Keeping a cool head is the message 10-03-2020

Oil prices in free fall

The coronavirus is putting the brakes on the economy and demand for oil is falling.

Disagreement between Saudi Arabia and Russia to limit oil production is causing prices to plummet.

This is good news for consumers, but not for listed oil companies. Oil companies with considerable debt could run into difficulties. Will they end up saddling the financial sector with problems?

Coronavirus sparking a bigger shock on the stock markets

The number of people infected is growing worldwide. Italy goes into complete quarantine. Who's next?

The economic impact is greater than initially forecast, with the world economy contracting in the first quarter.

Investors are capitulating. They are fleeing to save-haven investments and buying government bonds, the Swiss franc and gold.

Opportunities but still too early to grasp them

The economic impact is temporary. Policy measures are being taken and economic life is picking up again in China and South Korea.

The banks are in a financially stronger position than 10 years ago and are better equipped to respond to the debt problems of oil companies.

Dirk Thiels, Senior Investment Strategist KBC Asset Management
'A market correction of roughly 20% is probably overstated. Uncertainty will continue for a while yet.'

Editing ended on 10 March 2020. This document is a publication of KBC Asset Management NV (KBC AM). The information in it can be changed without notice and offers no guarantee for the future. Nothing in this document may be reproduced without the prior, express, written consent of KBC AM. This information is governed by the laws of Belgium and is subject to the exclusive jurisdiction of its courts.