We would like to thank you for joining us over the past 18 weeks as Kim Catechis and members of the Martin Currie investment team have discussed the far-reaching impacts of COVID-19.
In our final video for the series, Kim Catechis discusses the likely changes in direction that the world will take after COVID-19, and the winners, losers and investment implications.
Do expect geo-political deliberations and priorities to become shapers of investment outcomes.
Hello again. The AFTERMATH has been an exercise in examining the implications for investors of a world-wide pandemic.
Broadly speaking, our findings are that most of those trends that we were following and monitoring closely before, have simply accelerated, but there have been some significant changes.
Supply chains, they're changing from “just in time” to “just in case”, and that has huge implications for working capital requirements, for inventory levels, for design and architecture of these supply chains and also capex planning.
Banks, they have to do national service, it’s been some time, they now have to re-examine their roles in a world where lower rates are here for longer.
Debt levels at a country level and at a corporate level are going to be higher, generally speaking, how does that percolate through?
Another area is government, the role of government. Even in what we considered to be established, mature democracies, we should expect the government to take a bigger role in our lives. There's going to be more legislation, and there's certainly going to be more taxation.
Partly, this is an effect of what's happened in society. Not only has the trust and social compact between populations and their governments been fractured in many cases, but also what COVID-19 has done, it’s proved that it is not an equal opportunities pandemic. It has absolutely exacerbated existing inequalities, and that is going to be a major political issue going forward, perhaps for a generation.
One of the areas that looks like it may come off best out of all of this is climate change. You know, governments that have proved incapable of cooperating over a pandemic may now find themselves on the same page, in the sense that they will understand that this is an opportunity, a once in a lifetime opportunity, to boost their economic growth and go green at the same time. Everyone wins from this, and if we manage to get it through, we’ve seen it happening in Europe, it may happen elsewhere, that would be a great result, for our children, and for our planet.
Finally, do expect geo-political deliberations and priorities to become shapers of investment outcomes. It’s not just the trade wars, it’s about getting leadership and keeping leadership in technology, it’s about setting global standards, it’s about dealing with frustrations from generations past. An asset owner’s geography could end up limiting the opportunity set available to it, in a way that a year ago, we would have considered very far fetched.
Thank you for watching and reading the AFTERMATH, what I would ask from you now is, engage with us, be part of the conversation, I would love to hear your views. Goodbye and stay safe.
Regulatory information and risk warnings
Past performance is not a guide to future returns
This information is issued and approved by Martin Currie Investment Management Limited (‘MCIM’). It does not constitute investment advice. Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested.
The information provided should not be considered a recommendation to purchase or sell any particular strategy / fund / security. It should not be assumed that any of the security transactions discussed here were or will prove to be profitable.
The views expressed are opinions of the named manager as of the date of this document and are subject to change based on market and other conditions and may differ from other portfolio managers or of the firm as a whole. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice.
For institutional investors in the USA:
The information contained within this presentation is for Institutional Investors only who meet the definition of Accredited Investor as defined in Rule 501 of the United States Securities Act of 1933, as amended (‘The 1933 Act’) and the definition of Qualified Purchasers as defined in section 2 (a) (51) (A) of the United States Investment Company Act of 1940, as amended (‘the 1940 Act’). It is not for intended for use by members of the general public.
For wholesale investors in Australia:
Any distribution of this material in Australia is by Martin Currie Australia (‘MCA’). Martin Currie Australia is a division of Legg Mason Asset Management Australia Limited (ABN 76 004 835 849). Legg Mason Asset Management Australia Limited holds an Australian Financial Services Licence (AFSL No. AFSL240827) issued pursuant to the Corporations Act 2001.
The information contained has been complied with considerable care to ensure its accuracy. However, no representation or warranty, express or implied, is made to its accuracy or completeness. Martin Currie has procured any research or analysis contained in this recording for its own use. It is provided to you only incidentally and any opinions expressed are subject to change without notice.