Covid-19 has, without a doubt, accelerated a host of digital trends – and that is something that we, like most, have been focusing on recently.
Mike Sell, Head of Asian equities, Alquity Investment
“Covid-19 has, without a doubt, accelerated a host of digital trends – and that is something that we, like most, have been focusing on recently,” added Mike Sell, Head of Asian equities, Alquity Investment, but thought it was not the full picture: “Take India for example – every day the Covid-19 headlines are negative. But we must remember that India is on a very different path, and their pause will be a very different kind of pause to what we’ve seen in the West. In fact, India’s rural economy, which is linked to 45% of its GDP, has seen very strong growth – with tractor sales up over 50% and crop sowing up over 10%. So I think there are pockets of what you perhaps call the old traditional economies that are actually doing very well.”
Thomas Wilson, Head of Emerging Markets Equities, Schroders, was in broad agreement with many of the points made by panellists. He did, however, note that “you need to separate the market outlook from the economic outlook. While I do very much see this as a pause in growth, what I would say is that the markets have priced in the reality and where we currently sit is a period of rebalancing.” Reflecting this, he added that while Schroders will remain exposed to some of the key emerging themes, such as ecommerce and technology, from a trading perspective he is “conscious that at some point there could be a meaningful rotation into more depressed areas of the market.”
Arnab Das, Global Market Strategist, Invesco looked at the issue from a more granular perspective – considering how the impact on individual countries would impact economic growth. He explained that “across the world, there has been a mixed bag of responses to the Covid-19 pandemic. Some countries, such as those in North Asia, have handled the crisis well, while others, such as India, Brazil the US and the UK have been less successful in containing the outbreak.” In his view, the message that comes out of this is “one of enormous diversity in responses, and I think this diversity will be reflected in the cyclical and structural stories we are going to see for many years to come”.
In an online poll, the 415-strong audience was asked whether Asia Pacific would be the main engine of global growth in the next five years. The results were interesting and broadly in line with the panellist discussions, with 25% answering “Yes, absolutely” and 39% answering “Yes, but not as robust as in the past five years”. A sizeable 29% of the audience thought that the answer will be contingent on the region’s success in containing Covid-19.