Coronavirus | 21 April, 2020

The world after COVID-19

Raúl Rendon Portfolio Manager

The expectation of global synchronised growth, that was gaining traction at the beginning of the year, has been removed by the COVID-19 pandemic, which has led various authorities worldwide to impose extreme measures to mitigate the impact of the virus.

It seems that the world has changed in just a couple of months and it is reasonable to expect that the way we go about our daily routine will also change. It will change in our consumption patterns, the way we go about our work, in the forms of entertainment we choose, in the way we live together in groups, how we plan our holidays and, of course, we can also expect regulatory changes that may affect various industries’ business models.

It is difficult to talk about the market due to the severity of the pandemic, however, the experience we are living through reaffirms some of our main ideas, such as investing in technology.

Technology has been one of the main protagonists in this period of crisis

  • At the moment it is not at all unusual to teach classes remotely (Teams or Slack)
  • Taking part in office videoconferences from home (Hangouts)
  • Use webinars as a way of presenting ideas (you probably had access to the webinars that our bank presented recently in our youtube channel)
  • to communicate by WhatsApp with family and friends separated by quarantine.

This situation that has led to an accelerated demand for apps and/or communication systems that allow online contact, which, in the case of Skype and Webex, saw their use quadruple at the end of March.

The world of leisure also reflects and reaffirms our approach in the technology sector

Not only due to the increase in traffic on Netflix or YouTube (which had to lower the resolution of their programmes so as not to saturate the internet networks) and the rapid increase in subscribers on platforms like Disney+ but also in the gaming world. Here, there are two particular news stories of note. Firstly, that the demand for the Nintendo Switch was so high that the console completely sold out in some countries; and secondly, the news, just five days ago, that Formula 1 is to replace its postponed races in Bahrain and Vietnam with the F1 Esports Virtual Grand Prix Series; inviting drivers, celebrities and Esports tournament competitors to take part.

Technology and health go hand in hand

The methods used to try and contain the pandemic have also involved intensive use of technology, for example, Germany’s public health authority, the Robert Koch Institute, urged people to download a smartwatch app to monitor the pandemic. The app has the ability to monitor bedtimes, pulse and body temperature and determine if someone has a respiratory infection.

Apple and Google have teamed up to add technology to their smartphone platforms that will alert users if they have had contact with anyone who has the COVID-19 virus. This contact-tracing technology would have the capacity to monitor a third of the world’s population and would seek to contain the spread by telling the user that they may need to go into quarantine if they have been in contact with an infected person.

The efforts are titanic, and even NASA has joined the fight against the pandemic by launching a project called for scientists to propose rapid response and novel research alternatives through its Nasa@work platform.

Technology is disruptive

We have mentioned just a couple of examples that today seem to be new ways of behaving in the social, family and work arenas, among others; though it is likely that there will be changes to everything we do in the next few months (years?).

  • How will we start to interact in our daily lives?
  • Will we replace our computer/tablet more often?
  • Will we seek to have greater internet capacity? Will there be a boom in online shopping?
  • Will we buy groceries through a digital platform with home delivery?
  • How will our diet change?
  • Will we exercise more so as not to fall into the vulnerable group?
  • Will we switch to smartwatches to monitor our health? Will medical consultations become virtual?
  • Will we prefer watching movies at home rather than going to the cinema?
  • Will we socialise in large groups or will we tend to the meet up in smaller numbers?
  • What will interpersonal relationships be like (especially among the younger generations)?
  • Will we book our holidays in crowded places? And what safety/security measures will we need to follow to be able to take them?

There are more questions than answers, but what does seem reasonable to assume is that technology will continue to be a cornerstone in generating innovative measures that allow us to adapt to a changing world.

Once again, we urge you to contact your advisor who will be able to design strategies and products that best suit your investment profile and that capture this trend that we believe will persist in the long term.