Dramatic growth in working from home, self-isolation and increased healthcare spending are among the trends which are helping a number of businesses weather the significant storm better than others.
Supermarkets are one of the few sectors to have enjoyed increased sales in recent weeks as panic buying continues to see stores significantly busier than usual. Despite heavy falls on the wider market, shares in Sainsbury’s are marginally up on levels seen a month ago, driven by stockpiling by customers.
Online electrical goods retailer AO.com and John Lewis have reported sales of freezers rising by as much as 300 per cent as households look to stock up on food.
With more people staying at home, online food delivery sales are also up 11.5 per cent this year and shares in streaming service Netflix are trading higher than in January.
Water group United Utilities reports on trading later this week and Nicholas Hyett at Hargreaves Lansdown argues the impact of self-isolation and home-working means it should be able to weather the current market storm.
“Customer demand for water is unlikely to change much, and might even go up as people spend more time at home,” he pointed out.
Tech and healthcare on the up
With the significant growth in home working, online productivity tools are also seeing increased sales. Shares in the Nasdaq-listed video conferencing company Zoom have more than doubled in recent weeks and Workplace chat app Slack has outperformed the market.
Firms with exposure to the healthcare sector are also likely to benefit from increased spending.
Paul Swinney, chief executive of Aim-quoted antibacterial products firm Tristel, believes that the coronavirus will prove to be a “powerful influence on global healthcare systems for greater investment in infection prevention and control”.
A raft of pharmaceutical companies, including GlaxoSmithKline, are involved in potential vaccine development and positive newsflow could prove to be catalysts for share price gains in the months ahead.
Nigel Green, founder of financial advisor deVere, argues that although the world is heading for a deep recession, there will also be opportunities from the recovery.
“Every recession produces a new world. The coronavirus can be expected to speed up the so-called Fourth Revolution which is fuelled by new technologies such as AI (artificial intelligence) and supercomputing. New industries will emerge and there will be winners and losers,” he said.
“This will lead to job losses in some sectors and huge, possibly unprecedented, opportunities in others.”
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