With Corona Survival Tips June 2 18:08
All emergency declarations have been lifted, and the "with corona era" of living with the new coronavirus begins. What will our working style, business, and economy look like in response to the "new everyday life"? And what do companies need to survive? The fumbling continues. What do the investment professionals who are investing a huge amount of money analyze the business activities of the world in detail and are thinking now? There may be a hint to survive the With Corona. That's why I headed for coverage. (Tomoyuki Mineta, Reporter, Ministry of Economic Affairs)
A group that moves 700 trillion yen
I visited Mr. Tsuyoshi Fukushima, the Japanese investment manager of Black Rock, the world's largest asset management company.
Black Rock has been entrusted with the management of pension funds around the world, and has been operating a huge amount of 700 trillion yen. If we exchange opinions with individual companies and if no improvement is observed, we may make no decisions about the appointment of directors at a general meeting of shareholders. Their investment policy has a great influence on corporate management.
Fukushima has been involved in financial markets for over 30 years. The financial crisis in Japan, the collapse of the IT bubble, and the Lehman shock, with the collapse of major financial institutions such as Yamaichi Securities and Hokkaido Takushoku Bank. I have been in crisis many times. Mr. Fukushima said that the corona shock this time is different from any past crisis.
Black Rock Japan Takeshi Fukushima CIO
“I have experienced various things such as September 11 (Terrorist attacks on the United States), Lehman shock, March 11 (Great East Japan Earthquake), but I have never artificially stopped the economy. Very abnormal Not only stocks but also government bonds that were originally bought as safe assets, and even gold were sold. Hedge fund cancellations were sold one after another. It was just a crisis avoidance.”
Confusion since the Great Depression
With the globalization of the economy, the speed of corona spread far exceeded the expectations of the market, and the world was forced to restrict the movement of people and business activities on a global scale. The financial market panicked in March as it had never been experienced.
The New York Stock Market has been hit several times by Dow's average stock price over $1,000 a day, dropping $2997 on March 16th. The Tokyo stock market also plunged into a record stock price that surpassed Black Monday for a week in the middle of March.
Even Mr. Fukushima, who has been training for hundred battles, was in a situation that made him want to look away.
Takeshi Fukushima CIO
"The operation results shown on my computer deteriorated at a considerable speed. It was such a situation that I wanted to turn off the screen or felt sick."
The market is turning around and recovering
The governments and central banks responded to the market turmoil that was said to have surpassed the Lehman Shock, and launched an unprecedented scale of fiscal mobilization and financing.
The United States, which has the highest number of infected people in the world, has settled down the financial markets for the time being, as it has put together economic measures of 2 trillion dollars (200 trillion yen scale), which is close to 10% of GDP.
On the contrary, a large amount of money supplied from the central banks of the world flows into commodities markets such as stocks, bonds and gold, and in New York, the stock index of the NASDAQ market will return to the highest level ever. Many point out that the financial market is a easing bubble.
Financial and economic realities far apart
Fukushima points out that there is a big gap between the movements of financial markets and the actual state of the economy.
Takeshi Fukushima, CIO
“Financial markets have responded positively to the news of “resumption” of economic activity, partly because they have been over-sold panicked by gross pessimism. However, they are cautious about the future of the global economy. I think that the view will gradually strengthen and the gap between the financial market and the real economy will be filled.
The actual state of the economy. It is from now on that strict indicators will come out. For the time being, there are many expectations that it will be a record drop.
Prepare for L-shaped recovery
After June, there are some expectations that the production and consumption will be back at a stretch and V-shaped recovery, but Mr. Fukushima sees it as an "L-shaped" that will remain flat for a while after the depression.
Takeshi Fukushima CIO
"Personal consumption is different before and after the spread of infection. Social distance is important for a while. For example, concerts and travel will not be possible as before. Even if production recovers, people's actions will be careful. As a result, personal consumption is sluggish and it is difficult to recover the V shape. It will be a very gradual recovery like the L shape.”
In addition, he points out the risk that the economy will fall, without being restricted by the "L-shape". The United States and China are in conflict with each other over the source of the new coronavirus and the initial response to prevent infection.
Takeshi Fukushima CIO
“The “US-China conflict” has become a bad smell. In the future, if tariffs are to be applied again, it will become more difficult for the world economy to recover and the growth potential will be restrained. Be careful of the risk of a very low potential growth rate.''
Tips for surviving with Corona
The world has begun to resume economic activity while being alert to the second and third wave of the virus. However, Mr. Fukushima believes that the "new everyday" world economy will not be able to return to its existing extension for the time being.
So what kind of company are you planning to invest in in the post-Corona era? In that question, I added the keyword "responsiveness to change." He explained how the company responded when it announced its financial results.
Takeshi Fukushima CIO
"There are a number of companies that do not give out the forecast for the current fiscal year because the timing of corona convergence cannot be predicted, but I think we must show the forecast and management vision even if we make certain assumptions or hypotheses. There is a big difference between companies that can do this and those that can't.''
In a period of dramatic change like this, it means investing to wait for the outcome or whether there is leadership that moves quickly with direction.
Now that the lifestyle and business environment are changing drastically, companies that are able to go ahead with “selection and concentration” and “rebuilding the management system” that have been issues for many years are attractive investment destinations.
Can you change like an amoeba?
Takeshi Fukushima CIO
“Consumer sentiment will change. There will be less traffic between countries. I hate dense areas. I need to change my business model. If I continue, I will continue to do my business. It is important to change like an amoeba. In order to increase corporate value, if we do not fight together in strong fields such as selection and concentration and M & A (acquisition of companies), survival will be difficult."
“Japanese companies have the ability to improve goods and services. We should also improve “management” = management. We have introduced a system to hire new graduates throughout the year if there are good people Better, there are very strong companies that can be put into action with a sense of speed."
Most people didn't expect a virus to put so much brakes on the global economy. Black Rock also lost 100 trillion yen this time due to the turmoil in the market, and it is now looking for "response to change".
It is difficult to predict exactly what the world of With Corona and Post-Corona will be, but Fukushima points out that it is also an opportunity to create a strong company that responds well to change. I would like to take a detailed look at the movements of companies looking for future strategies.
Tomoyuki Mineta, Reporter, Ministry of Economics
Joined in 2009
After working at Toyama and Nagoya stations,
currently in charge of the financial industry