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Kempen's Commentary: Corona

20 March 2020



As of this week, Kempen employees are alternately working from home; one week one part of the team, and the other week the other part. We’re learning to use all possible means of communication other than physical meetings: e-mail, chat, telephone and video conferencing. Before this week, our teams were split up and divided over different locations to keep functioning as much as possible in case the virus would hit our company. The little pumps with disinfectant soap at all entrance doors have long proved to be insufficient.

This morning I had a dentist appointment. As the treatment was labelled as an emergency, it could continue. Outside it feels like a first spring day: trees start to gently sprout and the sun is getting warmer. At the bakery, no more than three customers are allowed in the store at the same time and people keep more distance in line outside. Friends send a video of their son playing football on an almost empty Dam Square. The city is not completely deserted; it feels more like a Sunday than a complete lockdown, something the government doesn’t aim for either.

Back home behind my laptop I’m faced with a harsh reality again. Central banks have taken unprecedented measures in recent days like interest rate cuts, massive liquidity support, a reboot of bond buying programs and highly attractive loans to the banking industry. However, stock markets are again showing major declines. The movements are unprecedented. Last week gave us the worst day for the AEX since Black Monday in 1987. The next day there was hardly any recovery at first. Later on this increased to 10%, to evaporate again completely at the end of the day.

These are unprecedented times for investors. And also incredibly difficult times. Economic and profit figures hardly have any meaning anymore. Some figures are still from the period before the virus emerged. The figures that are relevant are of course very poor, but also: they don’t give any indication of how long this situation will last. Fundamental analysis is therefore very difficult, and at the same time we don’t want to focus on the short term too much. We keep an eye on the medium term and the asset allocation that goes with it. This also includes short-term flexibility to correct large deviations. Communication towards customers has increased a bit, as things are changing so quickly. The only thing that doesn’t change is our dedication and commitment. We are constantly on it and discuss the investment policy together on a daily basis.

The author

Joost van Leenders

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