KUALA LUMPUR: The year 2020 has been an eventful year that saw some of the toughest social, economic and political challenges in recent times.
While stabilisation of markets seems to be within reach with the introduction of Covid-19 vaccines and new leadership in the United States, investors should expect the process to be gradual and long as the structural changes caused by the pandemic will take time to reverse if not already permanently shifted, says Manulife Investment Management in its regional outlook for the year ahead.
“One of the most critical features of the Covid-19 recession globally is that it more disproportionately hits the services side of the economy and it was much less painful for the manufacturing side, ” said Manulife Investment Management global chief economist, Frances Donald.
“We refer to this as the K-shape recovery going into 2021, of which sectors that provide the essentials during the pandemic such as manufacturing and technology will continue to grow, while those more driven by the demand and supply dynamics such as retail and services may continue on a downward slope.”
According to a statement, with the roll out of Covid-19 vaccines, reopening of borders and normalisation of economies in Asia seem to be within reach.
Manulife Investment Management chief investment officer, equities, Asia (ex-Japan), Ronald Chan believes staying invested and diversified will continue to benefit investors in 2021, as the expected sector rotation in Asian equities will present a wider opportunity set for capturing alpha.
Negative yields in developed market bonds have made it more challenging for bond and income-focused investors, particularly in a lower-for-longer interest rate environment. Attention is now drawn to Asian bonds which not only offer positive yields but also higher quality investment opportunities.
Manulife Investment Management is the global wealth and asset management segment of Manulife Financial Corp. — Bernama