Since the outbreak of the Covid-19 pandemic, a lot of things have changed across the world. Of course, the pandemic was followed by curfews and lockdowns in various countries. Some businesses were closed when they couldn’t sustain their operations. Most of those that survived lost their profits and earned little to only keep the businesses running.
It’s unfortunate that most of the small economies have been struggling to meet their budgets and have experienced shortages in medical supplies all along. With some going into heavy borrowing, we cannot assume that large economies like the UK and the US weren’t affected. The disease wasn’t selective and still, it isn’t.
Among the sectors of the economy that were hit most by the pandemic are and business. Different countries gave travel advisories to their citizens and limited air as well as rail travel. Ban of international flights by various governments, limited movement of tourists and business travels.
In the United Kingdom, enforcement of Covid restrictions affected the economy too. Investors were reluctant to buy shares from most companies which saw some companies slashing their stock prices. This was evident among England’s travel and hospitality firms whose share prices were seen to decline drastically. This was after the imposition of the Lockdown as a way of curbing the spread of Covid-19.
Fortunately, some restrictions that were set to guide operations in the London stock market are set to ease from Amazingly, the prizes of travel and hospitality companies’ stocks started increasing immediately Boris Johnson the Country’s Prime Minister announced the government’s plan to end the lockdown.
England’s economic recession has been the worst in more than 300 years. However, there is rising hope for a rapid economic recovery in all the sectors of her economy. Since the announcement of the plans to reopen the economy some of the hardest-hit companies have recorded big gains as they wait for activities to return to normality. The most affected businesses were food and drinks outlets at the airports and railway stations, hotels and travel firms, and airlines.
Stocks in travel companies and airlines rose after a shocking increase in holiday bookings. This came after the government announced a possible Johnson’s announcement that the government was planning to allow international freights from 17 May. However, he was very clear that the decision was subject to a government review.
EasyJet a UK-based airline confirmed that flight bookings from the country shot by over 335%. According to the company’s management, package holiday bookings went up by more than 600% compared to a week earlier. They said that Alicante and Palma in Spain, the Greek island of Crete, Malaga, and Faro in Portugal were the top destinations for their bookings. Most of the bookings were for the August breaks followed by September and July.
TUI which is a holiday travel firm had its shares rising by 3.5% while the International Airlines Group shares rose by about 2% before closing the day. The Cineworld Company gained 9.5% hoping that cinemas will resume in May as reported by Johnson. SSP Group stocks increased by 17% because investors were hoping that sales at the company’s Caffè Ritazza and Upper Crust stores will go up immediately the commuters and holidaymakers return to railway stations and airports. Bingo which is a specialist Rank Group had stock prices moving up by 6%.
Another company that benefited from the announcement is C&C Group. The cidermaker jumped 9% in share value because investors hoped to have outdoor drinking resuming this April and the indoor hospitality to resume on 17 May. Premier Inn almost covered the losses they had made during the pandemic. The pub chain JD Wetherspoon was able to reach levels they had seen about a year ago within a day!
Investors were also demanding shares from property companies with retail assets and big offices. A company like British Land that owns Drake Circus and Meadowhall shopping centers was the highest riser with more than 5% increase. British Land also owns the magnificent Broadgate office in London City. The Land Securities company which owns the Bluewater mall was up by over 4%. This company has an office in London city too.
The UK government is also reviewing whether to make changes to the work-from-home guidelines it had issued previously. If this will come to happen, it’s expected in June.
Richard Morawetz the Moody’s rating agency vice-president argued that ease of Covid-19 restrictions would boost income for various companies. This is under the assumption that the decisions won’t be reversed. Companies that rely on free movement (tourism and leisure activities) are expected to reap more when the lockdown ends. He went ahead to say that rollout of the Covid vaccines would boost that were affected by the lockdowns in the country.
Do you know that there were lockdown beneficiaries? All these had a “bad day” after the celebrated announcement. To them, the winds had turned against them. In the financial markets, the FTSE 100 reached 6,625 which is a 0.2% increase. Additionally, the FTSE 250 reached 21,057 which was a 0.4% rise. The pound managed to rise by 0.3% against the USD and traded above $1.41. This was a great record for the first time in three years. All these were highly influenced by the optimism over the country’s vaccination program and growing hope for a speedy economic recovery.
Finally, we cannot forget that Wall Street experienced a drop in shares in tech companies. This is attributed to the fear of valuations rising exceptionally after a great performance last year. Again, there is a projection of looming global inflation as different economies recover from the Covid-19 recession.
Among the biggest losers at some point was Tesla. A drop in the value of Bitcoin further lowered the value of Tesla’s shares. The company has invested $1.5bn in Bitcoin Cryptocurrency. At some point, Bitcoin value reduced dropped by in a day. At this time, it was priced below $50,000 from a previous record of $58,000.
