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Thursday, 25 June 2020

True to their conservative nature, CFA holders are banking on slower recovery

True to their conservative nature, CFA holders banking on slower economic recovery: Chartered Financial Analyst (CFA) certificate holders expect the post-covid recovery to either be hockey stick-shaped or U-shaped, according to a report of the survey results by the CFA Institute. As many as 44% of the respondents expect the former scenario, which implies a medium-term rebound, while 35% are pricing in the latter, which is tantamount to a slow-paced comeback. Another 10% still seem to think that a quick and robust V-shaped recovery — which some expected in the earlier stages of the crisis, but has since been widely seen as unlikely — could be in the cards.

CFA holders based in the Middle East agree, with 46% expecting a hockey stick, 33% penciling in a ‘U,’ and 9% banking on a ‘V.’ Most respondents applauded central bank intervention, but remained split on whether this should continue or if it’s time for the invisible hand to take over.

Long-term impact: Large-scale bankruptcies were shown to be the most concerning long term risk posed by the deterioration of market condition due to the pandemic, with 39% of the survey respondents expecting institutions to run out of money. Over a third (38%) expected companies to be forced to speed up operational automation and increase reliance on outsourcing to save costs and 34% see large-scale consolidations taking place on the longer term.

Also, as many as 33% expect the long-term to drive a wedge between emerging and developed markets and drive them further apart. One explanation is that liquidity in EMs has most likely dropped as three-quarters of the CFA respondents believe it to have suffered more than in developed countries.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2020 Enterprise Ventures LLC.