The COVID Diaries: investor 9

The following interview is with a Hong Kong-based fixed-income investor. It was conducted on 3 June 2020.

Your business at least in part is already back in the office. How is the transition going and is it good to be back?

Half our staff are back in the Hong Kong office and we are using site rotations. We’ll never get to 100 per cent and we’re only aiming for 50 per cent. Our staff will work in the office for two weeks followed by two weeks from home.

Everyone’s circumstances are unique and it very much depends on where in the world they are. However in Hong Kong people generally are pleased to be back in the office because apartments are so tiny. There is ample flexibility within the company and we are not making specific demands of workers – for example those who may be worried about using public transport.

Our target globally is to have 50 per cent of people back in the office by the end of the year. From what we’re seeing in APAC, 50-75 per cent is ideal. In North Asia we already have 50 per cent of staff in the office while we aren’t there yet in Singapore and Australia.

In Australia, some people have worked in the office throughout. The issue we are facing is social distancing requirements. If these don’t change we’ll never have anyone sitting directly adjacent to one another so we’ll never see 100 per cent of staff back.

Is it your sense that never getting 100 per cent of staff back to the office really means never – even with a vaccine?

It will be different for every institution but I’m reasonably confident that for my company never means never. When leasing office space most big companies look to achieve cost savings by aiming for between 100 and 130 per cent occupancy, therefore I think more staff will be offered more opportunity to work from home on a permanent basis. One thing to emerge from events since February is that companies will realise that they don’t need the same level of office real estate.

Do you agree that it now time to change the emphasis towards reopening the economy from averting a public health crisis?

It was a shock to start with. No-one had face masks or hand sanitiser and that was the first thing to deal with. Then governments brought their massive support programmes.

In my view the economy didn’t get as bad as people suggested – I think this is certainly true in Australia, and in Hong Kong the government made substantial provision for programmes of which only half was used. Admittedly some people lost their jobs but companies did their best to keep people on the payroll. Certainly from a financial markets perspective the recovery has been pretty quick.

Outside of people rushing to get emergency funding, the new issuance market suffered – it was effectively dead for a couple of weeks. But it is reopened now and we have seen some good taps.

Social distancing and having a bit of space between people really isn’t a bad thing. This way of living makes everybody healthier and, if we must re-learn, so be it. People need jobs and the economy needs to run, so I’m very much in the camp of reopening the economy – albeit bit by bit and with flexibility and a willingness to change tack, if necessary, week to week.

“There are far greater hurdles on the horizon than COVID-19 – that’s my honest view.”

Are you more or less optimistic about the crisis than you were during the early acceleration period of moving to home working and adding social distancing measures?

Initially it was very scary, but I think the view that we will get a vaccine is universally held by now. Perhaps it becomes part of the annual flu vaccination. Scientists are smart and will come up with something, even though some countries – mostly in APAC – have done better than others in this respect.

Do you subscribe to the view that this crisis will radically reshape our society? What do you think will change and what will areas that some might think will change will actually revert to previous norms?

I don’t think things will fundamentally or significantly change although I’m sure there will be some changes at the margin. Maybe globalisation will pull back a little – perhaps we have seen the peak. Big corporate institutions may downsize their presence and provide more flexibility to workers to work from home and such like. I think these are positive developments. There are far greater hurdles on the horizon than COVID-19 – that’s my honest view.

When do you think you will next get on a plane? Are you looking forward to or dreading travelling again, for business and leisure?

I think there’s a chance of some travel in Q4 this year. There might be a travel bubble between Australia and New Zealand, but regional travel will take longer. As an Australian living in Hong Kong clearly I can come back in the sense that I can book a ticket. But if hotel quarantine is still mandatory obviously that’s not very appealing.

In the next phase I think we’ll see countries with no or minimal new cases start lobbying for travel to reopen with Australia. But there’s a risk that more conservative countries will just refuse for the rest of the year or longer. I’m certainly hoping to travel by Christmas and, with Hong Kong being a small place with limited places to go, I’m definitely looking forward to it.

What are you most looking forward to being able to do again, as restrictions ease in the coming weeks and months?

If I was living in Sydney, there’s no doubt I would say socialising with friends and having the freedom to get out of the city. But for me here, undoubtedly it’s the freedom to travel.

KangaNews is your source for the latest on the COVID-19 pandemic’s impact on Australasian debt capital markets. For complete coverage, click here.