The economic effects of Covid-19 have been masked with Government stimulus, Central Bank liquidity injections, policy changes and debt forgiveness or deferral. We note the following:
- Directors obligations diminished: through temporary amendments to the Corporations Act with respect to continuous disclosure (which potentially weakens having an informed market); a six month holiday on laws around insolvent trading; ATO reportedly deferring payment notices to companies.
- Capital raisings hastened: ASX listing rules changed to increase size and speed of raisings.
- RBA liquidity: to cap rates in the bond market and provision of cheap funding to banks.
- Industry:direct support for the property and building industry.
- One off superannuation withdrawals: ~ $15bn.
- JobKeeper:~ 3.5 million workers and $70bn in wages support.
- JobSeeker:~ 1 million people with increased benefits.
- Loan deferrals: ~ $230bn of loan deferrals from both business and households.
- Rent deferrals: residential and commercial tenants.
The above have led to a stock market environment that is currently assuming no lasting effects of the Covid-19 pandemic and instead puts a lot of faith in the above measures to see us through. But many of these measures are slated to come to an end in the fourth quarter of 2020 where we believe the cash flow impacts will manifest for households and business. Despite the implication from rising share prices that all is well, we believe there are some companies that will face cash flow issues.
See attached for the full report.
While the response to climate change risk by regulators, financial institutions and publicly listed companies is welcome, it currently is not enough to ensure a safe climate. This submission provides a comprehensive assessment of the current risks relating to Australia's key export sectors.
It is estimated that 100 pairs of hands touch your clothes before they arrive in your wardrobe. That’s 100 people at risk of modern slavery, poor working conditions, and exploitation. Ethical Partners has recently signed the Investor Statement in Support of the maintenance and expansion of the Bangladesh Accord.
During March 2021 the Fund returned 3.07% versus the S&P/ASX 300 Accumulation Index of 2.30%, outperforming the market by 0.77%. An overweight position in consumer staples and an underweight position in materials contributed to relative performance while an overweight position in financials and an underweight position in consumer discretionary detracted from relative performance. The Fund is +20% over the last six months.
Globally, 15% of the population are persons with disabilities. The labor force participation rate globally for people with disabilities sits at 32.8% compared to 77.1% for those without disabilities. We believe it is imperative that investors use their shareholder voice to raise the awareness of this important diversity issue and help companies to improve their inclusion.