Bouncing back

As the global vaccination roll-out gathers pace, lockdowns will gradually come to an end, business confidence will grow and investors can again find fertile ground for their capital. After a challenging period, green shoots are again emerging.



Vaccination programmes are rolling out around the world and efforts are being made to increase the supply of vaccines, therapeutics and diagnostics in developing countries. Lockdowns are also slowly coming to an end, marking a boost for economies and countries hard hit by the Coronavirus (COVID-19) pandemic.

Of course, as Head of Global Equities, James Cooke outlines in his article there are still a number of ‘what ifs’ on the horizon. From the different technologies behind vaccines such as non-replicating viral vectors like AstraZeneca or the mRNA options used by Pfizer-BioNTech, or the  emergence of new variants and the dearth of local vaccine production facilities in many regions, humankind’s COVID-19 response is still in its infancy. But that doesn’t mean that the positive effects of the vaccine roll-out aren’t already bearing fruit for investors.

With around 15% of the world’s population now fully vaccinated, business optimism has improved to its second-highest level on record, according to June’s JPMorgan Global Composite Purchasing Managers’ Index (PMI). And, with the system awash with liquidity and stimulus, consumption is likely to boost economic activity in key markets such as the United States. While this has implications for global inflation, it also presents us with a case for cautious optimism which, in turn, provides renewed impetus for growth stocks.

While the likes of vaccine makers and biotechnology firms are very much on everyone’s radar at the moment, there are also green shoots emerging around the broader technology sector as well as sectors which benefit from the so-called ‘movement economy’, such as travel bookings, entertainment stocks, airlines, cruises and casinos, as well as hotels. All of these sectors stand to benefit when the vaccinated world reopens in some form and demand for these services are again rekindled.

“Whether an investor is poised to take advantage of these market shifts is very much dependent on the risk appetite of the individual investor.”

Whether an investor is poised to take advantage of these market shifts is very much dependent on the risk appetite of the individual investor. Investment Manager Kathy Davey, in her article looking at the psychology of investing, talks us through this negative bias consideration and warns against using the low interest rate environment as an excuse to leap into risky behaviour. This is definitely an article to absorb and reflect on with respect to your own responses at the moment. 

This has never been more true than when dipping your toe into the unusual and interesting world of cryptocurrencies and crypto assets. Even if you don’t know the difference between a non-fungible token and a dogecoin, our Head of Fixed Income, Albert Botha, will take you by the hand and lead you into a futuristic space that is sure to keep impressing and confusing us all for years to come. 

With so many opportunities on the boil in a world emerging from its
Coronavirus-induced cocoon, now is definitely the time to be investment savvy and have a clear and strategic plan of action. 

Sizwe

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