Experienced Investor
Cleaning firms and online grocers see share price rise over coronavirus fear
Coronavirus has wreaked havoc on global markets as nervous investors pulled their money out. But there are a number of firms which have benefited from the outbreak.
Markets were a sea of red last week as coronavirus claimed further victims and the pandemic spread to more areas of Europe.
More than £1.5bn was pulled from equity funds in the last week of February, helping markets suffer their worst week in more than a decade.
However, 14 companies in the FTSE 350 actually saw share price rises amidst the global market sell-off. And it’s no surprise to see cleaning suppliers and supermarkets offering home delivery benefit as customers seek to protect themselves and stockpile food.
Laura Suter, personal finance analyst at investment platform AJ Bell, said the FTSE 350 has rebounded from the sharp falls but it’s still around 8% down from when the volatility began.
She said: “While the vast majority of companies in the index have seen their share price fall during that time, 14 companies have managed to rise during the turmoil. A large number of these are set to be beneficiaries of the coronavirus spread, from cleaning supply companies to more trading firms that profit from increased investor activity.
“Shares in online trading platform Plus 500 are up 16% during the global market sell-off as investors think it will benefit from wild swings in share prices, creating an environment favoured by people trading the markets. The more trades, the more commission and financing fees earned by Plus 500.
“Another beneficiary is business supplies company Bunzl, which has risen by 2%, outperforming the market thanks to forecast-beating earnings and an upbeat outlook for this year. Among the products it supplies are hygiene and medical items, including masks and gloves, which have been in high demand since the virus outbreak. In a similar vein, while Rentokil is better known for its pest control services it also supplies hand washing and hand sanitising services and so is expected to have seen a pick-up in demand.”
Suter added that online grocer Ocado has risen 1.5% and Sainsbury has risen 1%.
“Investors clearly think both will benefit from people stockpiling food or buying up cleaning supplies, as well as fewer people choosing to go out to eat. With Ocado there may also be an expectation they could see a pick-up in online orders if people avoid physically going to the shops,” she added.
