8DECEMBER - JANUARYCFO TECH OUTLOOKIN MY OPINIONASSET MANAGEMENT IN TURBULENT TIMESBy Hildur Eiriksdottir, Director, Asset Management, ÍslandsbankiWith the situation in the world as it is today, where we are dealing with the aftermath of a pandemic, Central Banks and Governments stepped in. Supply chains that were severely disrupted were starting to recover when the war in Ukraine started, which caused a major shock to the commodities market. All these events and actions have now resulted in very high inflation and interest rates are rising fast to fight the inflation.Since 2009 we have seen close to a continuous rise in the equity markets but that has come to an end. Part of the recent decline in market values is based on changed investor expectations of future growth. Many companies have been priced from expectations of continuous growth but are now looking at less growth due to increased costs relating to supply chain disruptions and more challenging market situations. When faced with such turbulence following a long period of optimism, the reaction of market participants can be quite harsh.Now more than ever it is important to be in a good relationship with clients and review what actions have been taken on the portfolio, what is affecting the portfolio, and if any changes are to be done. The risk profiling and tolerance that is evaluated at the beginning of the business relationship is important, but these turbulent times often put to test if that risk assessment must be adjusted and if any changes are to be made. That is best done through Hildur Eiriksdottir
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