2020 started with overcast skies as COVID-19 rampaged across the globe, causing economic and social mayhem. Stock markets plunged, on a scale that exceeded that of the Great Depression1. With the longevity of the virus, many countries are experiencing wave after wave of outbreaks. National lockdowns and social distancing are now norms. Many key events have either been postponed, cancelled or transformed into virtual affairs. The 2020 Japan Olympics has been postponed while the US and Singapore forged ahead with elections successfully.
Fortuitously, vaccine development in the last quarter of the year propelled stock markets to new highs. But even as the vaccines are slowly being shipped and administered globally, the virus rages on. The global recovery could, thus, be a long, rocky one.
We compile a list of events in 2021 for investors to watch. We hope this list will help you navigate the post-pandemic economy and make the most rewarding investments.
• January United States Georgia’s run-off elections
Run-off elections for Georgia’s two Senate seats will be held on 5 January2 2021. As neither of Georgia’s Republican senators drew a majority during the presidential election on 3 November 2020, January’s special rematches will determine which party controls the Senate. The results will either swing the Senate majority to the Democrats and hand Joe Biden the power to push through his agenda or leave the Republicans in charge, potentially tripping Biden’s agenda.
Joe Biden will be inaugurated as the 46th president of the United States on 20 January. He will commence his 4-year term with Kamala Harris as his Vice-President. The democratic president will be taking control over the white house and it may usher in a whole new set of political agenda vs the previous administration.
The year’s first Federal Open Market Committee (FOMC) meeting is scheduled to take place on 26-27 January 20213. Rates can be expected to be held low amidst an economic recovery.
Europe/United Kingdom End of transition for Brexit
1 January 2021 will mark the end of the transition phase of Brexit. With the UK scheduled to leave the EU’s single market, two possible outcomes may surface:
1.A UK-EU trade deal comes into force. The UK could begin a new trading relationship with the EU as soon as the transition ends. If a trade deal is reached but with controversies remaining in other areas, the trade deal might still kick into effect, with contingency plans used for other parts of the relationship. 2. No trade deal. If there is no trade deal and no further extension of the transition period, the UK would have to trade on World Trade Organisation terms with the EU. This means that UK goods would be subject to EU tariffs until a new trade deal is negotiated. ECB monetary policy meeting
The first European Central Bank (ECB) meeting on monetary policy is scheduled to take place on 23 January 2021. ECB will release their spending plans and rates policy that investors should take note of.
Appointed in February 2020 as Prime Minister, Muhyiddin Yassin is considering a snap election4 in the first quarter of 2021. The snap election comes after a complex and difficult period for Malaysian politics following a coup in early 2020.
The Malaysian Stock Market was led by glove producers, Top Glove (7113.MY) and Supermax (7106.MY), in 2020, as the sector benefitted from demand for PPE during the pandemic. Investors will likely tread carefully as a snap election could very well affect the Malaysian market. As seen in prior elections, political uncertainty in Malaysia warranted significantly higher stock volatility but is not compensated with significant returns.
Singapore | Global World Economic Forum
A virtual World Economic Forum will be held from 25 to 29 January5 . Due to the pandemic, the annual in-person event has been postponed to May in Singapore. In January when the annual meeting normally convenes, a virtual summit called ‘The Davos Agenda’ will be held. The online forum will see the usual crowd of politicians and business leaders exchange views on how to drive the post-pandemic economy. This event sets the tone which will shape the economic landscape especially when increasing focus is on climate change. Business leaders and politicians will be expected to makes changes to their business practices and political agendas in accordance to the Davos Agenda.
OPEC+ scaling back production cuts
Beginning January 2021, OPEC+ has agreed to scale back previous production cuts and adjust output by 500,000 bpd6 . This is on the back of an improving economy. It will translate to output curbs of 7.2 million bpd early next year from current cuts of 7.7 million bpd. With the increased production, oil prices can expect to get affected but whether the oil prices can be supported will depend on the global economic recovery from the pandemic.
• February Hong Kong
Hong Kong’s 2021/22 budget is expected sometime in February-March 2021. Hong Kong’s economy has turned around from a sharp contraction in the first half of 2020. Pre-2021 budget consultation numbers show a smaller contraction of its economy in 2020, following improvements in the third quarter7. As hopes of normalcy hangs in the air, investors can look out for an overall general recovery for Hong Kong and US-listed companies with weighted voting rights that qualify for HK secondary listings.
Hong Kong’s IPO market had one of its most active years in 2020, with some of the largest – or potentially largest – IPOs from the Ant Group and JD Health (6618). As listing of the Ant Group fell through, investors will be watching out for new listings in 2021.
Singapore is poised to release Budget 2021 in February. Its two main focuses23 are: economic schemes involving rebates and grants to businesses to sustain them; and social schemes to help Singaporeans cope with the economic uncertainties caused by the pandemic.
• March United States
A FOMC meeting is scheduled to take place on 16-17 March 2021. A quarterly summary of economic projections will be released at the meeting.
Europe ECB monetary policy meeting
An ECB monetary policy meeting has been scheduled for 11 March.
Netherlands general election
The Dutch will be electing a new House of Representatives on 17 March. The current cabinet is led by Prime Minister Mark Rutte. His coalition held a narrow majority in both the House of Representatives and Senate at the beginning of his term. After the expulsion of Wybren van Haga, a prominent member of the coalition, the party lost its majority in the House of Representatives. This general election will decide if Mark Rutte stays on. Changes in policy direction or impact on public finances may surface if a new Government is elected and it may disarray the current budget use to finance the COVID-19 support packages.
The 2021 Western Australian State General Election8 is slated to be held on 13 March9. In the State General Election of 201710, the Western Australian Labour Party had won 41 out of the 59 seats in the Legislative Assembly.
Australia has gone through a series of lockdowns due to waves of outbreak of the virus. The lockdowns have successfully reduced the rate of infections on a daily basis. On the other hand, China’s trade pressure on Australia does not bode well for the recovery of its economy.
Sometime in March 2021, China will hold its “Two Sessions”. The first is the annual meeting of the National People’s Congress. The second is the National Committee of Chinese People’s Political Consultative Conference. The previous “Two Sessions”11 were held across two days in May 2020.
In 2021, China is expected to discuss its 14th Five-Year Plan12 for 2021-2025. This Five-Year Plan will set the stage for its next lap of economic and social policies. One of the topics for discussion will be the removal of hard, specific targets for GDP growth as China transits to sustained and healthy growth of its economy.
Singapore will host the IDC’s Asian Financial Services Congress24(AFSC) 2021 on 24-26 March. The agenda will include crisis and recovery analytics, the rise of fintech start-ups and core banking transformation.
• April United States
FOMC meeting on 27-28 April.
ECB monetary policy meeting on 22 April.
• May United Kingdom
Delayed UK local elections are expected to be held on 6 May 2021. The elections were originally scheduled for 7 May 2020 but have been delayed by a year due to COVID-19. Elections for the parliaments and assemblies of Scotland, Wales and London will also be held, the last in conjunction with London’s election for a mayor on the same day. The Johnson government has an 18 months period where it remains accountable at the ballot box. The party has enacted major decisions on handling of COVID-19 pandemic and Brexit where the party’s action will be scrutinise via the votes during the local elections.
The World Economic Forum will convene its special annual meeting on 25-28 May13 in Singapore. This summit will bring together politicians, business leaders and civil activists for the first time since the start of the pandemic, to address the worldwide recovery and solutions to the world’s most pressing problems. This is only the second time the meeting will be held outside Switzerland since it began in 1971 and the first time it will be held in Asia. Singapore was chosen due to the effective handling of the pandemic. This effectiveness have helped Singapore to step out of its depressed economy sooner and embark on the path to recovery.
• June United States
FOMC meeting on 15-16 June, with a quarterly summary of economic projections to be released.
ECB meeting on monetary policy on 10 June.
• July United States
FOMC meeting on 27-28 July.
ECB meeting on monetary policy on 22 July.
1. Taiwan is expected to release its Central Budget Plan for 2022 in July 2021. In mid-2020, Taiwan had passed a central government plan14 for 2021. This projected a fall in government revenue due to the pandemic. Tightening of rules on mortgages led to decline in the property sector and raw material stocks. Investors can look towards the Technology sector, Semiconductor stocks in particular as the economy is poised to recover in 2021.
• August Malaysia
Sarawak will hold state elections on or before 7 August 2021 for the election of its 19th State Legislative Assembly. The collapse of Pakatan Harapan in February 2020 had led to a political crisis and subsequent establishment of the Perikatan Nasional government. All 82 seats of the Sarawak state will be up for election. As Malaysia look toward economic recovery, investors can look out for healthcare, rubber gloves sectors post COVID-29.
The 2020 Summer Olympics has been postponed to 2021 due to COVID-19.
Japan plans to hold the event15 from 23 July to early August 2021. Ex-Prime Minister Shinzo Abe had increased Japan’s spending on infrastructure in recent years, in hopes of boosting Japan’s tourism during this event. The games will be held after a review of stringent coronavirus countermeasures at end-2020.
When Japan hosted Olympics for the first time in 1964, it benefitted immensely from the boost in tourism and became the world’s second-biggest economy. It was a turning point for the country in the post-war period.
Will this upcoming Olympics be another game-changer for Japan? Will it rescue Japan from its years of deflation and economic stagnation?
• September United States/China Expiry of tariff exemption by China
China’s tariff exemption for 16 US imports is set to expire on 16 September16. This deadline had already been extended by a year. We can expect one of two courses of action by China: 1) a further extension of the exemption; or 2) new tariffs on the 16 products. The decision will partly depend on Biden’s handling of US-China relations.
FOMC meeting on 21-22 September, with the release of a quarterly summary of economic projections.
Apple’s iPhone release
The unveiling of Apple’s iPhone every year is a marquee event for the world’s largest company. If the launch is capable of captivating iPhone fans, we can expect deliveries of iPhones to spike. In recent years however, the launch of the iPhone has seen a diminished trend of importance to Apple due to dwindling global demands for iPhone. This may be partly due to Apple’s shift to services and the production of more gadgets to complement its products. All this may reverse in 2021 as Apple capitalises on 5G by rolling out a powerful 5G iPhone.
Europe ECB monetary policy meeting
ECB meeting on monetary policy on 9 September.
Germany’s federal elections
Germany’s 2021 federal election is expected to be held on 26 September. Look out for a potential shift in power to the left, which could mean higher business taxes to fund social security. Heightened political polarisation would create policy uncertainties which could affect the country’s ability to anchor stability in Europe.
The United Nations will convene its 76th General Assembly on 14-30 September17. Expect debates on climate issues, international peace and security as well as criticism of its efficacy as an international organisation to tackle issues effectively. Joe Biden will attend as the new US President and investors will be keen to follow his rhetoric – whether he brings along his own brand or inherits his predecessor’s.
• October Japan
Japan will hold general elections on or before 22 October18.
Ex-Prime Minister Shinzo Abe had resigned abruptly in August 2020 due to ailing health19. He was Japan’s longest serving prime minister and was succeeded by Suga Yoshihide. Abe’s sudden resignation necessitates this snap election which is untimely, as resources could be better used tackling the pandemic and salvaging its already-battered economy.
ECB meeting on monetary policy on 28 October.
The 16th G20 summit is scheduled to take place on 30-31 October20. G20 is attended by the leaders of 20 of the world’s major advanced and emerging economies21, to discuss economic cooperation. The 2021 summit is expected to focus on recovery from the pandemic.
• November United States FOMC meeting
FOMC meeting on 2-3 November.
The annual Black Friday shopping event will fall on 26 November. The 2021 event will signal whether traditional brick-and-mortar retailers hold their sway or confirm a lasting consumer shift to e-commerce. The sales numbers of the two distinct channels can be compared meaningfully with the pandemic-stricken 2020, with the results bearing implications for sectors ranging from retail to REITs.
The annual United Nations climate change conference will take place on 1-12 November. The 2020 conference was postponed due to the pandemic22. As outlined in the Paris Agreement in 2015, each country under the ‘ratchet mechanism’ is expected to submit enhanced nationally determined contributions every five years, to mitigate climate change. This year’s forum would be the first iteration of the ratchet mechanism. The U.S. is expected to re-join the Paris Agreement under Joe Biden, after Donald Trump pulled the country out of the agreement. The re-joining of the Agreement may stress the traditional energy industry in particular when strict adherence to protocol such as curb on carbon emission is expected to take place.
• December United States
FOMC meeting on 14-15 December, with the release of a quarterly summary of economic projections.
ECB meeting on monetary policy on 16 December.
With the global economy set to recover from the pandemic, markets may rally to new highs. Investors should, nevertheless, pay attention to the events highlighted above as they might introduce volatility to markets.
As we put the pandemic behind us, the world will likely again focus on trade relations. All eyes will be on how Joe Biden sets about curbing the threat of China. These trade developments are expected to set the general direction of the global economy.
We do not base our recommendations entirely on the above quantitative return bands. We consider qualitative factors like (but not limited to) a stock`s risk reward profile, market sentiment, recent rate of share price appreciation, presence or absence of stock price catalysts, and speculative undertones surrounding the stock, before making our final recommendation
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