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Delta: our 2020 credit-sector outlook

21 ^st January 2020

From electric-vehicle sales to US pharmaceuticals and the strength of European banks, our credit analysts provide their 2020 outlooks for industry sectors.

In episode 8 of Delta, Andrew ‘Jacko’ Jackson, Head of Fixed Income at Hermes, speaks with six analysts in the liquid-credit team about the fundamental and technical drivers for the sectors they cover. Insights include:

“Auto manufacturers need to change their platforms, their technologies – the way they make a car” as they adapt to the electric-vehicle megatrend, says Ilana Elbim, Senior Credit Analyst. “And this is weighing on their balance sheets.”
In the energy sector, “companies that can survive the lower-for-longer pricing environment in the natural-gas market – those with lower costs, secure debt capacity, and which have assets to sell to pay down debts,” will be more attractive to credit investors, says Audra Stundziaite, Deputy Head of Credit Research.
Filippo Alloatti, Senior Credit Analyst, says: “I do not possess a crystal ball to tell you what will happen in 2020, but I do expect some consolidation among banks in Europe – at least at the local level, because growth has been so anaemic."

Credit markets have rallied strongly at the outset of 2020 – find out what might lie ahead.

Tune in to Delta.

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Andrew Jackson

Head of Fixed Income and Lead Portfolio Manager

Andrew joined the international business of Federated Hermes in April 2017 as Head of Fixed Income. He is responsible for leading the strategic development of the Credit and Direct Lending investment teams, and developing a multi-asset credit offering capable of accessing all areas of the global credit markets for pension funds and other long-term institutional investors.

Andrew joined from Cairn Capital, where he was Chief Investment Officer. In this role, Andrew was responsible for the development of the asset management business, which included designing new products and managing the investment teams, including strategy, portfolio management and research. He has managed assets across the spectrum of global credit and fixed income. He was previously vice president within the European credit structuring team at Bank of America and has held roles with Fitch Ratings and PricewaterhouseCoopers. Andrew holds a BSc degree in Mathematics & Theoretical Physics from Kings College London.

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