(BFM Bourse) – While it is very difficult to predict the future, it is possible to identify future trends in certain sectors of activity. Credit Suisse has identified six investment “supertrends” for the coming years. Titled “Super Trends 2022”, the document offers investors long-term opportunities in sectors expected to show strong growth.
Five years after its launch, Credit Suisse’s Super Trends – or long-term investment trends – continue to focus on long-term, multi-year societal trends that can create opportunities for rapid business growth. Companies with high future growth potential are linked to the following themes: “anxious societies”, infrastructure, technology, the veteran economy, millennial values and climate change. Only the theme of climate change was not included in the first report. super trendsPublished by Credit Suisse in 2017.
Credit Suisse has based itself on the 17 United Nations Sustainable Development Goals (SDGs) to create its list of long-term investment trends. This new framework will help investors prioritize their investments according to their goals, such as tackling climate change (SDG 13), reducing inequalities (SDG 10), promoting economic growth and decent work for all (SDG 8). or promoting health and well-being (SDG 3).
The recent market volatility associated with the Russian invasion of Ukraine has not significantly impacted everyone’s long-term faith. super trends, despite the tendency of some short-term catalysts to support certain trends identified by the Swiss bank’s experts. In 2021, the “Infrastructure” and “Climate Change” supertrends have particularly benefited from Credit Suisse’s large-scale infrastructure projects, as well as political support for climate action at key events such as COP26.
But this year, investors should expect lower returns as companies and consumers battle inflation at its highest level in decades, according to Credit Suisse. “We designed super trends Michael Strobaek, Global Chief Investment Officer at Credit Suisse, to transcend economic cycles and provide investors with multi-year equity investment opportunities.
Societies ‘anxious’ to respond to social ills
The first trend chosen by Credit Suisse concerns the so-called “concerned” companies. It specifically addresses inequalities in access to housing, education, health care and personal security. The companies identified by Credit Suisse’s management teams therefore have a positive impact on society and aim to alleviate societal ills.
Companies that help reduce the costs of basic necessities such as food and shelter, encourage employee reskilling/development, or offer solutions for personal safety, hygiene and cybersecurity are companies to watch out for. “The recent rise in inflation has led to new accessibility challenges, particularly in terms of housing and food, and paved the way for societies that can overcome these challenges,” said experts at the Swiss bank.
“Geopolitical tensions at the beginning of the year brought the ‘Personal Security’ sub-theme of our Super Trend ‘Anxious Societies’ back to the fore. Cybersecurity in particular remains a central consideration, as do the ‘Accessibility’ and ‘Security’ sub-themes. ‘ they add.
Another “super trend” identified by Credit Suisse is the rise of companies in the infrastructure sector. The year 2022 should be the starting point for a “multi-year boom” in a segment that should be spurred by increased public spending on new infrastructure programs in the United States and Europe. In this sense, Credit Suisse reminds of the $ 1.2 trillion infrastructure plan adopted by the American Congress in November 2021. Focusing on the modernization of transport, this program should benefit construction companies. “Inflation is a very positive factor for the infrastructure sector, as transport companies’ contracts and regulated water/gas/electricity services include a price indexing clause (linked to a consumer price index or an industry-specific inflation measure),” notes Credit Suisse.
Technology stocks and an aging population
For technology stocks, inflation is far from a blessing. That was the reason for the recent stock market crash in the tech department. Despite these headwinds, Credit Suisse believes the digital revolution is “far from over”. The emergence of new digital worlds such as the Metaverse will create new opportunities in the eyes of experts. “Investments in digital marketing, production, sales and distribution are expected to grow with the population of this virtual world,” Credit Suisse says.
Companies producing software or linked to the distribution of 5G, artificial intelligence, virtual reality and the aforementioned metaverse remain long-term bets for the Swiss bank. Expecting more companies to offer solutions for privacy and data protection as consumers become more aware of their importance, Credit Suisse predicts that generations Y and Z will increasingly integrate the metaverse into their daily activities.
The aging of the world population is also one of the main trends identified by Credit Suisse. The number of seniors is expected to double, reaching more than two billion people by 2050. This demographic development will create demand but will also be a source of difficulty for the Swiss bank’s specialists. Fundamental changes are expected in the real estate, healthcare, insurance and consumer markets.
Among the players to watch, Credit Suisse is looking specifically at biopharma, medical technology and life sciences companies that are treating ailments affecting the elderly with innovative products (RNA therapies or antibody-drug conjugates), “well-managed” senior housing providers and operators. Executives also mention health and life insurance companies, private wealth advisors, and wealth managers with strong price-negotiating power, as well as consumer goods companies that focus on the needs of the basic and the special wishes of seniors (tourism companies, beauty products manufacturers).
Experts at Credit Suisse say, “Older citizens are a powerful group of consumers with significant purchasing power reflecting their lifetime accumulation of wealth as well as legacies received around retirement age, another effect of increased longevity”.
The new generation’s interest in the metaverse and energy transition
At the other end of the age pyramid, companies that offer services in line with the values and new habits of the younger population (millennial generation) are preferred by Credit Suisse executives. For them, the younger generation is ready to integrate the metaverse into their daily activities and will disrupt the sales, advertising, media and finance industries. Companies with a focus on emerging markets, both global and Chinese brands, aligned with millennial entertainment, health and recreation values are preferred by Credit Suisse executives.
Companies that know how to take advantage of the ecological consciousness of some millennials were also included in the selection of Credit Suisse. These companies are developing in areas such as biodiversity and climate protection, healthy and sustainable food, responsible consumption and production, and clean energy. A recent survey by the Credit Suisse Research Institute reveals strong concerns of young consumers (especially in developing countries) about environmental issues.
In addition, Credit Suisse has integrated the problem of climate change into its goals. super trends After observing an acceleration in consumer behavior in 2020, the production processes of societies and the measures taken by governments to curb climate change.
The theme of climate change brings together leading companies in renewable energies (wind, solar, water, etc.) and technology providers for the generation and storage of electricity without CO2 emissions, or companies that have mastered carbon capture technology and are working towards improvement. blue and green hydrogen production capacities. Meat processing companies with low greenhouse gas emissions and suppliers of plant-based food products are also among Credit Suisse’s choices.
For the bank, the recent rise in energy prices should contribute to the abandonment of fossil fuels for electricity generation and transport in the short term. “The global food system, which is responsible for more than 20% of global greenhouse gas (GHG) emissions, is also in the process of reducing its carbon footprint and presents long-term opportunities for a wide range of sectors,” the experts add.
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