Facebook: +9.6%

SINGAPORE (June 26): Facebook, the ubiquitous social media giant that owns other popular platforms such as Instagram, messaging system WhatsApp, and virtual reality player Oculus, derives most of its revenue from hosting advertisements on its own platform, Instagram, Messenger, and third-party affiliated websites or mobile applications. As part of the elite FAANG group, which is made up of the five most prominent American technology companies, Facebook is recognised for being at the forefront of innovation and trends in this sphere. Facebook performed decently in our portfolio with a 9.6% return in the past six months and outperformed the other three benchmark indices, the Dow Jones, S&P 500 and MSCI US which lost 9.7%, 5.2% and 4.7% respectively.

Facebook has had a rather mixed impact from Covid-19. Due to lockdown measures implemented by governments, the company reported a significant increase in the size of its user base and user engagement. However, governments and big corporations use Facebook as an alternative way to communicate; private businesses, too, use Facebook to reach out to consumers. Yet, this was offset by a significant reduction in the demand for advertising, as well as the rates that Facebook charges. Facebook also announced in its latest earnings report that it is making its applications more efficient and adding capacity, while also prioritising enhancements in key services such as real-time video experiences and livestreaming of games. This, along with additional investments into its data centre capacity, network infrastructure and office facilities, as well as scaling its headcount to address the pandemic, will drive expense growth for the rest of the year.

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