Weekly Thoughts 08 May 2020

One of my live asset manager presentations I dialled into this week, was to listen to a Director from Ninety One (ex-Investec). This particular guy is always entertaining and informative, always talking from a global economic and political point of view. An indication of his popularity is that there were somewhere around 3000 of us dialled in from around the country.

I thought to list a few points he made. These were all in context when he was talking at the time.

From his global round the world tour:

  • Consumers will drive growth
  • Spending will be cautious, savings will increase
  • Companies will hire less, become more efficient
  • Recovery in the 2nd half of 2020, going through 2021
  • This is not a global financial crisis, like in 2008. That was a banking collapse. This is a consumer problem.

His South African comments:

  • SA has some significant economic policy mandates in place
  • Opposition to supporting failing SOE’s is now gone
  • We’re in good hands
  • Business and govt are working well together
  • The sentiment is that the lockdown will cause more deaths than the virus will
  • Consumers will be more selective in future
  • Fast food will trigger up quickly
  • Pleasure industry will kick up quickly – hair, nails, spas
  • Many good companies have very strong balance sheets and will last through a crisis
  • Markets are telling us that we will be fine