Economic & Political Roundup

Kindly sponsored by Allianz

A collation of recent insights on markets and economies taken from the comments made by chairmen and investment managers of investment companies – have a read and make your own minds up. Please remember that nothing in this note is designed to encourage you to buy or sell any of the companies mentioned.


March 2020 will be remembered as the month covid-19 progressed from mainly disrupting China to the most severe global pandemic in a century.

For stock markets, the problem was compounded by the collapse in the oil price following a falling out between Saudi Arabia and Russia. Bond yields have been quite volatile but most developed world government bond yields have fallen.

 Covid-19 briefings

These exceptional times have compelled many investment companies to release RNS updates on the impact of covid-19 on their business. This month’s roundup has been expanded to integrate these updates, with the date of release also included, given how fast the situation has been changing. Please refer to the attached PDF for a comprehensive version of the commentary.

The usual collation of commentary from full-year and interim results released over the month follows this section. Content from the results section that specifically focuses on covid-19 has been brought forward to this ‘briefings’ section.

wdt_ID Exchange Rate 3/31/2020 Change on month %
1 GBP / USD 1.24 -3.20
2 USD / EUR 0.91 -0.20
3 USD / JPY 107.76 -0.10
4 USD / CHF 0.96 -0.70
5 USD / CNY 7.10 1.50
wdt_ID Indicator 3/31/2020 Change on month %
1 Oil (Brent) 22.76 -54.90
2 Gold 1,622.51 2.30
3 US Tsy 10 yr yield 0.73 -36.80
4 UK Gilt 10 yr yield 0.34 -24.00
5 Bund 10 yr yield -0.50 -18.70

 Biotechnology and healthcare

Paul Major and Brett Darke, managers of BB healthcare – 20 March:

It is vitally important that we all remember this disease has a limited impact on the vast majority of people It appears more lethal than seasonal flu, but we would argue it is currently impossible to say with any confidence how much worse it is due to the patchy nature of testing.”

“One town in Italy (called Vo) tested its entire population in late February and found a 3% positivity rate, with 50% of the positives being asymptomatic. This would imply there are >2.5m cases in the country as a whole.”


James Goldstone, manager of Keystone – 27 March:

“Significant value has now emerged in many shares and attractive investment opportunities exist for those with a long-term horizon”

JPMorgan Smaller Companies – 25 March:

“If, however, the rest of the world does not recover from the covid-19 impact at the rate that China appears to have, then all markets, including the UK, will continue to struggle.”


Polar Capital Global Financials – 31 March:

“Today the banking sector is significantly better capitalised than it was in the years leading to the global financial crisis and regularly stress tested by its regulators to ensure it can withstand significant shocks.


TwentyFour Select Monthly Income – 30 March:

“Forced and indiscriminate has created the opportunity to source assets that have been otherwise unavailable to investors for almost a decade.”

UK Mortgages – 27 March:

“We do not know at this point how future cash flows will be affected by mortgage holidays or other forms of relief that will be offered to distressed borrowers.”

TwentyFour Income – 23 March:

European ABS have lagged behind the volatility seen elsewhere principally as market participants believed that the direct link to fundamental risk in European ABS remained weak.”

Rhys Davies, manager of City Merchants High Yield – 20 March:

“Cash is king and those that can invest are able to name their price.”


AVI Japan Opportunity – 20 March:

“The Japanese system is built on cash for a rainy day.  Japanese cash-rich companies can withstand better than most and will undoubtedly survive the turmoil.”

Baillie Gifford Shin Nippon – 17 March:

“An ageing population coupled with a shrinking workforce would on the face of it, be a huge worry. Japan, however, has been alert to these changing trends for some time now and has embraced what is known as the ‘silver market’ with enthusiasm.”


Ashoka India Equity Investment – 18 March:

In a post-covid-19 environment, Indian manufacturing could be a key beneficiary as the world looks to diversify parts of the supply chain from China.”.


VinaCapital Vietnam Opportunity – 27 March:

“Covid-19 could knock nearly 1% off Vietnam’s GDP growth forecast for this year.”

 Latin America

Ed Kuczma and Sam Vecht, from the management team at BlackRock Latin American – 27 March:

“Our base case is that covid-19 will be under control within the next few months and that China will then launch significant stimulus to reverse the negative impact on the economy.”


Amedeo Air Four Plus – 17 March:

“Almost all airlines globally have been severely impacted by the reduction in passenger traffic.”


International Public Partnerships – 23 March:

“Covid-19 has to date had no impact on the company’s cashflow from its investments.”

3i Infrastructure – 20 March:

“To date, any operational impact has been limited and, currently, all of our portfolio companies are maintaining continuity of service to their customers.”

GCP Infrastructure – 20 March:

“Substantially all of the company’s investments are availability-based infrastructure assets and therefore are not currently expected to be materially impacted by the reduced demand for goods and services.”

 Renewable energy infrastructure

Foresight Solar – 27 March:

“We anticipate that there may be a further short-term reduction in power prices due to an anticipated drop in demand, however power prices are forecast to improve over the medium term.”

Bluefield Solar – 25 March:

“Over 60% of the company’s revenues are regulated and non-correlated to market based power prices, increasing in line with RPI and with an average duration remaining of 15 years. The company has 94% of its revenues contracted until the end of the current financial year”

 Commodities and natural resources

Evy Hambro and Olivia Markham, representing the management team at BlackRock World Mining – 25 March:

“On the demand side, we do not anticipate a hard-landing type event in China and we have been encouraged by stimulus measures beginning to feed through into improvements in some economic data points.”

 Private equity 

ICG Enterprise – 26 March:

“Private equity’s active ownership model allows it to react quickly to issues.”

Oakley Capital Investments – 25 March:

Over 70% of the portfolio companies operate a subscription-based or recurring revenue business model and are therefore less vulnerable to temporary declines in customer demand.

 Insurance and reinsurance

CATCo Reinsurance Opportunities – 23 March:

“While we do not expect any adverse impact on actual investment results, it may be possible that there may be an adverse impact on the company’s progress on its stated intentions to return capital to investors as quickly as possible.”

 Property – debt

Starwood European Real Estate – 20 March:

“In the current market, the company is particularly focused on its exposure to hospitality, which was 31.4 per cent of invested assets as at 31st December 2019, and expects to see a negative impact in operational performance generally across the hospitality sector.”

 Property rest of the world

Macau Property Opportunities – 30 March:

“Visitor arrivals to Macau have declined by 57% year on year (YoY) and gross gaming revenue (GGR) has declined by 50% YoY during the first two months of this year.”

“Macau’s health bureau officials appear cautiously optimistic about Macau infection rates, believing that new imported cases may be peaking,”

 Full version

Click on the link at the bottom of the page to access the full report.

Kindly sponsored by Allianz


 The legal bit

This note was prepared by Marten & Co (which is authorised and regulated by the Financial Conduct Authority).

This note is for information purposes only and is not intended to encourage the reader to deal in the security or securities mentioned within it.

Marten & Co is not authorised to give advice to retail clients. The note does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it.

This note has been compiled from publicly available information. This note is not directed at any person in any jurisdiction where (by reason of that person’s nationality, residence or otherwise) the publication or availability of this note is prohibited.

Accuracy of Content: Whilst Marten & Co uses reasonable efforts to obtain information from sources which we believe to be reliable and to ensure that the information in this note is up to date and accurate, we make no representation or warranty that the information contained in this note is accurate, reliable or complete. The information contained in this note is provided by Marten & Co for personal use and information purposes generally. You are solely liable for any use you may make of this information. The information is inherently subject to change without notice and may become outdated. You, therefore, should verify any information obtained from this note before you use it.

No Advice: Nothing contained in this note constitutes or should be construed to constitute investment, legal, tax or other advice.

No Representation or Warranty: No representation, warranty or guarantee of any kind, express or implied is given by Marten & Co in respect of any information contained on this note.

Exclusion of Liability: To the fullest extent allowed by law, Marten & Co shall not be liable for any direct or indirect losses, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note. In no circumstance shall Marten & Co and its employees have any liability for consequential or special damages.

Governing Law and Jurisdiction: These terms and conditions and all matters connected with them, are governed by the laws of England and Wales and shall be subject to the exclusive jurisdiction of the English courts. If you access this note from outside the UK, you are responsible for ensuring compliance with any local laws relating to access.

No information contained in this note shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction.

Investment Performance Information: Please remember that past performance is not necessarily a guide to the future and that the value of shares and the income from them can go down as well as up. Exchange rates may also cause the value of underlying overseas investments to go down as well as up. Marten & Co may write on companies that use gearing in a number of forms that can increase volatility and, in some cases, to a complete loss of an investment.