1. A trend witnessed in several countries globally, the daily number of Covid-19 cases in India started to increase in late-August as the country continued to ease quarantine restrictions and economic activity began to gradually normalise. A silver lining is that these countries – including India – have not seen a corresponding jump in mortalities, reflecting improved treatments and wider testing revealing asymptomatic cases. While this may raise uncertainty on the pace of economic recovery, government stimulus should filter into the real economy gradually, supporting a recovery in due course. Indian equity markets continue to trade at a discount to long-term averages, and we believe long-term reforms and expectations of faster earnings growth could support a re-rating.

2. Although US-China tensions heightened in August following US president Donald Trump’s decision to ban Chinese apps TikTok and WeChat in the United States, sanctions on Huawei, export controls and the South China dispute, commitment by American and Chinese officials to ensure the trade deal remains on track eased investor concerns that worsening relations could lead to the end of the agreement. While we expect US-China relations to remain volatile, we remain positive on China’s longer-term outlook as the country continues to emerge from the Covid-19 crisis with positive growth in gross domestic product (GDP) in the second quarter, raising expectations for positive growth for the year as a whole.

3. In our view, Russia is in an enviable position when looking at a number of fundamental factors; it has little sovereign debt, a current account surplus and considerable foreign exchange reserves. The country’s leading bank is so much more than a traditional bank. Its digital ecosystem incorporates artificial intelligence, big data and robotisation. Similarly, Russia’s leading search engine has built an impressive ecosystem. Already successfully competing with Google, it offers services such as e-commerce, ride sharing and online music in a similar fashion to Apple Music. Thus, it would seem that in addition to its continued dominance in the old economy of oil, Russia appears to offer a compelling investment pool for those wanting to ride the structural tailwind of the new reality where consumption and technology underpin tomorrow’s drivers of growth.

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