UK-listed firms affected by virus outbreak
The outbreak of coronavirus in China and beyond battered stock valuations across the globe last month. And while Europe and the US have staged a recovery in recent days – helped yesterday by unconfirmed reports from China of a potential treatment for the deadly disease – Asian stocks are still struggling and global markets remain fragile.
However, while few investors benefit from global panic, several companies listed on the Alternative Investment Market have benefited from the stock exchange thanks to their potential roles in tackling the virus.
The Sunday Times last weekend reported that Irish company Open Orphan is on call to play a role in the fight against the spread of coronavirus from the Wuhan region of China.
The pharma services firm, which began trading on Aim in June last year, recently completed the acquisition of British quarantine company hVivo.
hVivo owns a 24-bed quarantine clinic, ordinarily used in vaccine trials, attached to St Mary’s Hospital in London. The Sunday Times reports that this is the largest commercial quarantine clinic in northern Europe.
Open Orphan’s share price is currently trading at around 6.25p, up from as little as 5p in early January.
Another firm well-positioned to assist with coronavirus is the global security and surveillance specialist Westminster Group.
The Aim-listed firm announced last week that it had been contracted to provide advanced fever detection systems to help the fight against coronavirus in Hong Kong.
At times of contagious disease outbreak, Westminster Group offers portable fever detection systems to airports, borders, government facilities, hospitals, military facilities, ports, prisons, schools, shopping malls, universities and sporting events. Its equipment uses specialist infra-red cameras to detect higher-than-usual human body temperatures.
Westminster Group’s share price jumped from 10.75p to 12.2p after the firm announced its involvement in the coronavirus crisis.
Healthcare company Novacyt also announced its involvement in the fight against coronavirus last week. The Anglo-French group, listed on Aim since 2017, said it had launched a molecular test to detect the 2019 branch of coronavirus. The company said it believed that its test is an improvement on current methods, which cannot detect specific branches and so can give rise to false diagnosis.
Novacyt’s London share price leapt up from 13.15p in late January to more than 40p. However, it fell back to around 36p today amid rumours of a treatment being found for the disease.
Antofagasta and Kaz Minerals
On the other side of the coin, copper-producing giants Antofagasta and Kaz Minerals have been among the London stocks worst hit by China’s coronavirus outbreak. Both of their share prices were battered in January amid concerns about the economy of China, which his the world’s largest copper consumer.
Antofagasta’s stock price plunged from a high of 984p to 822p by the end of last month, while shares in FTSE 250-listed Kaz fell from above 550p in mid-January to less than 440p.
But Wednesday brought relief as Deutsche Bank upgraded ratings on both firms, suggesting they had been unjustly hit by coronavirus fears. FTSE 100-listed Antofagasta saw its shares jump nearly 3 per cent to 881p, while Kaz stocks were trading up 4 per cent at 490p.
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The author was remunerated but does not hold shares in the companies