The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Plain and simple - equities being hit on a global basis as we don’t yet fully understand Coronavirus
Kier and similar infrastructure companies may be impacted by a reduction in government funds if the government but on hold infrastructure spending to fight Coronavirus
Why thank you for noting my standing lol. Its just my opinion and we have seen fear like this before blown out or proportion and impacting us all. Im not saying its 100% wrong but the figures as they stand dont hold out to the level of fear at thi point. Yes we should be prepared. But 3000 dead worldwide - doesn't concern me personally as much as it does the media (my hate of which probably doesn't help) but yes indeed - lets re visit this in a week see if we are at 300k dead worldwide (which i doubt)
We Proffessor Chuggley, I'll mark this one for 'revisit in a week or so', the experts seem pretty concerned that this could overwhelm the NHS in the same way that South Korea had been overwhelmed.
They have warned that nothing is off the table including significant social and economic impacts
3000 dead so far worldwide. Last season over 1600 dies of the flu alone in the UK
Drawdown - my personal opinion is that there is little doubt that recessionary trends are now firmly established. For the UK I think thsat we were heading for recession in any case & are probably now to all intents & purposes, in recession. But governments are there to manage the situation as they find it. FDR dragged America out of the depression with an infrastructure blitz & the temptation will be to do the same. Governments can borrow in circumstances where individuals can not. What is more they can borrow long-dated at low coupon. Companies benefitting from infrastructure may well be one of the few places to prosper if serious recessionary conditions take hold.
Lignum not sure about your logic. The Chinese economy has collapsed into recession according to latest data, austria has said it will be severely revising down its economic forecast due to coronovirus shortly, the UK will presumably follow, economists have in any event been calling for the UK chancellor to raise taxes (difficult in the current environment) in order to fund it's spending plans, talk is the UK may be downgraded by the credit rating agencies, etc. All this will tend to constrain the governments capital spending ability.
I eo not think that investors should panic [although panic is not necssarily irrational], but nor should investors be complacent.
The point about coronavirus is that it is new, it derives from the animal world, there is no immmunity within populations from previous infections & there is no certainty that it will not mutate.
The big problem for the world economy is that this is happening at a point when a long standing bull market is long in the tooth. And there will undoubtedly be an economic impact - quite how large remains to be seen.
But the question here is whether this in unduly negative for Kier. The time hounoured policy response in times of steep economic stress is infrastrucure spending - particularly when governments are able to borrow low &long. So, in my opinion, the prospects for Kier remain positive over the short & medium term.
Yes sure all that you state is correct, however, US futures are showing gains of 230 points as is FTSE futures showing 130 points gain for Monday morning start, so yes there's a problem but is it really as bad as say a flu virus which effects millions each year, so let's put this Corona virus into a little perspective - fingers crossed.
"but why not take the view that it will be contained "
Because the evidence is pointing towards a very similar trajectory to that of South Korea and Italy, ie double figures this week, treble figures next week and quadruple figures the week after.
Since your post 3 more cases I believe? And there is at least one case whereby the source can't be traced. So it looks as though the containment phase has passed.
Kier is in good shape. HS2 will happen both phases - it's carbon reducing over it's life span and essential for UK plc. K.L. will bring value to the Group - who ever or which ever way you cut the cake.
The virus is a unknown for all companies and the economy but why not take the view that it will be contained and play out naturally like most of these things. I'm certainly not selling any of my shares.