Freshly imposed lockdown measures did manage to taper off the peak in daily infection figures for the adopting countries, but ones without still see their figures setting new highs by the day. The impact is evident in the weaker economic fundamentals, as the Eurozone services PMI continue to slide, marking the third consecutive month in the contraction zone. Unless the epidemic situation miraculously improves in the short term, the early rebound could be considered a kneejerk reaction to the recent positive news.

Which brings us to the key factor in the equity surge over the month – COVID vaccines. The market seems to be setting their sights on a return to normal by 1H 2021. However, global vaccine production would likely only meet the global population by 2022, which could delay the actual reopening. We believe that the idea of a ‘K-shaped’ recovery still holds true, certain sectors such as oil & gas and financials, should see limited improvement even if the economy recovers due to structural reasons. Thus, selection remains the key, investors should continue to focus on themes and sectors with better growth prospect in the mid to long-term.