Mohamed Mansour Issues Warning About ‘Distorted’ Stock Markets
Stock valuations have been inflated by Central Bank interventions and public sector stimulus programmes and in general are not reflecting the true scale and impact of the Covid-19 crisis, according to Mr. Mohamed Mansour, Co-Chair of the Mansour Group, the global conglomerate.
In an interview for the Mansour Group’s podcast series, the Mansour Voice, Mr Mansour said that stock market rises could give investors a misleading impression of how the global economy was fundamentally performing.
“The S&P 500 has hit a new peak despite the poor health of corporate America. The Nasdaq is performing just as strongly in 2020 as it did in 2019, and there seems little end in sight for that particular bull market. This is all occurring of course at a time when tens of millions are unemployed in America and Europe and during an unprecedented downturn,” he said,
“Of course, Central Bank interventions are a major factor, and as we know from past crises, can have a distorting effect on these things that can take a long time to unwind or be corrected.”
Mr Mansour, who was an early-stage investor in technology companies like Facebook and Spotify, revealed in the interview that he has divested many of his equity positions and currently is holding only a small number of large tech stocks. But he remains bullish about the IT sector generally and continues to invest in start-ups through his California-based venture capital firm, 1984 Ventures, and the Mansour Group’s family office investment business, Man Capital.
He added: “There are some other notable areas of risk and uncertainty. In the US, the presidential election will have a huge impact on global trade as well as issues relating to climate change. In the UK, it’s a smaller issue but Brexit will have potentially negative impacts for the British and European economies at a time when the region is already struggling to recover from the pandemic. And this is even before we consider the risk of a second global wave before a vaccine can be found and rolled out. So there are big challenges in play.”
At the same time, Mr Mansour emphasised in the interview the strong performance that a number of units of the Mansour Group are reporting for 2020 to date, including its businesses in the automotive and heavy equipment and machinery sectors, Al-Mansour Automotive and Mantrac respectively.
The Mansour Group is a global, family-owned conglomerate with over 60,000 employees, a presence in more than 100 countries and total revenues exceeding $7.5 billion. Its businesses operate across a large range of sectors including automotive, banking, consumer goods, education, healthcare, machinery & equipment, media, oil & gas, real estate, technology, and transport and logistics.
The Mansour Voice podcast is available to download from the Mansour Group website as well as Spotify, Apple and other podcast platforms.