Page 8 - Sainsbury Strategy and Invetsment Recommendations
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Overall
• Coronavirus containment policies have destroyed economic growth in the near term. The containment policies will be
lifted slowly, whereby significant testing, contact tracing, a treatment plan, and hospital preparedness are critical.
• Significant government and central bank support is trying to counter the negatives caused by containment. The critical
question is has enough damage been done that is more permanent or takes longer to recover from, ie. has something
permanently changed.
• At this stage, we don’t have any guidance on corporate earnings. We also don’t know who how much debt and equity
each company will need to raise to get through this period, and there will be some who don’t make it.
• What we can say is that there is likely more pain ahead given the economic ramifications of the virus, containment,
reinfection rates and policies, and potential changes to way of life.
• Opportunities right now exist in Global Equities unhedged, corporate credit, and infrastructure.
• Potential concern remains for listed property, whilst we’re unsure at this stage how emerging markets will cope with
the virus.
• The key right now is to be very selective, ensure diversification across and within asset classes, and try to
minimise portfolio changes.
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