November 30, 2020

Health and technology, the least affected sectors in the stock market by the pandemic

The health and technology sectors were the least affected by the pandemic in March, in a context of economic paralysis due to the expansion of the coronavirus, which has yielded almost all the values ​​of the main indicator of the Spanish stock market, the IBEX 35, with falls monthly that in some cases touch 60%.

In a telephone meeting with the media held this week, the general director of Investments of A&G Private Banking, Diego Fernández, stressed that “we will come out of this crisis with some lessons learned” and that governments will increase investment in healthcare.

On the stock market, pharmaceutical companies are among the least affected by the spread of the pandemic. Grifols, the only one listed on the IBEX 35, posted a 7% rise in March, while PharmaMar posted a 10.78% advance.

PharmaMar is waiting for next week the authorization of the Spanish Medicines Agency to start testing its drug Aplidin in humans suffering from coronavirus.

For its part, Novacyt, the French company that launched a specific test to detect the coronavirus in early February, has appreciated more than 1,000% since the end of January.

Regarding technology, Fernández pointed out that this period of confinement “has forced us to throw down mental barriers” such as that of teleworking.

An example is the evolution of Zoom Video, an application to make video calls that allows a maximum of one hundred participants, which is why many companies have used it these days to meet.

Since the end of January, its shares have appreciated almost 130% and sold at around $ 159, from $ 70 to those that were exchanged before the expansion of the coronavirus.

Furthermore, as recalled by a report by asset manager Candriam, the 2003 SARS outbreak was a “major” boost for the adoption of online shopping and for the rise of Alibaba in China.

In comments to Efe, M&G Valores analyst Nicolás López added that the food sector is one of the most defensive, since “we are going to continue buying food”. López cites Viscofán as an example, who dodged losses and rose 3.06% last month.

Likewise, the food distribution company Dia, which is listed on the Continuous Market, rose more than 33% in March.

However, López explains that, although no value of the IBEX 35 has managed to recover or exceed the highs of February 19, there are notable differences between them since the expansion of the pandemic has not affected all companies in the same way. .

The chief investment officer of A&G added that the stock market “will not touch the ground until the contagion figures improve”, since these data, especially in the United States, have a great impact on investor sentiment as it is an issue “personal and emotional”.

One of the most affected companies is the airline group IAG –integrated by British Airways (BA), Iberia, Vueling and Aer Lingus-, when it lost 58% in March, due to the fall in demand due to restrictions to stop expansion. of the coronavirus.

The financial sector, sensitive to the economic outlook, closed March with losses of 40%, as did other cyclicals such as stocks linked to raw materials, such as ArcelorMittal, Acerinox and Repsol, according to XTB analyst Joaquín Robles.


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