Coronavirus, And What’s Next?
As you may all know, news spreads as quickly as Covid-19, a.k.a. Coronavirus. From Wuhan to Codogno, cases are piling up. More than 80 thousand positives are recorded, with China (77785), Japan (851), Korea (922) and Italy (272) taking the lead respectively.
What are the “potential” consequences of this virus outbreak ?
The world is witnessing a decline in overall GDPs. The stock markets are plunging (-3.5% for S&P500, -5% for FTSE MIB) due to an underestimated impact of fear on earnings.
Many industries are hit, especially those that are in a way or another related to the Chinese market with a highlight on: Tourism ($ 30 billion loss in revenues for airlines), Petroleum (2% prices decline due to lower Chinese demand), Consumer goods, Education (US hosting the highest number of Chinese students) and Banking (Surge of bad loans coming from small Chinese businesses’ tight margins).
Moreover, cancellation of big events has been recorded, events such as the giant tech conference MWC, and this might lead to worse (Cancellation of Olympic games).
Finally, the escalating fear has shown itself through implicit stigmatization towards Chinese (i.e. coffee shops ban, Anti-Chinese caricature…).
What are the “possible” opportunities of this outbreak?
Even though negative consequences obviously outweigh the positive ones, some opportunities appeared in specific industries.
The first winner is the medical industry which has received an increasing number of orders of masks, sanitizers, medical devices… of which prices are rocketing dramatically.
As far as transportation is concerned, the airlines are suffering, but on the other hand, private jet demand is growing.
In China, entertainment and education industries are blooming due to an increase in demand by those who are in quarantine. Moreover, China, as a growing consumer of pork meat, has seen its pork producers’ shares jump by 160 percent. International meat demand has also grown at an unprecedented pace.
In order to reduce unnecessary commuting, employers have encouraged people to telework resulting in a rising demand for digital teleworking tools.
Besides of that, there is a surge of new ideas to cope with the virus, i.e. contactless deliveries, sales of “coronavirus bonds” to Chinese state-backed banks for projects aiming at combating Covid-19.
This virus should not be underestimated because it is and will continue to be a threat to humanity. The numbers are climbing every day. However, panicking will only lead to further damages. Do not be scared and take it as an opportunity to get informed and educated on the prevention.
Meanwhile, it is the occasion to spend time with your loved ones, to cherish your well-being and to give support to those who are on the front line! Jia you !
