VALENCIA, Spain, April 1, 2020 /PRNewswire/ -- Spanish ESG asset management firm NAO SAM continues to weather the crisis caused by the COVID-19 within its studied sector strategy and the entry into companies with low debt.
NAO, chaired by Pablo Serratosa and led by Pablo Cano, has significant representation in companies in the recycling, technology and alternative energy and sustainability sectors, which together with positions in distribution, food and pharmaceutical companies are allowing their negative growth to be below the sector average.
Pablo Cano, points out that the current crisis caused by the COVID-19, "Is temporary, but it is not comparable to recent crises. The economic slowdown can be compared to that of a war, but with a dangerous added component, corporate debt, from which the fund has always wanted to escape and that will lead us to an unprecedented transformation of the world."
The fund's investments have always avoided those companies with a certain level of debt and, "This strategic initiative is what allows us to have positive prospects for recovery because we believe that companies with healthy balance sheets will emerge stronger from the crisis," Cano states.
In NAO's opinion, there is currently an impact on the demand for consumer goods, where the population has stopped consuming, and companies are delaying their investment decisions. At the same time, supply has also come to a standstill due to the closure of the vast majority of the productive sector, causing a credit shock between the two, "generating the most intense drop in history, not even in the 1929 crisis had it taken so little time to fall by 20%," says Cano.
Looking to the future, changes can be perceived in different aspects. Thus, the implementation of telework will lead to a boost in the digitalization of society and a reorientation of the working models, in those sectors that allow it, to the achievement of objectives and not to the accounting of present working hours, which will result in productivity, less need for office space and greater reconciliation of family life.
It will also be demonstrated that it will be obligatory to reorder companies' supply chains, betting on a greater geographical diversification, a certain deglobalization, allowing many supply chains to return to the West and a clear boom in 3D printing.
In this sense, Cano also points out "a possible change in the world leaders, with China at the head and with the growth of countries like South Korea that has been the only one to face the situation correctly thanks to the efficient use of technology. Europe is collapsing, and the US is facing the crisis with many difficulties, due to the lack of social protection and public health, which may lead to a return to the debate on a universal basic income".
Finally, financial markets will assume a scenario where liquidity, credit and equities will have been highly affected. "The fiscal deficits that will be generated and the balance sheets of the central banks will cause very low-interest rates to continue. For their part, political decisions will be more important than they have been up to now, without ruling out intervention or nationalization of large companies and a tax increase that will affect the rate of growth," believes Cano.
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