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Wealth Investing 2021: Financial Foresight And Investment Tips From Industry Experts

Investing 2021: Financial Foresight And Investment Tips From Industry Experts

Photo taken in Manila, Philippines
Photo taken in Manila, Philippines
By Franz Sorilla IV
By Franz Sorilla IV
December 22, 2020
After the country was hit by recession in Q2 of 2020, financial experts are weathering the storm and chiming in their foresights for a hopeful new year

With the fate of the Philippine economy still dependent on the Covid-19 pandemic situation, the confidence of investors and businesspeople continues to vacillate. As earlier predicted, the economy plunged into a recession last April to June, with 16.5 per cent drop in GDP. Still, some industry experts are positive, seeing silver linings in several sectors that have experienced a growth spurt largely because of the changes in consumer lifestyle.

As we brace ourselves for another year, the big question remains: is it still safe to invest in 2021? Which sectors can we rest our confidence in?

See also: Tatler Heroes: Individuals Around Asia Leading The Fight Against Covid-19

A man disinfects the chairs at SM Cinema in Santa Rosa, Laguna in the Philippines on October 18, 2020.(Photo by Lisa Marie David/NurPhoto via Getty Images)
A man disinfects the chairs at SM Cinema in Santa Rosa, Laguna in the Philippines on October 18, 2020.(Photo by Lisa Marie David/NurPhoto via Getty Images)

Businessman David O Chua, president of Cathay Pacific Steel Corporation and vice chairman of the University of the East, expects a flat growth rate for 2021 as the economy, he believes, will still be recuperating from the months-long lockdown. But he observed some sectors that continued to do brisk business during this crisis. They include the digital sectors (internet and online service providers, fintech firms, last-mile delivery providers), logistics and warehouse companies and telecommunication firms.

See also: Introducing Asia's Most Influential: The Impact List 2020

Young Asian woman with protective face mask holding shopping basket and using smartphone while grocery shopping in a supermarket
Young Asian woman with protective face mask holding shopping basket and using smartphone while grocery shopping in a supermarket
MANILA, PHILIPPINES - MAY 16: A worker is seen wearing a face mask and face shield at a restaurant inside a mall on May 16, 2020 in Quezon city, Metro Manila, Philippines. The Philippine government began easing quarantine measures in many areas of the country, but has extended the lockdowns in Manila and a few other cities until May 31. Manilas lockdown, one of the worlds strictest, will extend to 80 days  longer than the 76-day lockdown of Wuhan, the Chinese city that was the early epicenter of COVID-19. T
MANILA, PHILIPPINES - MAY 16: A worker is seen wearing a face mask and face shield at a restaurant inside a mall on May 16, 2020 in Quezon city, Metro Manila, Philippines. The Philippine government began easing quarantine measures in many areas of the country, but has extended the lockdowns in Manila and a few other cities until May 31. Manilas lockdown, one of the worlds strictest, will extend to 80 days longer than the 76-day lockdown of Wuhan, the Chinese city that was the early epicenter of COVID-19. T

Rick Santos, CEO of Santos Knight Frank, is optimistic that with the continuous partnership of the private sector and the government, the economy would be revitalised. Though badly hit, the tourism, leisure and hospitality industries are seeing an increase in volumes of deals, according to Santos.

See also: New Normal, New Protocols: A Deep Dive Into Metro Manila's Evolving Dining Scene

On sectors projected to rise in 2021, Santos agrees with Chua that the growth of e-commerce is evident and even influences the development of other businesses. He sees a major opportunity in the acquisition of distressed assets brought about by the crisis. Another major player next year, he adds, is the Real Estate Investment Trust companies. Businesses are looking for new sources of capital and REITs pose huge opportunities to democratise real estate and enable more ordinary investors to participate.

See also: The State Of The Philippine Art Scene During The Covid-19 Pandemic

MALAY, PHILIPPINES - SEPTEMBER 30: Travelers wearing face masks and face shields to protect against COVID-19 disembark a plane at Godofredo P. Ramos Airport on September 30, 2020 in Malay, Aklan province, Philippines. The Philippine government has partially reopened the country to domestic travelers in a bid to stimulate the economy and revive a pandemic-hit tourism sector even as coronavirus cases continue to rise. The country surpassed 312,000 cases of COVID-19, with at least 5,504 deaths. (Photo by Ezra
MALAY, PHILIPPINES - SEPTEMBER 30: Travelers wearing face masks and face shields to protect against COVID-19 disembark a plane at Godofredo P. Ramos Airport on September 30, 2020 in Malay, Aklan province, Philippines. The Philippine government has partially reopened the country to domestic travelers in a bid to stimulate the economy and revive a pandemic-hit tourism sector even as coronavirus cases continue to rise. The country surpassed 312,000 cases of COVID-19, with at least 5,504 deaths. (Photo by Ezra
People watch a movie while inside their cars at a drive-in cinema in the province of Pampanga in Philippines on July 31, 2020. The drive-in cinema, with the capacity of about 90 cars, is the first to open in the country.(Photo by Lisa Marie David/NurPhoto via Getty Images)
People watch a movie while inside their cars at a drive-in cinema in the province of Pampanga in Philippines on July 31, 2020. The drive-in cinema, with the capacity of about 90 cars, is the first to open in the country.(Photo by Lisa Marie David/NurPhoto via Getty Images)

Sanjiv Vohra, president and CEO of Security Bank, agrees that the recovery of several sectors hit by the crisis would be gradual. But like Chua, he also sees sectors that show resiliency such as agriculture, utilities and telecommunications. “We have learnt to live with the virus, which allows authorities to continue opening up economic sectors and enhance mobility. The recovery of industries does not solely rely on the availability of a cure or a vaccine,” he says. “We should, however, watch out for the second wave of the virus that could result in a reimposition of lockdowns, curtailing economic recovery efforts.”

See also: Singapore Airlines, Thai Airways, And Cathay Pacific: How Airlines Are Getting Creative During the Pandemic

With strict lockdowns imposed at the early onset of the virus, communities learnt to support local businesses and small to medium enterprises. Peter Faulhaber, HSBC senior vice president and head of wealth and personal banking, believes the potential in supporting local products. HSBC, for one, has its “Together, let’s love local” campaign, which promotes Filipino-made products. “The advocacy to support local industries, and the government’s gradual easing of travel restrictions are very encouraging in slowly bringing the economy back to life,” he says.

See also: Top Philippine Designers Talk About Adaptability And What's In Store For the Fashion Industry

The challenges of 2020 have put our hearts to the test but once more the resilience of the Filipino people came to the fore. “[The crisis] has made significant impacts on the rise of the digital revolution,” says Chua. “Demands for all sorts of online products have increased. Conventions and anecdotal wisdom point to a long-term change to ‘new normal’ consumer buying habits.”

Painting, fabrics and sewing accessories for sewing an anti-virus mask. Zero waste and quarantine concept. Homemade facemask against virus infection in detail. Top view
Painting, fabrics and sewing accessories for sewing an anti-virus mask. Zero waste and quarantine concept. Homemade facemask against virus infection in detail. Top view
Photo Taken In Thailand, Chiang Mai
Photo Taken In Thailand, Chiang Mai

Faulhaber shares some measures they have done in HSBC, like partnering with retail merchants to provide enticing payment schemes and attractive deals for online shopping.

Security Bank, according to Vohra, addresses customer needs while reducing the number of customers in branches through digitisation.

“A greater volume of e-commerce activity results in higher demand for industrial and logistics real estate and services,” Santos says, explaining the domino effect of this phenomenon.

See also: The Catholic Church and Social Media During The Lenten Season and COVID-19 Pandemic

MANILA, PHILIPPINES - MAY 17: Worshippers wearing face masks stand far apart from one another to practice social distancing as they take part in Sunday service at a church on May 17, 2020 in Paranaque, Metro Manila, Philippines. The Philippines on Saturday began relaxing one of the world's longest and strictest lockdowns to curb the spread of the coronavirus. Lockdowns in Metro Manila and a few other provinces have been extended to 80 days, longer than the 76-day lockdown of Wuhan, the Chinese city that was
MANILA, PHILIPPINES - MAY 17: Worshippers wearing face masks stand far apart from one another to practice social distancing as they take part in Sunday service at a church on May 17, 2020 in Paranaque, Metro Manila, Philippines. The Philippines on Saturday began relaxing one of the world's longest and strictest lockdowns to curb the spread of the coronavirus. Lockdowns in Metro Manila and a few other provinces have been extended to 80 days, longer than the 76-day lockdown of Wuhan, the Chinese city that was

When eyeing new investments in 2021, Chua advises considering a business’ resilience during the pandemic, its digital nature to take advantage of ‘new normal’ ways of handling operations, and of course ‘old normal’ benchmarks of manageable leverage and positive cash flow positions.

See also: Shangri-La, Marriott, Marco Polo, and More: How Hotels In Metro Manila Are Adapting To The New Normal

 
Photo taken in Makati City, Philippines
Photo taken in Makati City, Philippines

Santos, meanwhile, stresses the importance of the decentralisation of Metro Manila in favour of other hubs in the country. “When businesses locate in a city, they instigate an ecosystem that generates jobs for locals and business opportunities for small restaurants and suppliers,” Santos explains.

As to real-estate investments, he shares a few pointers: “Remember that good location is always the key. Get a professional property management team to ensure that your investment is secured. Lastly, opportunities are more important than money, and once-in-a-lifetime opportunities will surface in the aftermath of this crisis.”

(RELATED: Facing The New Normal: Steven Tan, Berna Puyat, David O Chua and More Experts Talk About Their Respective Industries)

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