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Coronavirus in Context

7 February 2020

We look past the headlines to provide investors perspective on the coronavirus’ impact on economies and asset classes.

Economics:

By: Paul Hsaio, Economist, Hong Kong

Coronavirus Outbreak: Strong Short-Term Headwinds for China and the Rest of Asia, But Long-Term Fundamentals Endure

Despite the significant human toll and economic disruption resulting from the coronavirus, we still expect the longer-term fundamentals to persist over the intermediate horizon.

Multi-Asset:

Investment Strategy Insights

With Coronavirus, Are Markets Fearing Fear Itself?

Coronavirus fears are dominating headlines, but it’s important for investors to put the virus’ likely economic impact into perspective. If past is prologue – admittedly a big “if” – the effects on the economy and markets may well prove short-lived.

Fixed Income:

Fixed Income Asset Allocation Insights

Investors Mull Coronavirus Fears and Trade Questions

Improving fundamentals and a strong technical environment should support spread assets despite deteriorating valuations and risks to global growth. We’re maintaining our fixed income allocations while watching how coronavirus fears, trade questions, and slowing wage growth affect markets.

By: Arthur Lau, Co-Head of EM Fixed Income, Head of Asia ex Japan Fixed Income, Hong Kong

Asian Bonds Should Remain Resilient Despite Short-term Coronavirus Setback

We expect bond supply to pick up once the public health issue stabilizes, with full-year supply estimates largely unchanged.

Equities:

By: Siddartha Singh, Investment Director, Asia Equities, Hong Kong

Coronavirus Sell-off Makes Asian Equity Valuations Attractive

A disruptive event and resulting headlines are not in themselves what’s most important – valuations are.