Even though more regulation looms for the two giants, their businesses enjoy scale, feedback loops and network effects. “It’s a matter of how they are regulated rather than if they are regulated,” Barrett said. “Regulatory disruption is already priced into [these stocks].”
International fund manager Chris Thomsen said he saw parallels between today’s pandemic and the SARS epidemic, which he lived through in Hong Kong in 2003. He recalled taking a flight from Hong Kong to Johannesburg, South Africa, on a 747 in which he was one of only two passengers.
In both the technology and pharmaceutical industries, Thomsen believes China and a number of emerging markets will display a surprising amount of innovation in the next 10 years. By 2030, China is likely to be producing many global blockbuster drugs.
Another trend he expects to unfold is the mobile wallet. Mobile payment penetration is 35% in China and 30% in India. In contrast, it’s only 9% in the U.S. and 7% in the U.K. “The digitization of daily life is here to stay,” he said.
Telemedicine is likely to be a major beneficiary of the pandemic. Frank expects this young health care delivery format to grow at a 21% annual clip from $46 billion in 2019 to $176 billion in 2026.
Health care awareness is also likely to expand. “People are becoming more conscious and mindful of diseases,” Frank noted.