Corona – perspectives from four players in global finance

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Markets are still red as news of Coronavirus horrifies the globe.

Europe and South African markets have seen 10 per cent drops.

There was even a capitulation in cryptocurrencies like Bitcoin.

The South African Cabinet was meeting Thursday evening about containing the spread – and centres are being set up.

By cutting the connections that spread the virus, as Donald Trump is trying to do, as the Danish and the Italians are trying to do, we may very well be cutting off the oxygen of the global economy.

The Money Show’s Bruce Whitfield asked four economic role players for their views on wise measures in a time of utter panic.

BUSA has initially approached a cautious approach, we’re not going to be panicking. We’ve seen this evolving in phases. The initial phase was the prevention and containment phase and that’s the best way to get an early economic recovery We’re now probably moving into a second phase – the news that there’s been domestic transmission. That’s where government and social partners have to work together to see how we contain the domestic transmission. That’s going to hold the key to hw deep and wide the impact is going to be economically on pubic health institutions, on security of supply chain, which remains vulnerable. What’s important here – we’re also taking the view that we should never waste a good crisis. As clichéd as that sounds. This is an opportunity to address some structural issues that had been affecting our economy for some time. We can use this as an opportunity to stockpile strategic goods and services. We remain vulnerable from a stockpiling perspective in many sectors. Another opportunity is it might be the right time to deal with some of the policy uncertainties. So that when we do start seeing economic recovery, it’s accelerated.

— Stavros Nicolaou – Business Unity South Africa

Sellers are panicking, buyers are reluctant. It’s almost as if markets globally are pricing in the mass extinction of human kind, which is clearly ridiculous. Stocks are coming off so sharply because people think it’s the beginning of the zombie apocalypse but we know it’s not because in China their infection rate has stabilised etc. I think the key here is you don’t want to be selling your valuable assets at these kinds of market levels. I think just keep you head down in times like this.

— Paul Theron – Vestact

What we’ve seen this time around is sudden stops. We see sudden stops in economic activities, sudden stops in people traveling in their day to day lives. Which translates to sudden stops in corporates. We see this translating into sudden stops in markets where markets no longer function properly. Lastly I think what you will see – a much longer-term impact – is when countries realise it’s too big a risk to concentrate any form of economic activity ties with China and diversify away.

— Isaah Mhlanga, Chief Economist – Alexander Forbes

Today cash was king. We saw a bloodbath – and cryptocurrencies are no different. Bitcoin is down about 18 per cent. So many people in the crypto community hoped that Bitcoin would be a hedge against the traditional financial system. However, Bitcoin over the past year is still 79 per cent up in rand terms, so over a longer period one can say indeed it has been a hedge.

— Farzam Ehsani, CEO – VALR.com

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