February 12, 2021

What really went down in 2020

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The Money Matters

After the “worst recessions since Great Depression”, markets are looking forward to a global economic recovery. What are the experts saying?

UBS: Long Value over Growth over Defensives. Forecast S&P 500 at 4,100 at end 2021E.

Morgan Stanley Wealth Management: Forecast 10% gain next 12 months, sees opportunity in smaller cap stocks that “have greater sensitivity to what is likely to be a very strong economic recovery, along with financials, consumer services, materials, industrials and cyclical technology stocks”

Locally,

UOB: Sees STI valuation as “not stretched”, 2021 target for STI at 3,180. Overweight Banks, healthcare, plantation, technology and suburban retail and hospitality S-REIT sectors

CIMB: Base case Target for STI for 2021 at 3,068 (Bull at 3,412). Still “bullish on recovery theme but think one should wait for a market breather to reload ammunition.”

January

  1. WHO announced that COVID-19 had emerged in Wuhan, China, and is spreading across the world.
  2. Brexit is officially completed- as UK becomes the first country to leave the European Union, after 47 years of membership

February

  1. Donald Trump was acquitted by the senate for his impeachment

March

  1. Australia bushfire finally ended– the fire which started from Sep 19 to Mar 20, is estimated to have cost Australia’s economy as high as A$5 billion
  2. Stock markets crash around the world- US S&P500 took just 22 trading days to fall 30% from its record high, the fastest drop of this magnitude in history.
  3. Tokyo 2020 Olympics was officially postponed till 2021. As a result of COVID-19, the delay is expected to cost Japan an additional $2.4b, adding to the previous budget of $13b which was already significantly more than originally planned. The delay had caused a surge in extra costs from rebooking venues, transport, to COVID-19 counter measures
  4. SIA to raise $15b with support from Temasek to combat COVID-19 via shares offering and convertible bonds. Temasek had pledged to underwrite all shares and bonds that are not subscribed. SIA had come under pressure as COVID-19 halted air travel. DPM Heng said “SIA is an outstanding airline and a strategic asset for Singapore. Through the Government’s support for the aviation sector, and if necessary more direct support measures, we will make sure that SIA is able to come through this in good shape.”

April

  1. Half of the population was under lockdown with more than 3.9b people in more than 90 countries ordered to stay at home. Singapore announced its circuit breaker starting from 7 April 2020, before progressively easing restrictions from 1 June 20.
  2. US unemployment rate hit a record high of 14.7%, the highest rate and largest over the month increase due to COVID-19.

May

  1. Black live matters- Protests broke out in US in May, after a Black African American was killed due to a white police officer kneeling on his neck for nearly 8 minutes, as other officers looked on and prevented passers-by from intervening. The protests spread to over 60 countries, and continue well into early November, with some believing it helped to boost the anti-Trump vote.

June

  1. Wirecard filed for insolvency – In a shock news to the business world, Wirecard filed for insolvency following an accounting scandal which saw over US$2b missing and the arrest of its CEO. It was the first member of Germany’s blue chip DAX index to fail
  2. China passes controversial HK national security law giving Beijing unprecedented powers over HK. This led to strong responses from overseas which raised concerns that HK’s position as a financial and business hub in Asia may be threatened. US President trump ordered an end to HK’s special status under US law following the passing of the HK national security law.

July

  1. MAS calls on local banks to cap FY20 dividends at 60% of FY19. This came amidst concerns of the banks financial strength amid the uncertain economic climate, as central governments around the world try to ensure local banks’ capital positions are strong to support businesses and economies. In June, US Fed has also capped US banks dividends and suspended their buybacks
  2. Facebook suffered ad boycotts which saw over 1,000 companies participated including Unilever and Coca-Cola. The boycott came after Facebook refused to censor a post containing Donald Trump’s “When the looting starts, the shooting starts” as well as a post by Trump that criticized CHAZ, leading to immense criticism.

August

  1. Singapore reports worst ever quarterly contraction of 13.2% in 2Q20. This was mainly due to the circuit breaker which was implemented from 7 Apr to 1 June.

November

  1. Joe Biden wins US election – In one of the highest voter turnout in more than a century, Joe biden was voted the next president of USA. He will be the oldest president to ever take office at 78 years old. This is the third time Joe Biden has ran for the White House, having done so previously in 1988 and 2008.
  2. ANT IPO abruptly halted- In what could have been the world’s largest IPO valued at more than $300b, ANT Group, the financial arm of Alibaba, saw its listing abruptly pulled by Chinese regulatory authorities, citing “major issues”.
  3. China cracked down on its biggest tech companies in the country as the nation’s biggest tech companies lost nearly $290b in market value in just 2 days (the GDP of Egypt). The selloff came amidst new regulations from Beijing aimed at curbing monopolies in big tech.
  4. Bitcoin hit a new record high, surging above its last peak reached in Dec 17. Cryptocurrencies has been on a roar in 2020, amidst massive stimulative measures by governments around the world, in a bid to support the world economy.

December

  1. First COVID-19 vaccines roll out for Americans after the US FDA approved emergency use for Pfizer’s and Moderna COVID-19 shot. Singapore also got its first shipment of vaccines on 21 Dec 20.
  2. ‘New variant’ of coronavirus found in UK , which PM Boris Johnson said could be “up to 70% more transmissible”
  3. Tesla joined S&P 500 share index- This follows a nearly 700% rise in share price in 2020. Tesla will become the sixth largest member in the S&P 500 share index.
  4. Singapore grant digital bank licenses Grab-Singtel consortium and SEA secured the full digital bank license, while ANT Group and a consortium comprising Greenland Financial Holdings, Linklogis HK and Beijing Co-operative Equity Investment Fund management was granted digital wholesale bank licenses.
  5. mm2 proposes the merger of its cinema business (Cathay Cinemas) with Golden Village. The move will form the biggest cinema operator in Singapore
  6. Robinsons closed its last outlet in Singapore. The iconic 162 year old department store closed its flagship store at The Heeren on 16 Dec 20.

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