It is difficult to draw many broad conclusions from reporting season due to the wide dispersion and out of date market analyst expectations, the rapid development of the economic landscape and the government support measures, but it is possible to categorise companies into three broad buckets:
1)Companies that are benefitting from rent relief, government stimulus and a short term change of consumer behavior and spending habits (we have been selling exposures to these companies);
2)Companies that are experiencing increased but likely more sustained revenue growth (we are continuing to build positions in these companies);
3) Companies that have recorded lower profit growth now through being conservative in their provisioning but should benefit in future periods (we are maintaining sizeable positions in these companies).
Full report attached
