Valuations amidst the COVID-19 pandemic & significant economic uncertainties

The COVID-19 pandemic has affected our lives in different ways. This multi-faceted crisis has resulted in widespread macroeconomic uncertainty and significant volatility in the global financial markets. Global equity markets over the past months have experienced significant swings as economies implemented lockdown measures, supply chains were disrupted, and many businesses were fundamentally impacted. The eventual long-term shifts in consumer spending patterns, supply chains, and how businesses engage their customers remain to be seen.

Overlapping and intertwining with the COVID-19 pandemic are also significant volatilities in commodity prices, as seen when the price of crude oil futures turned negative for the first time in history in April 2020. Amidst these uncertainties, the fair values of many assets and liabilities have changed significantly. In fact, some businesses and sectors have experienced growth while others have been negatively impacted.

At KPMG, we strive to provide insights that can assist our clients to navigate these challenging times. While the consequences of the current crisis are still evolving, we have prepared various perspectives on valuations during this period. In this special brief, we will discuss the following:

• An overview of the global equity markets and sectoral impact
• An overview of the Singapore equity market and sectoral impact
• Impact on private equity valuations
• Application of valuation approaches