Secular growth trends in the world
Secular trends are not seasonal or cyclical. Instead, they remain consistent over time.
Secular stocks maintain a static trajectory regardless of current economic trends. When applying the term to the stock market, a secular market is the market's overarching trend or direction for five years or more.
These are the secular growth trends in the world which can be translated into investment opportunities:
• Push towards greener energy in China
- Though China is growing, nation has become wealthier, so has its energy usage. Main source of energy is still coming from coal. This has resulted many cities in China facing pollution.
- Over the last five years, Beijing has implemented a series of policies for switching centralized heating from coal-to-gas to combat pollution, such as the "Blue Sky Defence" plan in mid-2018 that expanded gas switching to over three dozen cities.
- 70% of energy source is still coming from coal. Hence the shift from coal to clean energy like natural gas is still a long way to go.
- Beneficiary is China Gas Holdings.
• Protectionism
- BREIT and trade war are signs that the world is moving towards protectionism.
- Companies that derives a high proportion of their revenues domestically are more likely to be stable in a protectionism world.
- Focus on companies that depend more on consumer spending rather business spending and stay away from victims of trade war.
- Beneficiaries are Alibaba, AIA, Ping An Insurance, Nike, DBS Group, OCBC, Disney, Home Depot etc.
• High technology
- Businesses around the world turning to 5G, Artificial intelligence, Big data and Cloud computing.
- Companies that provide these services and develop technologies relating to them are more likely to enjoy increasing growth.
- Beneficiaries are Microsoft, TSMC, Alibaba, Alphabet, Facebook, Tencent etc.
• Fintech
- Financial sectors push into digital services.
- Growth in the decade ahead lie in mobile payment, online investment and online credit.
- Beneficiaries are Paypal, Amazon, Alibaba, Tencent, Ping An Insurance etc.
• Defence sector
- Geographical uncertainty coupled with a huge increase in US military spending could be a strong catalysts for defence stocks.
- The Pentagon's defence spending power is up $738 billion from $717 billion in 2019.
- Beneficiaries are Lockheed Martin, General Dynamics etc.
Secular stocks maintain a static trajectory regardless of current economic trends. When applying the term to the stock market, a secular market is the market's overarching trend or direction for five years or more.
These are the secular growth trends in the world which can be translated into investment opportunities:
• Push towards greener energy in China
- Though China is growing, nation has become wealthier, so has its energy usage. Main source of energy is still coming from coal. This has resulted many cities in China facing pollution.
- Over the last five years, Beijing has implemented a series of policies for switching centralized heating from coal-to-gas to combat pollution, such as the "Blue Sky Defence" plan in mid-2018 that expanded gas switching to over three dozen cities.
- 70% of energy source is still coming from coal. Hence the shift from coal to clean energy like natural gas is still a long way to go.
- Beneficiary is China Gas Holdings.
• Protectionism
- BREIT and trade war are signs that the world is moving towards protectionism.
- Companies that derives a high proportion of their revenues domestically are more likely to be stable in a protectionism world.
- Focus on companies that depend more on consumer spending rather business spending and stay away from victims of trade war.
- Beneficiaries are Alibaba, AIA, Ping An Insurance, Nike, DBS Group, OCBC, Disney, Home Depot etc.
• High technology
- Businesses around the world turning to 5G, Artificial intelligence, Big data and Cloud computing.
- Companies that provide these services and develop technologies relating to them are more likely to enjoy increasing growth.
- Beneficiaries are Microsoft, TSMC, Alibaba, Alphabet, Facebook, Tencent etc.
• Fintech
- Financial sectors push into digital services.
- Growth in the decade ahead lie in mobile payment, online investment and online credit.
- Beneficiaries are Paypal, Amazon, Alibaba, Tencent, Ping An Insurance etc.
• Defence sector
- Geographical uncertainty coupled with a huge increase in US military spending could be a strong catalysts for defence stocks.
- The Pentagon's defence spending power is up $738 billion from $717 billion in 2019.
- Beneficiaries are Lockheed Martin, General Dynamics etc.
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