The majority of credit portfolio managers believe the world will mostly recover by the end of the year from the COVID-19 crisis and the near-shutdown of the global economy, according to the first-quarter survey from the International Association of Credit Portfolio Managers.
Fifty-six percent of surveyed managers believe the recovery will take place before the end of the year, while 44% believe the recovery will take place by the end of June 2021 or even later.
The difference of opinion is not surprising, said Som-lok Leung, IACPM's executive director, in a telephone interview.
"Obviously, the world will recover," Mr. Leung said. "The issue is when and how fast, and it's not surprising to see a difference of opinion. There's so much uncertainty, and there's a lot (of difference) that's regionally oriented."
Not surprisingly given the coronavirus pandemic, 90% of surveyed managers believe corporate defaults will increase globally over the next 12 months, while 10% believe they will stay at the same level, and zero believe defaults will decrease.
A quarter earlier, before the extent of the pandemic's impact could have been known, 48% believed corporate defaults would increase globally over the next 12 months, while 47% believed they would stay at the same level.