5 Industries That Have Done Well During This Pandemic
The daily news seems to be filled with stories of doom and gloom.
While it is true that the pandemic has caused much hardship and economic stress, the impact on different industries has been uneven.
Industries that thrive on transport and human interactions, such as air travel, tourism, retail, entertainment and hotels, have suffered severely due to lockdowns and border closures.
On the flipside, the pandemic has boosted demand for other types of services as more people work and study from home.
As investors, we need to keep our eyes peeled for such opportunities.
Here are five industries that have continued to do well despite the pandemic.
Online retail
As more people work and study from home, online ordering has increased.
Whether it is fresh food, apparel or toys, buying online is convenient and just a click away.
The fact that malls have shut in many countries also makes it impossible to physically browse the aisles of a retail shop, unless you are looking for daily essentials.
The hassle of venturing out with a mask, coupled with the risk of contracting the disease, have led to a boom in online retail.
Companies such as Amazon.com (NASDAQ: AMZN) have reported a surge in customer demand, particularly for household staples and other essential products.
The company hired an additional 175,000 employees to deal with this burgeoning demand, some of which will continue to linger on even after the pandemic has passed.
Pharmaceuticals and medical supplies
There has been a surge in demand for pharmaceutical products and medical supplies such as personal protective equipment (PPE), surgical gowns, nitrile gloves and face masks.
The demand was so great that it caused Singapore’s non-oil domestic exports to rise unexpectedly by 9.7% year on year in April.
The expansion was led by pharmaceutical exports, which rose a stunning 174.3% year on year.
Companies such as Riverstone Holdings Limited (SGX: AP4) and Top Glove Corporation Berhad (SGX: BVA), which manufacture nitrile gloves for the healthcare industry, have seen a surge in orders in the last three months.
Both companies have seen their share prices more than double year to date.
Wealth management
Wealth management continues to be in demand as the dislocation in financial markets creates opportunities for capital deployment.
Banks such as OCBC Ltd (SGX: O39) reported a year on year increase in wealth management fees, despite assets under management dipping slightly to US$104 billion.
Companies such as iFAST Corporation Limited (SGX: AIY) announced that its assets under administration (AUA) climbed back to S$10 billion in April after briefly dipping below this level when the market crashed in March.
There have also been reports from all three banks that more people are opening investment accounts for digital investing, and are using robo-advisor services in greater numbers.
Autonomous vehicles
A sector that has been little touched by the pandemic has been that of electronics, even though supply chains may have been temporarily disrupted.
Artificial intelligence (AI) and the Internet of Things (IoT) are two trends that existed even before COVID-19.
Development of autonomous vehicle technology is continuing to reduce the need for humans to operate vehicles.
Companies such as Alphabet (NASDAQ: GOOGL) and Tesla (NASDAQ: TSLA) continue to pump significant sums in this technology to bring it to eventual fruition.
Logistics
In a world where a killer virus lurks, it has never been more important to be equipped with the logistics and distribution networks to ferry goods to their destinations.
As people hunker down in their homes and batten down the hatches, logistics companies are seeing a surge in demand for their services as more people order goods online instead of buying them physically.
Companies such as FedEx Corporation (NYSE: FDX) stand to benefit from this surge in orders.
New habits may be formed even when the danger has passed, as more people enjoy the convenience of online retail and home deliveries.
These habits will continue to boost demand for logistics solutions, thus propping the industry up over the long-term.
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Disclaimer: Royston Yang owns shares in iFast Corporation Limited.
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