3Q19 Outlook: A Changing World
At the start of this year, after a bruising 4Q18, we stood out to say this was not a start of a bear market. Rather, we said it was a “tug of war” between the bulls and the bears – and that this would result in a wide-ranging, volatile market. The markets then rallied hard in 1Q, and at the start of 2Q we argued that unless we saw a comprehensive trade deal, we would not see new highs. This roadmap has played out as said.
Where do we go from here?
While we continue to see this as a “tug of war” market, there are game-changing trends to capitalise on. This quarter, we title our publication “A Changing World”.
Today, we see old business models unravelling and new secular themes emerging. For example, negative interest rates, the pervasiveness of e-Commerce, the ongoing trade war, and the Sustainability agenda will have profound implications on investing. As a result of these changes, a large chunk of the world’s equity capitalisation is under siege. We first saw e-Commerce disrupting retail. Now these new technologies are disrupting the media, telecom, auto, and financial sectors.
For sure, risks abound from these changes, but there are also exciting opportunities. Should we cringe and hold cash? With near-zero rates, this surely is not going to work.
Our call is to engage markets through long-term, multi-asset, and globally-oriented portfolios. The underlying strategy is to “barbell”: This entails stripping away sectors that are under siege from disruption and buying into companies plugged into secular growth themes, alongside holding income-generating assets.
In this issue, we detail exciting trends in cloud computing, automation, the New Defensives, and the Sustainability agenda.
Do enjoy the read!
Hou Wey Fook, CFA
Chief Investment Officer
Click here to read the full 3Q19 Outlook report.
Click here to watch the 3Q19 Outlook video.
This information herein is published by DBS Bank Ltd. (“DBS Bank”) and is for information only. This publication is intended for DBS Bank and its subsidiaries or affiliates (collectively “DBS”) and clients to whom it has been delivered and may not be reproduced, transmitted or communicated to any other person without the prior written permission of DBS Bank.
This publication is not and does not constitute or form part of any offer, recommendation, invitation or solicitation to you to subscribe to or to enter into any transaction as described, nor is it calculated to invite or permit the making of offers to the public to subscribe to or enter into any transaction for cash or other consideration and should not be viewed as such.
The information herein may be incomplete or condensed and it may not include a number of terms and provisions nor does it identify or define all or any of the risks associated to any actual transaction. Any terms, conditions and opinions contained herein may have been obtained from various sources and neither DBS nor any of their respective directors or employees (collectively the “DBS Group”) make any warranty, expressed or implied, as to its accuracy or completeness and thus assume no responsibility of it. The information herein may be subject to further revision, verification and updating and DBS Group undertakes no responsibility thereof.
All figures and amounts stated are for illustration purposes only and shall not bind DBS Group. This publication does not have regard to the specific investment objectives, financial situation or particular needs of any specific person. Before entering into any transaction to purchase any product mentioned in this publication, you should take steps to ensure that you understand the transaction and has made an independent assessment of the appropriateness of the transaction in light of your own objectives and circumstances. In particular, you should read all the relevant documentation pertaining to the product and may wish to seek advice from a financial or other professional adviser or make such independent investigations as you consider necessary or appropriate for such purposes. If you choose not to do so, you should consider carefully whether any product mentioned in this publication is suitable for you. DBS Group does not act as an adviser and assumes no fiduciary responsibility or liability for any consequences, financial or otherwise, arising from any arrangement or entrance into any transaction in reliance on the information contained herein. In order to build your own independent analysis of any transaction and its consequences, you should consult your own independent financial, accounting, tax, legal or other competent professional advisors as you deem appropriate to ensure that any assessment you make is suitable for you in light of your own financial, accounting, tax, and legal constraints and objectives without relying in any way on DBS Group or any position which DBS Group might have expressed in this document or orally to you in the discussion.
If this publication has been distributed by electronic transmission, such as e-mail, then such transmission cannot be guaranteed to be secure or error-free as information could be intercepted, corrupted, lost, destroyed, arrive late or incomplete, or contain viruses. The sender therefore does not accept liability for any errors or omissions in the contents of the Information, which may arise as a result of electronic transmission. If verification is required, please request for a hard-copy version.
This publication is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.
Singapore: This publication is distributed by DBS Bank Ltd (Company Regn. No. 196800306E) ("DBS") which is an Exempt Financial Adviser as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore (the "MAS").