• Since the first reported case of Covid-19 in China on 31Dec19, STI has fallen 16.8%. Considering the time elapsed, the decline was swifter and worse than the -15.5% during the SARS outbreak in 2002/03 (Figure 2).
• To juxtapose, the most severe sell-offs during the Global and Asian Financial Crisis resulted in a 62% decline in STI from peak-to-trough.
• While it is impossible to ascertain the peak of the spread of Covid-19, some positives for the STI include record low interest rates and valuations, government stimulus globally and the dramatic reduction and containment of new Covid-19 cases in China (Figure 3).
• We remain Overweight on the banking, telecommunications and electronics sectors.

Figure 2 quantifies the impact of the sell-off in the STI as identified by the shaded areas in Figure 1.