BINUS Business School

Surviving Investment During COVID-19 Pandemic: Steps on Investing in a Global Crisis

For several months, Indonesia among many other countries in the world has been suffering economically due to the global pandemic, known as the COVID-19. The spread of the virus has caused most business sectors to shut down, though there are a small number of business sectors that thrive in profits due to the pandemic.

Investment is one of the many sectors that have been affected by the pandemic. People have reported tragic losses on their investments which caused them to avoid making other investments. With this in mind, BINUS BUSINESS SCHOOL invited Tae Yong Shim, CEO of Mirae Asset Sekuritas Indonesia, to be a guest lecturer. Not just any lecture, but an online public lecture via Zoom.

The online public lecture titled “Surviving Investment During COVID-19 Pandemic” was held on Wednesday, 15 April 2020. Tae Yong Shim is a Master’s program (MM Executive in Strategic Management) alumni of BINUS BUSINESS SCHOOL who is willing to share his vast knowledge on investment.

Tae Yong Shim started the lecture by giving information about what coronavirus is and what caused the pandemic. Generally, the virus was transmitted via droplets and symptoms range from flu to severe pneumonia. Tae Yong Shim stated that more than 109,527 people globally have died from COVID-19 and more than 1.7 million people have been infected.

As in Indonesia, more than 373 deaths have been confirmed, creating a 10% mortality rate. From the data gathered, Tae Yong Shim declared that the COVID-19 massively affected the Indonesian middle class and above, but not the lower class. In the investment sector, foreigners have been selling government bonds as well as equities due to the COVID-19 cases in Indonesia.

To prevent the spread of the virus, Jakarta officials have declared PSBB (de-facto lockdown) which weakens the social-economic growth as the business operations are restricted. The three main business sectors that have been affected negatively, according to Tae Yong Shim, are manufacturing, tourism, and retail. The free fall price of oil has also affected the global market, creating a significant rise in distressed bonds.

Tae Yong Shim categorized the COVID-19 as an unquantifiable risk to the global economy. It means the investments will go down if more people sell and the investments will rise if more people buy. It is more difficult to avoid risks and calculate profits. “Prices have come down to a very attractive level and if you are a retail investor, you might want to actually take this opportunity to invest in high-quality stocks,” advised Tae Yong Shim. Such high-quality stocks include BBCA, BBRI, and PGAS.

To survive the pandemic, an investor must be a futurist, able to foresee the potential of newer stocks or companies that may thrive during and after COVID-19. That is the key message that Tae Yong Shim presented during the webinar. Part of the smartest investment strategy during the COVID-19 is looking at the most profitable business sectors right now, including data usage (Indosat, XL Axiata), entertainment (MNC, Netflix), and online applications (Zoom).

After the presentation, the Q&A session started, moderated by Dewi Tamara (Deputy Head of Program of MM Executive). One question about cost-cutting and layoffs on most Indonesian companies caught Tae Yong Shim’s interest, in which he replied that if the cost-cutting and efficiency methods may decrease the revenue growth, then it is best to not do it as it will drive foreign investors away.

One last message that Tae Yong Shim gave during the webinar is for investors to save some money after purchasing daily necessities and start investing in mutual bonds or bonds, whichever suits their needs. Concluding the online public lecture, let’s be a futurist investor. Start by saving money, focusing on long term investment, and always analyze the risks and profits.