Citi experts have identified “unstoppable trends”.
Strong growth rates possible
Green energies, sustainability and cyber security in focus
As part of a virtual media briefing, Citi experts provided tips on global hot topics that offer investors opportunities to make money.
Alternative and green energies in focus
Ken Peng, senior investment strategist for Asia Pacific at Citi Private Bank, initially focused on alternative and green energy at the event. Climate protection is one of the most important issues worldwide, the segment is “very productive at the moment” when it comes to global trends, CNBC quotes the Citi experts as saying.
Peng also refers to the money that governments invest in climate projects: “Governments from all over the world, from China to Europe to the USA, are concentrating on sustainable development and are backing their words with action”.
Still, Peng concedes that the sector has “runned a little hot” in 2020, citing many investors investing with borrowed money. Many market participants then left again between January and April, and the market fell by 40 percent in this context.
An ideal time for investors to buy back, Peng believes, “I think this presents a very interesting opportunity to jump on the bandwagon for this trend that will probably be with us for a good part of the next decade.”
Sustainable investing as a trend
Another trend that is likely to keep markets busy for some time is mentioned by Peng’s Citi colleague David Bailin, who is the chief investment officer at Citi Global Wealth. In his view, younger investors in particular will place a “huge focus” on sustainable and responsible investing over the next five to ten years, rather than just focusing on profits. How companies treat the environment and their employees will also play a role in the decision for or against an investment, and politics will also play a role in the investment decision, Bailin is quoted as saying at CNBC.
In his view, issues such as climate change, social justice and the associated fair access to education and technology will become “unstoppable trends”. Here he expects “extraordinary growth” in the next five to ten years. Investors will then combine two things: make money and do something good at the same time.
Cyber security is becoming increasingly important
Bailin cites cyber security as the third important trending topic in investing. Here, too, the Citi expert sees worthwhile investment options for investors. The Citi expert emphasizes that the need to protect against cyber risks is driving higher spending in this segment. “It’s good for the people who create this kind of collateral and then you can invest in it,” Bailin continued.
However, investments in this segment are not completely risk-free: one has to consider that cyber security also has a very important military component. Because the topic is not only relevant for companies, but is also used by the military “to actually destroy the enemy’s infrastructure,” he added. “So for us, this is an area of continuing concern – but also an area of real investment,” summarizes Bailin.
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