Will business, investing ever return to normal after the coronavirus pandemic changed everything?
- Pandemic likely to cause ‘radical shifts’ in how businesses operate, and how consumers behave going forward, analysts and strategists say
- Further pressure on globalisation likely as the world adapts to changed outlook
The global economy is teetering on the brink of a historically deep recession as tens of millions of people find themselves out of work and hundreds of millions more are trapped at home as major cities from New York to Singapore implement strict measures to try to control the coronavirus pandemic.
The resulting strain on businesses spawned wild gesticulations in financial markets – the S&P 500 plummeted as much as 34 per cent from its all-time high set nearly two months ago – and left many investors unsure where to put their money.
Even if markets rally sharply when containment measures are lifted, the world may never be the same, requiring investors to rethink their bets on the future and companies to reconsider their business models, analysts and investment strategists said.
Companies with strong balance sheets and the ability to leverage larger economic trends, such as the introduction of 5G telecommunications, remain key, but investors need to be prepared for a dramatically different landscape when things return to normal, according to Eli Lee, the head of investment strategy at Bank of Singapore. There may be “radical shifts” in a variety of industries as the world changes how it works or consumes entertainment, he said.
“What we are doing is subjecting a major part of the global population to a completely different lifestyle. If we do this for a few months, folks are going to get used to it,” Lee said. “Depending on how long these containment measures are in place, is it long enough that economic prospects for some companies that are at risk today may continue to be irreversibly changed over the longer term.”