New Europe

Investment Summary

Musings on Greece

The local equity market is among the worst performers globally, falling approximately 40% year-to-date, even after the recent bounce. This exceeds the declines of around 30% seen in the Italian and Spanish markets, whilst both remain epicenters of the outbreak in Europe. Furthermore, many Greek mid-caps have seen even greater share price declines, despite in most instances being less materially impacted than the financials and industrials heavy index.

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Infrastructure Securities

Telecoms are booming with the confinement

Telecom Italia reports a 70% increase in land line usage since the confinement, and 30% for mobile.  Surely, the enablers of teleworking, on-line entertainment and social networking will benefit from more traffic, as long as people are forced to remain at home.

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The environmental silver lining

The COVID-19 pandemic is causing enormous disruption to many parts of our lives – our health, our jobs, the economy, and our sense of security. It’s a devastating and global catastrophe. But one small silver lining is that it is creating a truly once-in-a-lifetime opportunity to realise the environmental effect of our usual levels of human activity, and how quickly the natural world rebounds when we’re quarantined at home.

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ESG rating bias and the key role played by internal bottom-up ESG analysis

European Small Cap Equity

We’re regularly baffled by the ESG scores for companies we know are committed to a sustainable future

We are often vocal about the shortcomings of ESG ratings. This frustration is particularly acute for our European Small Cap Equity team who invest in companies that often do not have any coverage from ESG agencies. For those that are rated, the grades rarely reflect what we understand of the company through our bottom-up analysis and regular company interaction. We’re regularly baffled by the ESG scores for companies we know are committed to a sustainable future.

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