Sectors benefitting from a resumption to normality, outperform

Since first detected in January 2020, the coronavirus pandemic and ensuing global response have dictated economic activity and credit markets way forward. 

Initially, the economic landscape, following the imposition of movement restrictions, deteriorated. Credit markets, witnessed credit spreads reaching significant highs of over 1000bps. Then, a concerted effort by both Central banks and governments led to what we have been witnessing in 2021 – a robust economic recovery and upward trajectory in financial markets. 

The concerted effort proved crucial. Monetary intervention by respective central banks allowed corporates to tap the primary market at low favourable rates while fiscal intervention by governments allowed businesses to maintain their cash buffers and ultimately survive. The improvement in macroeconomic conditions along with vaccination programmes being well underway, particularly in the developed market world, triggered a risk-on mode. The re-opening of economies, further bode well pushing credit markets higher. 

In-line with improved macroeconomic conditions and credit metrics (owing to deleveraging assisted by improved earnings and refinancing at favourable rates),...