

 

Don’t Panic!

Indian markets - already bruised by the RIL-Aramco divorce and Paytm's scarring debut - ended this trading week the same way they began it: deep in the red. They suffered their biggest crash in seven months with ₹7.36Lcr ($98bn) wiped out and VIX levels surging 25%.

Sensex and Nifty ended Friday down -1,688 pts (-2.87%) and -510 pts (-2.91%) respectively. Predictably, travel, leisure and aviation stocks were badly hit even as pharma shares climbed up. FPIs offloaded domestic stocks to the tune of ₹2,300cr ($306.4m) and benchmark 10-year yields fell to 6.33%.

Global markets were likewise roiled. US Treasury yields dipped while the Dow and S&P 500 had their worst Black Friday in seven decades. Asian markets were similarly down in the dumps. Meanwhile, safe haven currencies like the Dollar, Yen and Franc surged and gold, the traditional safe haven asset, traded in the green.

Moreover, to add fuel to fire, the Omicron news comes at a tepid time for international markets. Brent crude, which yesterday suffered its largest daily drop since April 2020, was already in uncertain territory ahead of an OPEC meeting next week to potentially ramp up production. (Which seem less likely to happen now with potential headwinds to rising demand, something that won’t go down well with importers some of whom released their Strategic Petroleum Reserves this week to protest sky-high prices.)

Bitcoin and other cryptos, which have been plunging since yesterday, were already on edge due to a possible outright ban on private digital coins in India, which has a vast cryptocurrency market.

And not to forget the worsening COVID situation in Europe, where many countries have announced fresh restrictions or full-fledged lockdowns to curb a recent spike in cases. Concerns about the Fed rolling back its stimulus programme and persisting fears about inflation have further darkened the horizon.

 

What’s Happening Now?

Travel restrictions have already been announced by the EU, US and UK, among others, on visitors from South Africa, Botswana, Zimbabwe, Namibia, Lesotho, Eswatini, Mozambique and Malawi.

Back home, the Prime Minister chaired a high-level meeting today to discuss the VOC and preventive measures. The Ministry of Health has directed airports to conduct “rigorous screening and testing of all international travellers” coming from or transiting through South Africa, Hong Kong and Botswana, and to track-and-trace the contacts of these travellers. An all-out travel ban, however, has not been announced (yet).

FYI: After a 21-month ban, international commercial flights to and from India will resume from December 15th.

For India, the stakes are naturally very high. The Second Wave - enabled by political overconfidence and popular carelessness - pushed the health system over the brink and made ominous dystopias of our cities and towns. A potential Third Wave could be equally devastating. Furthermore, the many favorable conditions that drove investors’ “flight from China” to India seem to be reversing as the latter’s markets run out of fuel and the IPO boom seemingly recedes.

One difference this time around are vaccines. But even though India’s vaccination drive has picked up pace after initial hiccups, it has slowed over recent weeks. And with less than a third of the adult population fully vaccinated, we still have a long way to go. Economic recovery is on the tenterhooks and inflation is looming.

Letting our guard down against a vaccine-resistant avatar of COVID-19 at would take the country back to square one. And at this critical juncture, that may be akin to going to a point of no return.

FIN.
 

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