Disruptive change goes hand in hand with a changing world. Apart from assessing the state of play and the outlook, the forum sought to lay the groundwork for solutions and strategies that can make a difference to client portfolios as our analysts and other specialists dissect input from the forum, and the latest trends, and pinpoint opportunities for investors.
Here is a brief overview of the topics and the speakers at our Investment Forum.
There is so much opportunity for investors in China’s markets - Amy Celico
Regulation in Washington and Beijing has been imposing limits on our ability to interact with China, while greater competition on technology is restricting global innovation. However, there are many opportunities outside of the tech sphere, in less regulated areas: healthcare, consumer products, financial services, non-sensitive areas in need of foreign investment. What would help is if China took more action on opening-up rather than just talking about it.
There are many questions that matter for the US outlook - Jason Furman
With the US economy set to slow to trend growth, what can policymakers do? There is some scope for looser monetary policy, but who will be the next chair of the Federal Reserve? Economic and fiscal policy could also play a role, but what are politicians willing to do at a time of already high debt? Given the political constraints, large tax cuts look unlikely. What can we expect from the next administration in terms of regulation of healthcare, energy, finance and tech?
We need smart regulation or we will end up with “rather crazy” policies - Jean Tirole
Regulating (tech) competition needs to be more agile and faster. Issues include common ownership by institutional investors, most favoured nations status, best price guarantees – action is required to keep markets contestable. On climate change, pricing or taxing carbon would be simple and efficient. It will take a lobby for carbon pricing as well as making people aware of the stakes. It is important smart solutions are developed so investors can invest in the right sustainable investing vehicles.
The current basket of policies is not going to limit global warming to 1.5°C - Jane Ambachtsheer
Looking at the concept of the ‘inevitable policy response’ to help the transition to a low-carbon world, these are the takeaways: 1) the electrification of the energy system: by 2030, half of the energy supply will come from renewable sources; 2) by then, 70% of passenger vehicles will be electrical; 3) in terms of land use, we will see the end of deforestation by then. To make sure the Paris Agreement targets are implemented, we will need to see continued policy change.
A freight train is coming… straight at the oil & gas industry - Mark Lewis
After decades of operating without competition, the oil & gas industry will have to rethink its business model since more and more electrical vehicles will use energy from renewable sources. It has just 10-15 years to do so. That is the time it will take the renewable energy industry to scale globally. This will have a devastating impact on the oil & gas industry’s market capitalisation and investment returns – much along the lines of what has already happened to the utilities industry.
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This article appeared in The Intelligence Report - 10 December 2019
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