Darlene Pasquill is Head of the Americas Equity Division at Mizuho Americas. We recently spoke with her to learn how her team has adapted to the COVID-19 pandemic, and what she sees ahead for the equity markets in 2021.
1. How has your department fared during the pandemic?
Generally speaking, we were very well positioned during the pandemic. Our firm and the EQ department was fortunate to have recently moved offices to our new headquarters before being required to work from home. We had a stockpile of leftover technology and an extremely responsive IT team to facilitate remote working. Our infrastructure was already aligned to our “virtual working needs,” enabling us to service our clients during the pandemic. Our IT department and all of our employees are extremely entrepreneurial. Change is something we've really mastered here at Mizuho, which is critical for us to continue to grow our businesses.
From a support perspective, Mizuho has been supportive in encouraging our employees to prioritize their own health and safety and to take time off when needed, understanding the personal and family stress during the pandemic. When we initially transitioned some of our employees during Phase I and II of “return to the office,” our COO team introduced software to help track people’s locations and allow for quick contract tracing in the event of an outbreak. We implemented protocols that require people to wear marks everywhere on campus except when sitting at their desks, to stay at least six feet apart, and asked employees to let their managers and/or our COO know their work locations to keep us all safe.
We are a professional services firm, and people truly are what kept our business running. Everyone at Mizuho from the top down worked tirelessly ensure that things functioned smoothly and employees had what they needed to operate effectively.
2. The pandemic has created a level of market volatility we haven’t seen in more than a decade. How is your management team helping younger talent navigate conditions that they’ve never experienced before?
Helping people who are newer to the business understand today’s volatility is all about communication. We make sure supervisors are engaging with every person who works on their team, not only by phone, but by encouraging face-to-face interactions on Zoom and, where possible, in person (socially distanced with masks). You really need to see the person and talk with them one-on-one so they don’t feel that they’re alone out on an island.
We also want them to understand that the right amount of volatility can be good for the business. When volatility goes up, you get a lot more secondary trading, which is good for the top line. A large stock run-up in stock prices is an opportunity for a Fund Manager to sell stock positions and likewise, a large sell-off is an opportunity for fund managers to initiate new positions.
3. What have been the top market trends in 2020 and how do you see things evolving in 2021?
We've seen tremendous growth in secondary trading volumes because of higher volatility, but we’ve also seen equity capital markets (IPO’s and secondary offerings) increase dramatically. Looking ahead to 2021, I think we will continue to have a very robust equity capital markets pipeline. In March of 2020 and beyond, as COVID was ramping up, we benefited from companies raising capital in advance of shutdowns. I think we’ll see a continuation of some of that in 2021. We expect nice growth in equity capital markets, in corporate equity derivatives, and the other businesses that we participate in. There's still a lot of share for us to gain.
This year has also had its fair share of tech IPOs and we’ve seen a lot of disruption in other industries that’s resulting in new business formation. Much of the disruption we're seeing began 20 years ago and has simply accelerated because of COVID. Technology will always continue to evolve and I don't see anything stopping its growth or technology’s ability to disrupt different business models.
4. Many people have used the pandemic and lockdown conditions to try new things and better themselves. Have you pursued any new hobbies during this period?
I am an avid fan of American History. Working from home gave me the opportunity to read more, have more family dinners, and exercise more outside when I was out of the city and did not have any commute.
5. Speaking of American history, the ‘Roaring Twenties’ of the last century featured a hot stock market after the world emerged from a long pandemic. Do you think history might repeat itself—with a new roaring twenties coming after the COVID-19 pandemic?
We've seen strong stock market gains already in 2020. We're still in the middle of a pandemic with the S&P 500 up ~12% and the NASDAQ up almost 36%. In terms of GDP growth, I leave that to the political experts because it depends on the policies that the next administration puts forth. Those policies will help determine if we have strong GDP growth, which often drives market returns.