coronavirus crisis

Companies that opted to retain their staff and take measures to support their suppliers during the coronavirus market crash have been rewarded for this by institutional investors. According to research by State Street Associates.

All of Luxembourg’s fund community is feeling the impact of the coronavirus crisis, and fund association Alfi is doing its best to offer support. At the same time however, Alfi itself is being hit by the crisis too, as part of its revenue stream partly drying up.

Alfi postponed its flagship European Asset Management Conference, due to take place on 17-18 March this year, to mid-September. There are another dozen or so events on its calendar for this year, some of  which may have to be cancelled depending on the coronavirus situation. 

The earnings season has started in Europe. But it’s a rather strange one. ‘All companies have stopped issuing guidance,’ observes Gilles Guibout, head of European shares at AXA IM. ‘That makes it difficult for bottom-up investors. So more than ever, we need a top-down approach now.’

Equities – down. Fixed income – down. Precious metals – down. Commodities – down. These have been a strange, potentially frightening few weeks for all investors, including private bankers.

The first US earnings results came in published last week. As always, the major banks were first, showing disappointing results and withdrawing guidance for the second quarter. The consequence: analysts look into a black hole of uncertainty. 

The real impact of the corona crisis on private equity valuations has yet to become visible, but it’s already time to look for new direct and co-investments. ‘Past experience has shown that post-crisis years are often good vintage years for new private equity investments,’ says Nils Rode (pictured), CIO of Schroder Adveq, in an interview with Investment Officer.

A study of bear markets shows that in 70 percent of the cases stock markets fell back to a new low. In 30 percent there was a continuing recovery after a severe crash. We are probably experiencing the latter scenario now, according to BNP Paribas Fortis’ chief strategist Philippe Gijsels.

Gijsels says that the bank has been busy buying attractively priced shares and high yield bonds for clients for some time now.