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.
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