Home Views Positioning for the recovery

Invest in 'long term winners' and position for power catch-up, says UBS

Lim Hui Jie
Lim Hui Jie12/24/2020 07:00 AM GMT+08  • 8 min read
Invest in 'long term winners' and position for power catch-up, says UBS
UBS expects Asia to do well in the post Covid world, and advises investors to also look toward industrials and cyclicals in 2021.
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How should investors take advantage of the current environment, even as the global economy slowly recovers from the battering of the Covid-19 pandemic? Amid a tumultuous year, 2020 has seen global economies shrink as financial markets plunged. It has also witnessed one of the most contentious US presidential elections in modern history — all happening amid a health crisis not seen since the 1918 Spanish flu outbreak.

In short, the world has seen an unprecedented “synchronised global recession” and the fastest bear market on record. What happened after that was a rebound that remains “bifurcated and divergent”, says Tan Min Lan, Head of UBS’s Asia Pacific Chief Investment Office.

However, with the news of effective vaccines hitting headlines, UBS forecasts that they will reach critical mass come the second quarter next year, and 2021 is going to be characterised as the “year of renewal”. As such, this will enable corporate earnings across most of the major regions globally to recover to pre-pandemic levels by the end of next year, says Tan.

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