Imperium Capital Publication

Viewpoint – March 2021

While the vaccine news in early November was arguably the critical turning point in this cycle, providing light at the end of the pandemic tunnel, it was only in the first quarter of 2021, 12 months from the pandemic’s onset, that investors began to price in the recovery ahead and a return to post-pandemic normality. The recovery and reflation trade took hold, manifest most clearly in sharp falls in bond markets, suffering one of their worst quarterly returns in decades, and in a big rotation in equity markets, from the pandemic winners, in e-commerce, the digital and online world, to those sectors which have suffered most from lockdowns and restricted mobility. Over the quarter, global equities returned 4.9%, but within that, the sectors most sensitive to economic recovery produced substantial returns, including energy +22% and banks +19%, while those which had benefitted from the pandemic, such as IT, healthcare and consumer staples, were flat.

Global Matters Weekly – 12 April 2021

SPACtacular surge

by Christopher Butcher

During a period of extreme volatility and a global pandemic, the initial public offering (IPO) market had a spectacular year in 2020 in terms of the number of new listings and proceeds raised, along with the rise in popularity for Special Purpose Acquisition Companies (SPACs) which have become one of the hottest investment trends on Wall Street.

Pandemic aside, 2020 has been referred to as the ‘Year of the SPAC’ in the US as the number that floated on the stock market reached an all-time high, with over $80bn raised across more than 240 SPAC listings1 . This accounted for nearly half of all listings on the US market, a significant increase compared to 2019. The momentum has certainly carried over into the start of 2021. Supportive monetary and fiscal stimulus, ultra-low interest rates and global markets at record levels have helped the US IPO market produce its busiest quarter in over two decades as issuers rush to sell while investor demand is hot and valuations high. The SPAC trend also continued, with 296 SPACs going public in the first three months of the year, already raising more capital than in the full year of 2020.

Market Snapshot

  • Global equities rose 2.4% last week
  • The IMF’s latest global economic growth outlook for 2021 was upgraded to 6.0% against 5.5% forecast in January
  • Brent crude fell -2.9% last week to $63.0 a barrel
  • Gold rose 0.9% to $1743.9 per ounce