Retail Savings and Investments in France - Coronavirus (COVID-19) Sector Impact

Summary

The Coronavirus (SARS-CoV-2) outbreak, dubbed COVID-19, is first and foremost a human tragedy, affecting millions of people globally. The contagious coronavirus, which broke out at the close of 2019, has led to a medical emergency across the world, with the World Health Organization officially declaring the novel coronavirus a pandemic on March 11, 2020.

Fears surrounding the impact of COVID-19 have already significantly impacted the global economy, with key markets across the world losing 20-50% of their value for the year to date. Many economists and institutions have cut their forecasts, with consensus global GDP growth currently at 2.6% for 2020 and many experts predicting the potential onset of recessionary environments.

A similar trend could be seen in France, as economic growth in the country registered a dip in the first quarter of 2020. With the government starting to ease lockdown restrictions from May 11, 2020 - allowing non-essential businesses to operate - a gradual recovery in the economy has been seen, which will have a positive impact on the wealth industry.

This report focuses on the impact of the coronavirus outbreak on the French economy and the country’s retail savings and investment market. It also highlights the measures adopted by the government to combat COVID-19. Based on our proprietary datasets, the snap shot contrasts the publisher's pre-COVID-19 forecasts and revised forecasts of total retail bond, deposits, equities and mutual funds holdings in terms of value and growth rates. It also analyses the effects on HNW wealth, examining the importance of different industries as a contributor to HNW wealth.

Scope

• French retail savings and investments are forecast to contract by 0.8% over the course of 2020 as the economy came to a standstill thanks to the impact of COVID-19. Retail equity and mutual fund holdings are expected to take the brunt of the economy’s slowdown, with respective declines of 21.6% and 8.4% anticipated.
• Retail deposits and holdings are set to fare better than initially expected courtesy of a flight to safety away from risk assets as well as a move away from cash holdings. Despite low returns, deposits among individuals in France are preferred due to the stability and liquidity they provide. However, more pronounced declines in risk asset holdings have resulted in a 2020 forecast for total retail holdings that is 2.0 percentage points lower than predicted before the onset of COVID-19.
• The effects on the different segments that make up the HNW market will be disproportionate. The hotels, restaurants, and leisure sector will be hit hardest given the ongoing lockdown. However, the sector only contributes 2.3% to total HNW wealth. The publisher also expects strong declines in the manufacturing sector, given that factories are running at lower capacity. However, as factories start to reopen with the easing of lockdown restrictions, we will see a gradual revival in the sector.
• Following the lifting of lockdown measures, the retail, fashion, and luxury goods sector registered significant growth in terms of total wealth generated, as the affluent indulged in “revenge buying” after spending months indoors. This tendency is likely to boost the market towards positive growth in turnover by the end of the year.

Reasons to Buy

• Make strategic decisions using top-level revised forecast data on the French retail savings and investments industry.
• Understand the key market trends, challenges, and opportunities in the French retail savings and investments industry.
• Receive a comprehensive insight into the retail liquid asset holdings in France, including deposits, mutual funds, equities, and bonds.