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Anonymous
With the current "Twin Storms" of the oil prices and the COVID-19 situation, how are we thinking about the market?
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Kenneth Lou
12 Mar 2020
Co-founder at Seedly
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The Only Thing To Fear Is Fear Itself
If you look at this simple breakdown, you can actually feel it at present day - mid March 2020. It is very real.
Here's a quick summary I found on a DBS research paper:
The COVID-19 situation in China has improved tremendously over the past month even as more countries are affected.
STI earnings are slashed by 6.3% and 5.6% for FY20F and FY21F respectively, leading to almost zero growth for STI this year.
Equity researchers identify the five phases (fear, anger, relief/acceptance and finally recovery) of COVID-19 experience and the sector outperformers/underperformers.
Equity researchers believe that China has started its recovery phase, where sector outperformers are manufacturing and domestic demand (F&B and retail).
Singapore is at the relief/acceptance phase, and its sector outperformers are telecom and domestic demand (F&B and retail).
In terms of a simple strategy, they advocate a Two Pronged approach:
COVID-19 resilience list - Stocks that are resilient to the supply chain disruption, sharp drop in consumer discretionary spending and impact of travel restrictions.
China’s COVID-19 recovery and Singapore malls’ footfall recovery.
Read the full report here.