Investment sanity checks as Covid-19 fears take over

THE Covid-19 fear has finally become official. For the longest time, global financial markets remained an oasis of calm despite the escalating virus outbreak situation in Asia. This alluded to the common perception that the outbreak remained largely an Asia-centric affair. But the calm has since given way to fear, with news of rising infections in other parts of the developed world, such as Italy and South Korea.

Barring the outbreak becoming a global pandemic, I do not expect the negative impact on financial markets to be long-lasting. Governments in Asia have stepped up their response to counter the impact on trade and sectors such as tourism. For instance, the People's Bank of China has injected more than US$200 billion into money markets and lowered its interest rates on reverse repurchase agreements.

Our analysis has shown that most investors, including long term pension, insurance, endowment and sovereign wealth funds, have in the past years missed out on this 12-year-old bull market.