The COVID Diaries: investor 3

The following interview is with an Australian-based fixed-income investor. It was conducted on 22 April 2020.

Do you feel you have adapted to working from home and how close are you to business as usual – personally and in the sense of market functionality?

I work part-time. The market is not aware of that and, obviously, the market is not part-time, so I am fairly used to keeping an eye on the market when I am not in the office anyway. It hasn’t been a difficult transition for me.

On the other hand, I was saying to everyone at work earlier that I miss them. I miss my colleagues – and I am not even a people person! So I guess it is having an impact on me.

We have been working from home for six weeks across the organisation globally. We are really lucky that all our systems are cloud-based. In the weeks before we were directed to work from home our team switched to Microsoft Teams, and that has been fantastic to bring the team together with chat, video and meeting capabilities. We have been having virtual drinks on Friday afternoons and HR has been fantastic with wellness tips and webinars with health experts. My desk facilities are probably better than the office, too.

I feel like we are fairly business as usual from an operational perspective. Our location means we are used to dialling into investor calls. Having all issuers present over the phone is a good learning opportunity for people to adapt their presentation styles.

As far as market functionality goes, liquidity in Australian dollars tends to dry up pretty quickly whenever there is a market stress event. Price discovery has been difficult – more so than what we are seeing offshore. It means we have to be comfortable with our positions, understand credit fundamentals and have done our full analysis upfront.

At the start of this crisis, we spent a lot of time double checking fundamentals: how are issuers going to pay us back? What does their balance sheet liquidity look like? We were pretty fortunate that we were positioned with long duration and fairly neutral credit. We were in a position where we could assess what industries and names it makes sense for us to add to if spreads blow out.

Market functionality is starting to get better, though. I have been doing a bit of work in the semi-government market and, with the RBA [Reserve Bank of Australia] providing support in the secondaries, things are normalising as far as bid-offer spreads go. We are seeing issuers being able to print and tap their lines.

On a personal level, I don’t have children so I don’t have the struggle that some of my colleagues and our peers have when it comes to juggling home schooling. We also have enough space in our home to have a dedicated work area each, but the delineation between work and home has been difficult. I’ve probably worked harder than during the global financial crisis and switching off is challenging when you are home-based.

The other thing is that I have under-appreciated is how many of my neighbours are in the early stage of learning a new musical instrument. There is a banjo player, a clarinet, a violin and a recorder – we think! – near us so the noise-cancelling, hands-free headset has been a godsend.

“I was saying to everyone at work earlier that I miss them. I miss my colleagues – and I am not even a people person! So I guess it is having an impact on me.”

Has your view of the crisis and the nature of the challenges it presents changed? It seems Australia has prioritised public health over the economy, at least in the medium term. How are you thinking about that trade off?

I’ve always hated shopping – except for Bunnings. So I have always avoided the shops.

I am not a hoarder but I do go to Costco because I can buy the brands I like in bulk which means I don’t have to go shopping as often.

At the moment, we are shopping for ourselves and elderly relatives as well as a neighbour that cannot leave home. It is really uncomfortable going to the supermarket; it is quite a strange experience. People are really scared of each other – I hope this is not a permanent change.

Personally, I am hoping to take the opportunity to slow down and get back to what really matters in life. I don’t think I am there yet. We are having a bit of fun as a family. We had a nephew that turned 18 last week, which was pretty sad in the circumstances, but we had a Zoom party for him. We have family Zoom drinks and all that stuff as well.

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?

I don’t have a problem with where the government is coming from but I am a little less optimistic. Some countries have lifted measures or have not gone into lockdown as strictly as Australia and they have started to see second waves.

I think this will drag on longer than we expect and the government will probably be influenced by what we are seeing coming out of Singapore, Korea and Sweden. I cannot see us getting back to the office any time soon.

How do you think things will be different when we get back to normal? What changes can you see to work practices, social changes and the economy?

I am expecting some permanent changes to our working practices and so is management. We have always had flexible work arrangements but I think we will see lots more people take advantage of them.

Through this crisis people have proved that working from home is possible for a lot of roles – and this will open employment opportunities. I am hoping one positive outcome from this crisis is opening employment doors for primary caregivers as well as those who are less able to travel to the office.

We have been asking people what they have been reading relating to the crisis but we think everyone has seen enough by this stage. What are your entertainment recommendations for lockdown?

Gardening. We have been moving plants around and making sure they are alive every morning and watering them. It has been my form of exercise. We are also getting out of the cooking rut into some new recipes.

We are not really television watchers. I bought my television with my first ever bonus – it is 18 years old and you can’t actually read the writing on the screen anymore. We just don’t watch it.

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