Opportunity and optimism in the face of crisis
In January 2020, I had a casual reunion with my two of my old primary school friends. We played a little basketball and then hung out at the new neighbourhood food court, near my home. Our conversations usually revolve around the topics of Sports and Financial Investments. One of my friends is a seasoned stock market pundit, who is always in the know when it came to the latest schemes and hot stocks. My other buddy works in Finance. Myself? Well, my early exposure to retail finance was because of the influence of my dad, who is a Financial Planner.
Over coffee, the seasoned investor buddy introduced both of us to Robo Investor, StashAway. On hindsight, this wasn’t the first time he had told me about it. He had shared about the service during an jogging excursion in mid-2019, but I had not paid heed back then. This time round, my friend was raving about the Stashaway and how it was the best investment service he had used. We were convinced and signed on the spot. That started my first journey into equities. I had avoided for the longest time because I wanted to buy only when there is a fire sale. My portfolio before that comprised of corporate and government bonds, and endowment plans.
Covid-19, better known as the Wuhan Virus back then, was not something any of us worried about at that point. I read about it in papers, but it felt like something that could be easily contained, the same way H1N1, Zika and MERS were contained.
By the end of the month, everything changed. I remembered coming across a 20th January Facebook post by former Singapore foreign minister George Yeo that made me realise how big of a crisis Covid-19 could become. Mr Yeo shared a CGTN story titled “President Xi Jinping orders resolute efforts resolute efforts to curb coronavirus epidemic“, while sharing that it was “Time to worry”. When one of Singapore’s most illustrious and brightest says something like this, I worry. From thereon, it seemed the Singapore government started to take action to curb the spread to our shores. That same day Singapore’s Ministry of Health announced “it will expand temperature screening to all travellers coming in from China from Jan 22, in light of the Chinese New Year holidays and expected influx of Chinese travellers.”
Two days later, the Singapore government formed the ‘Wuhan virus ministerial task force’, with our health minister adding that the spread to Singapore was ‘inevitable’. Shortly after that, face masks and hand sanitizers became hot commodities. People were wiping out the stock of these products at physical stores and online. Around 2-3 days before Chinese New Year (25 & 26th January), my wife and I decided to buy these items, and we were appalled that face masks and hand sanitizers were sold out in most Tampines Central shops! Still, we managed to grab the last two hand sanitizers at Watsons and fabric masks at a mom-and-pop beauty store.
The next significant Covid-19-related event in Singapore was the 7th February government hiking the Disease Outbreak Response System Condition (DORSCON) level to Orange. I recall reading the news while I was at NTU’s The Hive, working a paper before my evening graduate school class. During the session, social media was bursting with stories about the first round of panic buying in supermarkets. The stocking up of toilet paper and instant noodles was just incomprehensible, to me at least.
Rattling financial markets
All this while, I was confident that my investments in US and EU equities would be fine. I pumped in more money because I saw good returns. I even told my wife that I didn’t think the virus would affect western economies. How wrong was I. When the United States reported its first local transmissions of Covid-19, this sparked massive sell-off and a crash in the stock markets. My investment holdings plummeted as well and I learned my first lessons of investing:
- It is very, very hard to manage one’s emotions during such times of market crashes and sell off. There is a real fear that you’d lose your hard earned savings and this will lead to many selling off their holdings. I was on the verge of selling, too. I chatted with friends and some had sold their holdings at a loss.
- It is nearly impossible to time the market. Who would’ve known that a virus outbreak would cause the market to crash? Prior to Covid-19, most market watchers were speculating on possibilities such as the US-China trade war and a war outbreak between US and Iran. Previous causes of market crashes had been linked to financial and political issues: Brexit and the 2008 housing mortgage crisis in the US.
As of mid-May, we know that the market crash has stabilised in mid-April because governments around the world came to together to stimulate their economies, to avoid a sharper decline. Pundits are warning, however, of the worse to come. But the reality that many retail investors are jumping back into the market, with stock prices at historic lows. There are reports of investors taking on debt to buy cheap equities and property hunters bargain hunting too. Evidently, many Singaporeans have been waiting for an opportunity like a market crash, to increase their investment holdings.
Covid-19 business changemakers
While the virus outbreak has created opportunities for some, it has decimated industries such as the travel and tourism sectors, and many small businesses – the media and creative, food and beverage, and so on. An interesting phenomena is that out of the ashes, we some entrepreneurial folks banding together to form Facebook groups to support one another.
The Facebook group ‘SG COVID-19 Creative/Cultural Professionals & Freelancers Support Group‘ was borne out of the crisis, when founder Nicholas Chee saw that many of his fellow had lost their creative gigs. It is one of the more active groups that I’ve joined, and members post helpful tips and respond to queries. I guess that’s the beauty of having communicators as members. They tell stories and share information. Many people in the creative industry are freelancers, due to the nature of the industry. Gigs are seasonal and projects are on an ad hoc basis. These folks are always on the lookout for their next project. And when Covid-19 hits, and you can’t film or hold events, this means many people would be in cold storage and out of a job.
I transitioned to the media freelancing world ever since I embarked on my graduate studies, and it is interesting to see how this industry functions. I was also lucky enough to be part of SCAPE’s Creative Fellowship programme for creative startups and I met many young entrepreneurs. They are involved in areas such as art installation work, food artistry, tattoo-ing and so on. One startup founder I was privileged to meet through the programme is the co-founder of home-cooked application, Frea Technology. The service facilitates links up hosts who prepare home cooked food and their customers. The co-founder said that his app has seen an increase in pick-up in usage of the app, “especially among those who are looking to sell their food.” He also shared that Frea is looking to partner with Sudesna Roy Chowdhury and her volunteer team to provide food to migrant workers.
Another interesting support group is Hawkers United – Dabao 2020, started by 2nd generation hawker Melvin Chew. According to reports, Melvin saw a gap in hawkers – many who are senior citizens – in digitalising their business. The Hawkers United website pulls together the contact information of hawkers from all over Singapore, so that potential customers can contact them for food orders. On April, Singapore commenced what is known as its ‘circuit breaker’ measures, which includes closing down many businesses and schools, and getting Singaporeans to study, work and stay at home. Essentially a partial lockdown, circuit breaker meant that many small retail businesses couldn’t operate. Many food outlets, especially in the city centre have been severely affected.
The way Singaporeans have banded together and sought out opportunities gives me a lot hope that this tiny city-state can pull together and get through the crisis. Of course, much props to the medical frontline workers who are putting their lives on the line, to fight this crisis. While most of us are working from home and enjoying extended Netflix binges, these heroes are fighting to save lives. As for the economy, one thing for sure is that the virus will change the way we do business.