RE: Price28 Feb 2020 11:37
Reece - agreed on the cheap shares, got a tiny top up at 8.2p - cheapest i've had since late May 15.
Would like the RNS to come when the market has calmed down a bit, not too bothered about the starting price, would just like broader sentiment to be a tad more bullish.
It's not the virus per se that's caused the issue. for a start all risk assets have been hugely bid up over the past few months (and all of 2019 in fact). there is a wall of money in search of yield and equities have benefited from this. This means that equities have found their way into the hands of those that are not natural holders. So when there is a risk off, risk gets dumped blindly as some holders are not as comfortable with them.
The virus it's self may kill a few thousand people (very sad, but people die all the time) but it's the reactions of the authorities that impacts the markets. if the west starts closing down borders then there will be a material hit to GDP. on top of this. we're very late cycle and this could conceivably push us into a US and European recession. That's the fear. on top of this, many inefficient companies have not gone bust over the past few years due to historically low borrowing rates that have kept them alive. if they have a relatively small hit to cash flow from this virus there could well be defaults on bonds and that can have further contagion.
all IMO, off to have an early lunch