The collapse of stock prices in Europe and the United States

European stock markets closed lower quotes. The index for Western Europe’s STOXX Europe 600 fell more than 4%, German DAX — 2,8%, France’s CAC 40 4.6%, British FTSE — by almost 4%.

Key indices of the new York stock exchange fell sharply on fears of market participants about the second wave of the coronavirus. The Dow Jones industrial lost more than 7% —the worst day in the last three months. The S&P 500 index that includes 500 largest companies, has fallen by almost 6%. The index e of the Nasdaq fell more than 2%. Most reduced quotes airlines, cruise companies and turoperatov and energy sector. Market analysts said that investor sentiment was influenced by data on the growth of new cases of infection with coronavirus in Florida, Texas and California. Before the Federal reserve said that economic recovery will be long and even in the case of the second wave of the epidemic to re-enter the quarantine can not. Last week for unemployment benefits to the unemployment office asked another 1.5 million people, despite evidence that the number of jobs in the country in may rose by 2.5 million According to the forecasts of the fed, U.S. GDP this year will fall by 6.5%, the unemployment rate will reach 9.3%, now the figure stands at around 13.3%.

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Asian exchanges start to lose

Tokyo The Asian equity markets started on Friday with losses. This is due to doubts about progress in the development of medicines to treat Covid-19, traders said. It had previously become known that the antiviral drug Remedesivier from the US manufacturer Gilead had not helped seriously ill patients in a first clinical study.

Investors were looking for something that could end the pandemic, said Tim Ghriskey, chief investment strategist at New York’s Inverness Counsel. “Any bad news is likely to mess up the market,” he said. “Investors want an appearance of hope that they will soon be able to get out of their homes and continue with some kind of normal life.”

The Tokyo stock exchange was initially weaker on Friday. The Nikkei index, which comprises 225 values, was 0.9 percent lower at 19,262 points. The broader Topix index fell by 0.6 percent and stood at 1417 points.

The Shanghai stock exchange was down 0.7 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.6 percent. The MSCI index for Asian stocks outside of Japan rose 0.4 percent.

In Asian currency trading, the dollar gained 0.1 percent to 107.66 yen and rose 0.2 percent to 7.0803 yuan. The Swiss currency was 0.1 percent higher at 0.9765 francs. At the same time, the euro remained almost unchanged at $ 1.0773 and rose 0.1 percent to CHF 1.0522. The pound sterling gained 0.1 percent to $ 1.2354.

Economy Minister: Economic pact pushes Japan’s economy by 4.4 percent

In Japan, the Minister for Economic Affairs is optimistic about the new stimulus package. The package of the Japanese government in the fight against the consequences of the corona crisis is to push the economy strongly. It will increase gross domestic product by around 4.4 percent, said Yasutoshi Nishimura on Friday.

The government had raised the stimulus package to a record $ 1.1 trillion. This is intended to expand cash payments to citizens, for example. The coronavirus pandemic threatens to plunge the world’s third largest economy after the United States and China into recession.

In China, the country’s central bank cut another of its key interest rates. The interest rate for medium-term loans will fall to 2.95 from 3.15 percent, as announced on Friday in Beijing.

Commercial bank loans mature after one year, but can be extended to another two years. The central bank had recently turned the interest rate screw several times to boost the Chinese economy with cheaper money. This contracted by 6.8 percent in the first quarter due to the Corona crisis. This was the first minus since the beginning of the quarterly statistics in 1992.

More: Read all current developments regarding the corona pandemic here.

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Asian investors have doubts about the rapid end of the corona crisis

Tokyo

A passer-by in front of a display board of the Tokyo Stock Exchange.

(Photo: AP)

Tokyo Doubts about the rapid development of a corona drug and sobering economic data from the United States put the mood of Asian investors at the end of the week.

In Tokyo, the 225-strong Nikkei index was 0.9 percent lower at 19,262 points in the trade. On a weekly basis, it is 3.2 percent in the red.

Meanwhile, Japanese Minister of Economy Yasutoshi Nishimura is nevertheless optimistic about the government’s new stimulus package. The package in the fight against the consequences of the corona crisis should push the economy strongly. It will increase gross domestic product by about 4.4 percent, said Nishimura on Friday.

The government had raised the stimulus package to a record $ 1.1 trillion. This is intended to expand cash payments to citizens, for example. The coronavirus pandemic threatens to plunge the world’s third largest economy after the United States and China into recession.

Disappointing test results weigh on markets

The courses also fell in China. A report on disappointing test results for the US company’s Remdesivir drug depressed sentiment Gilead in a study in China to treat Covid-19. Gilead said that the study was terminated prematurely due to a lack of participants and was therefore not statistically meaningful.

The fact that reports of corona drugs triggered such strong market movements is an indication of how much investors are looking for signs when the crisis is over, said Tim Ghriskey, chief strategist at Inverness Counsel. “Any bad news should shake the market.”

The country’s Chinese central bank has meanwhile cut another of its key interest rates. The interest rate for medium-term loans will be reduced to 2.95 from 3.15 percent, she said in Beijing on Friday.

Commercial bank loans mature after one year, but can be extended to another two years. The central bank had recently turned the interest rate screw several times to boost the Chinese economy with cheaper money. This contracted by 6.8 percent in the first quarter due to the Corona crisis. This was the first minus since the beginning of the quarterly statistics in 1992.

The pandemic is causing the global economy to collapse. Business activity in the USA fell to a record low in April, and things look bleak in Asia and Europe as well.

In Germany, the Ifo index will be presented in the morning, experts are also expecting a slump here. To keep the US economy alive, the US House of Representatives gave the go-ahead on Thursday for another $ 484 billion aid program. US President Donald Trump said it was possible that the distance rules would have to be extended until the summer.

More: Read all current developments regarding the corona pandemic here.

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Hope for stimulus packages boost Asian stock markets

Tokyo

Reflections on a display board of the Tokyo Stock Exchange.

(Photo: AFP)

Washington / Sydney Asian equity markets rose on Thursday. The combination of a recovery in crude oil prices from historic lows and the promise of further US government aid to cushion the coronavirus-affected economy calmed investors’ concerns. The U.S. House of Representatives is expected to launch a fourth coronavirus package on Thursday, which has already been unanimously approved by Congress. The rescue package would total almost three trillion dollars. Analysts therefore believe that after the price falls, the low point has been reached.

Still, the recent recovery has been tightly focused on the big tech companies, said Seema Shah, chief strategist at Principal Global Investors. However, Shah believes market positioning could now drive markets upwards, supported by solid political momentum around the world. “Investors have built sensible cash positions that indicate that senseless selling has ended, but that investors have enough funds to take advantage of attractively valued risk assets.”

Look at the indices:

The Tokyo stock exchange was initially stronger on Thursday. The Nikkei index, comprising 225 values, was 0.7 percent higher over the course of the year at 19,266 points. The broader Topix index rose by 0.5 percent and stood at 1414 points.

The Shanghai stock exchange remained unchanged. The index of the most important companies in Shanghai and Shenzhen lost 0.1 percent. The MSCI index for Asian stocks outside of Japan rose 0.9 percent.

In Asian currency trading, the dollar remained almost unchanged at 107.76 yen and stagnated at 7.0842 yuan. On the Swiss currency, it was 0.1 percent higher at 0.9723 francs. At the same time, the euro fell 0.1 percent to $ 1.0808 and hardly changed at CHF 1.0511. The pound stagnated at $ 1.2330.

More: Read all current developments regarding the corona pandemic here.

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Asian stocks fall second consecutive day after US crude oil slumps

Tokyo

A passer-by in front of a display board of the Tokyo Stock Exchange.

(Photo: AFP)

Washington / Tokyo Asian equity markets fell to a two-week low on Wednesday. The drop in crude oil prices gives an idea of ​​the impact of business restrictions due to the corona pandemic: earlier this week, the US futures contract plummeted in May for the first time in history.

In addition to massive oversupply concerns, analysts say, the slump also underscores the technical constraints the market is facing in responding to such shocks. “The negative price was probably an anomaly, but it was also a symptom of major underlying issues that the industry needs to address,” said Arij van Berkel, who heads Lux Research’s energy research team in Amsterdam. It shows that despite the diverse product portfolio in the oil industry, the ability of the industry to switch between markets is “extremely limited”. The fall in oil prices has triggered new caution towards the stock market.

“Overnight stocks of companies that were seen as winners in the ‘post-corona world’ fell like Amazon. This is a worrying sign, ”added Naoya Oshikubo, manager at Sumitomo Mitsui Trust Asset Management. The online giant’s shares fell 2.7 percent on Tuesday.

Look at the indices:

The Tokyo stock exchange was initially weaker on Wednesday. The 225-value Nikkei index was 1.2 percent lower at 19,050 points. The broader Topix index fell by 0.5 percent and stood at 1409 points.

The Shanghai stock exchange was down 0.2 percent. The index of the most important companies in Shanghai and Shenzhen lost 0.1 percent. The MSCI index for Asian stocks outside Japan fell 2.5 percent.

In Asian currency trading, the dollar remained almost unchanged at 107.73 yen, falling 0.1 percent to 7.0833 yuan. The Swiss currency was 0.1 percent higher at 0.9702 francs. At the same time, the euro fell 0.1 percent to $ 1.0847 and hardly changed at CHF 1.0527. The pound sterling lost 0.1 percent to $ 1.2284.

More: Read all current developments regarding the corona pandemic here.

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Stock exchange: Investors should remain cautious

Bill Ackman

The star investor may be pursuing a daring strategy.


(Photo: Reuters)

For activist investor Bill Ackman, the thing is clear: now is the right time to invest. While considering the possible effects of the corona crisis, he temporarily considered selling his entire equity portfolio for the first time to be on the safe side, but then decided to do so: he largely hedged his investments and thereby made billions of dollars.

Ackman has already got back into business strongly with the profits won: in shares such as Berkshire Hathaway from star investor Warren Buffet or at Starbucks.

Was it maybe too early for that? The markets are currently hoping that the worst may already be over. But that seems unrealistic. We still don’t know how severe the effects of the crisis are that have yet to be fully received in the real economy. The number of people infected with corona is still increasing day by day.

This applies not only to Germany and Europe, but above all to the USA. And let’s face it: the massive, unprecedented aid from the states themselves and the central banks may mitigate the worst consequences of the corona crisis, but nothing more. In addition, there are no short-time working rules in Germany, which provide some relief, in the USA.

The exchanges are currently showing a pattern typical of a bear market as we experience it. After a deep fall of over 30 percent at times, the recovery follows. This was also the case temporarily in 2009 in the wake of the financial crisis. Massive fluctuations can be observed again and again in difficult phases.

However, the low is often only reached months later, especially when the effects become clearer. In any case, the analysts have not yet corrected companies’ profits as much as it should. This will also have to be reflected in lower ratings later.

In any case, stocks become less attractive. The dividend as a long postulated new interest rate will be cut in many cases. Experts assume 25 percent or more. Private investors should therefore continue to exercise caution and refrain from investing.

More: Investors should use market recoveries for sale.

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DAX outlook: Exchange experts expect further price falls

By agreeing with Opec-plus, the global oil industry, economies, and other oil-dependent industries could avoid a very deep crisis, said Daniel Yergin of information service provider IHS Markit. “It prevents stockpiling, which takes pressure off prices when normalcy returns – whenever that will be.”

The wide-ranging restrictions on public life in many countries are having an impact on the economy, and the oil price has dropped 50-60 percent this year. “We do not expect a sustained recovery in the oil price until tense demand is eased again in the third quarter,” said Harry Tchilinguirian of BNP Paribas. These are not good signs for the German stock index (Dax), which will start trading again on Tuesday.

Last week’s market developments seemed to be fueled by the hope that the worst of the corona crisis would soon be behind us. Won on weekly view the Dax almost eleven percent, which is the most since November 2008 – on Thursday alone it was 2.2 percent. However, optimism cannot be determined from the economic indicators.

The latest bad news in short: The mood of the US consumer continues to collapse in view of the virus. The consumer confidence barometer in April fell to 71 points from 89.1 points in March, the University of Michigan said Thursday. This is the lowest level since December 2011. At the same time, the level of initial jobless claims in the US remains awesome, at 6.6 million a week through April 4.

Federal Reserve steers against the crisis

Federal Reserve chief Jerome Powell even warns that the US economy will sink into mass unemployment. For Thomas Gitzel, chief economist of the VP Banken Group, it is clear: “The decline in social product in the second quarter will break negative records.” Economists understand social product as the goods and services produced in an economy.

However, like all other central banks around the world, the US Federal Reserve is doing everything it can to at least mitigate the consequences of the slump. With additional emergency aid of over $ 2.3 trillion, the Fed wants to support the small and medium-sized companies in the United States that have been hit hard by the crisis.

The states are also generous in Europe. With aid programs worth more than 1.5 trillion euros, they are fighting the effects of the corona crisis on the economy. In order to finance the debts raised, “states will try to keep interest rates extremely low for years to come,” says Daniel Kerbach, chief investor at Merck Finck.

So far, the stock markets have shown behavior typical of bear markets. A deep fall was followed by a clear countermovement. “But as we know from historical crises, the phase of initially disoriented fluctuations in the capital markets can drag on over a long period of time,” says Daniel Schär from Weberbank. In the financial crisis, violent price drops and strong countermovements had alternated for half a year in close succession.

The market low was only reached after five months. Therefore, the market expert is only assuming an intermediate step in the current recovery of the stock markets. In the past, the phases were twelve to 60 months. It took so long to overcome such a serious crisis.

Profits could plunge 50 percent

The effects can also be seen in the yields. “This year, corporate earnings in the German Dax share index could plunge 50 percent and more, more than in previous recessions, when earnings fell by an average of 35 percent,” feared Christian Kahler, chief strategist at DZ Bank. After previous recessions, the price peak in the Dax was only reached again after four years.

Corporate earnings would have recovered faster. In DZ Bank’s view, this means that the companies in the Dax would earn as much in 2022/23 as they did in the record year of 2018. “The index itself would not reach its old high of 13,800 points until 2024,” judges Bald.

The number of corporations that cut, cut or postpone dividends due to the crisis is increasing every day. “Especially in the Dax, this will leave its mark, since in addition to subscription rights, dividend payments are also included in the price,” says Ulrich Stephan, chief investment strategist for private and corporate customers at German bank. According to him, exchange-traded futures contracts on the dividends of the Euro Stoxx 50 index indicate that the market does not expect a rapid recovery in payments, even for the largest European companies.

Derivatives on dividends, which will not be paid until 2022, have also fallen by 47 percent at the top. In the current year, a 25 to 30 percent drop in distributions in the Dax is expected.

Look into the next week

For Robert Greil, chief strategist at Merck Finck, what will probably be the most noticeable economic news in the coming week will be the number of new US jobless claims on Thursday reported for the week ending April 11. In America, retail sales and industrial production are also due in March next Wednesday. The Fed’s “Beige Book” also gives an impression of the state of the US economy.

There is little important economic data in Europe. This includes the result of industrial production for the euro area in February on Thursday. However, the corona pandemic is not expected to have a significant impact until March.

Things are getting more exciting in China. On Friday, the gross domestic product is due in the first quarter, which has been badly affected by the corona virus. In addition, industry figures for March will be published, which will provide information on the pace of normalization in the Middle Kingdom.

Despite all the existing uncertainty, Christian Kahler from DZ Bank judges: “Anyone who buys shares during the coming quarters should achieve good long-term investment results.”

More on the subject:

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Wall Street, Japan’s major aid program, and Samsung support Asian markets

Tokyo Tuesday has started with three pieces of good news for Asia’s investors: The American Dow Jones index rose by 7.7 percent on Monday, the Japanese government almost doubled the amount of its planned aid program against the corona crisis to almost 20 percent of economic output and South Korea’s electronics company Samsung outperformed market expectations in the first quarter in its first balance sheet estimate despite the pandemic.

After that, the exchanges in Asia’s major financial markets started the day with profits. Japan’s Nikkei 225 index climbed again 1.3 percent to 18,808.53 points after a four percent increase on Monday through lunch break. South Korea’s Kospi made a strong start and was still 0.4 percent above the previous day’s rate.

Hong Kong’s Hangseng Index had so far increased by 0.5 percent, Singapore’s Straits-Times Index even by 1.7 percent. China’s Shanghai Composite Index also took the upswing after a three-day weekend, trading 1.5 percent above Friday’s closing price.

Japan is increasing its aid program

The biggest surprise came from Japan’s Prime Minister Shinzo Abe. As a pain reliever against the emergency, which he will proclaim on Tuesday evening in Tokyo, Osaka and five other important prefectures, he increased the planned emergency program from 60 to 108 trillion yen (920 billion euros). This corresponds to almost 20 percent of the gross domestic product (GDP).

The increase was cautiously received positively. Jesper Koll, an advisor to the investment firm WisdomTree, said: “This confirms that the Abe team is totally determined to turn the inevitable recession into a depression.”

Yoshito Hori, a leading venture capitalist and founder of the private Globis University, also called the scope “pretty reassuring”, but with one caveat: Japan’s already high debt of around 240 percent of GDP. “In the short term, the program is a plus, but on the other hand, there is still concern about increasing the budget deficit and thus the bill for future generations.”

However, the composition of the program and the amount of new debt is still not entirely clear. According to initial reports, direct government spending is 39 trillion yen, a third of the program. In addition, the state will grant companies and people in need discounts on tax payments and possibly social security contributions.

An important part of the program will be direct payments of 300,000 yen each to poorer households. Restaurants and other small businesses whose sales are slumping can hope for support of up to two million yen (17,000 euros), self-employed people up to one million yen. In addition, wage subsidies will be increased for companies that keep their staff in crisis.

Economist Koll expects the central bank to step in for financing. In the record budget for the fiscal year that has been running since April, the issue of new government bonds (JGBs) amounting to 33 trillion yen (280 billion euros) is already planned. Even if a third of the program were to be financed with new debt, Koll said the expenditure would double. And this would “with high probability accelerate the Bank of Japan’s JGB purchase program like a turbo,” says Koll. “Japan’s fiscal and monetary policies work together to lay the foundation for a V-shaped recovery in 2021.”

Samsung continues to benefit from its chip business

In South Korea, the electronics manufacturer Samsung has meanwhile proven its exceptional position. Although South Korea’s economy is also hard hit by the corona crisis, the company improved its earnings in the first quarter. In its usual first balance sheet estimate, the company stated that in the first quarter, revenue increased five percent year over year to 55 trillion won (41.7 billion euros) and operating profit by 2.7 to 6.4 trillion won (4, 9 billion euros).

The profit forecast was even slightly above the market consensus. According to analysts, the reason for the stable result is that higher prices for memory chips compensated for losses in mobile devices. Samsung is not only the world market leader in smartphones, but also in memory chips, with which the company currently generates around two thirds of its profits. And they could be a winner of the corona crisis.

Because with the global calls for home work and social distance, the data traffic and thus the demand for data servers increases. Samsung’s share price has since risen by more than three percent. At lunchtime it was still 49,300 won, 1.3 percent above the previous day’s closing price.

More: Read all current developments regarding the corona pandemic here.

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Investors shake off the end of the special routes in Japan and Singapore

Coronavirus – Tokyo Stock Exchange

The investors in Tokyo are infected by the optimism from the USA.


(Photo: dpa)

Tokyo In Asia, even Singapore and Japan’s departure from their special pathways in the coronavirus pandemic cannot frighten investors. After Singapore announced tightening exit restrictions and closings on Friday and Japan announced the emergency for the metropolises of Tokyo and Osaka on Monday, share prices nevertheless rose across the board.

In Japan, the Nikkei 225 index briefly skyrocketed by more than three percent. Because investors had expected last week that Japan’s Prime Minister Shinzo Abe would declare an emergency. The Nikkei then went for lunch with 18,249.57 points, 2.4 percent.

In Singapore, the Straits-Times index rose meanwhile by more than one percent. Korea’s Kospi index even rose by 1.9 percent shortly after eleven o’clock, the Australian All Ordinaries by 2.8 percent. In China, the stock exchanges are closed due to a public holiday.

Hope for change in New York, expected terror in Asia

As a reason for relief, observers cited the news from the United States that deaths in New York had dropped for the first time. And in Asia, government moves in Japan and Singapore seem to have been priced in – at least for this moment.

The Japanese business newspaper Nikkei ruled that investors were still worried about the economic downturn. “But it is unlikely that this will be a reason for a sell-off, since it will not stop the movement of essential facilities such as supermarkets and stock exchanges.” The measures are likely to exacerbate the economic situation in Singapore and Japan for a short time.

State of emergency in Japan

In Japan, the state of emergency with Tokyo and Osaka will hit the two largest metropolises of millions. The government plans to declare a state of emergency to curb the rapid rise in Covid 19 diseases in the two densely populated megacities. There, the local governments have already asked the populations and companies not to leave their homes or close shops without good reason. But as soon as the state of emergency is declared, governments can also demand it (but without being able to punish for violations). Economists therefore expect that even more citizens and companies will respond to the appeals than they do now – with growing negative consequences for the economy.

An evaluation of the “Citymapper Mobility Index” service showed that citizens’ mobility had temporarily dropped between nine percent and 13 percent of normal value in the middle of last week. These are roughly Berlin values. In Madrid, however, it was only two percent.

As a result, Goldman Sachs Japan economists warned that a month-long emergency in the Tokyo metropolitan area could shrink Japan’s economy by a further 0.7 percentage points in the baseline scenario. In this case, gross domestic product in the current quarter could fall by 10.6 percentage points over the year.

The slump in the simulation rises to 20 percentage points if an emergency is declared in the entire greater Tokyo area with the neighboring prefectures Kanagawa, Chiba and Saitama. After all, the government announced on Tuesday that it would adopt an emergency program amounting to around ten percent of its gross domestic product. In addition to direct payments to low-income families, it also includes direct payments and loans to companies and the self-employed.

Singapore is tightening the restrictions

In Singapore, residents were used to greater freedom than Japan. Even the schools were open. But the number of infections, the origin of which the authorities can no longer understand, is also increasing there. As of Tuesday, all companies that are not considered essential must send their employees home. Schools and kindergartens will also be closed from Wednesday. For example, the government wants to stifle an explosion of Covid-19 infections before it really starts.

More: Read all current developments regarding the corona pandemic here.

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Minus of Wall Street causes losses on Asia’s stock exchanges

The Australian All Ordinaries slipped the most. At 10:10 a.m. local time, it was trading 3.5 percent below the previous day and then only recovered slightly to values ​​between minus two to three percent. Trump’s changing rhetoric hurts optimistic stock traders, said Michael McCarthy, chief strategist at Australian securities firm CMC Markets, according to Reuters.

Japan’s Nikkei 225 index fluctuated for a long time after its 4.5 percent crash from the previous day by minus one percent and went to lunch break at 17,911.07 points, 0.9 percent below the closing price on Wednesday. With the Shanghai Composite Index and Korea’s Kospi, only two markets fluctuated around the previous day’s value.

In Japan, the liquidist market in Asia, there is still concern that the government in Tokyo and perhaps in other major cities may declare a state of emergency. So far, local governments have been struggling with appeals to stay at home to take the final tough step in the arsenal against the pandemic.

The technology investor Softbank, however, resisted the trend because it dropped the office agent WeWork. No sooner had WeWork announced that Softbank had withdrawn its $ 3 billion takeover bid on WeWork than the stock price skyrocketed.

At lunch break, Softbank was up 1.5 percent with 3,731 yen. Not even the WeWorks threat to sue Softbank frightened shareholders. Rather, they reacted with relief that Softbank did not invest its cash in the restructuring case in these turbulent times.

Exceptional market Taiwan

Despite public holidays, one market also came into focus: Taiwan. “We’re upgrading Taiwan to bullish,” wrote Sean Darby, chief strategist at Jefferies, an investment firm, to his clients.

With large corporations such as the contract manufacturer Foxconn and the chip manufacturer TSMC The island with its 23 million inhabitants is not only an important employer in China, but also an indispensable supplier of high-tech for the world’s largest exporting nation.

In the eyes of Darby, Taiwan is already benefiting from the restart of the Chinese economy. In addition, the country has so far successfully contained the corona virus. The infection curve meant that “Taiwan is really the first country to escape the virus,” believes Darby.

At the same time, the world economy would be in a top position, while the companies were “highly solvent”. “Taiwan offers a large number of companies with good dividend coverage and decent returns that are supported by healthy balance sheets.”

More: Read all current developments regarding the corona pandemic here.

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