The spread of Coronavirus has triggered panic across the world and shaken the confidence of investors. The prolonged lockdown is causing significant disruption across multiple sectors. As we continue to work remotely in the lockdown situation the COVID19 impact has created chaos in world economies and global markets, investors are confused about what they should do as an investor? To consider investing in Value stocks that are currently trading below what they are really worth and will, therefore, provide a superior return or they take plunge in growth stocks that have the potential to outperform the overall market over time.
An ingenious mix of panel as a part of concluding session at virtual panel discussion by CorpGini talking about corporate sustainability & growth during Covid 19 had different opinions and suggestions on the subject. The session was conducted by Mr. Varinder Bansal, Managing Partner – Pantomath AMC along with Mr. Samir Arora, Founder & Fund Manager, Helios Capital, attended by Mr. Madhu Kela, Founder – MK Ventures, Mr. Shankar Sharma, Vice Chairman & JT MD – First Global & Mr. N Jayakumar, President – Prime Securities. The topic of the discussion was a deeper look and possibly a futuristic analysis of how the government, investors, businesses and all stakeholders should behave. Coming out of this crisis requires tools that percolate to the very basic problems that we face today.
Impact on Real Estate
N Jayakumar, President – Prime Securities, “We are soon going to be moving to a situation where people can work from home even after the lockdown situation is over. It will dramatically change the quality of life and work from home will be new normal. But we will also have to consider that not all employees are fortunate enough to have a home that is equipped to facilitate work, nor are they comfortable with it. However, what we can learn from the current lockdown situation is the option to cut back on office time and employee presence at any given point in time. This not only saves the time during commute but also extends to cost cutting at the office space. This will have an impact on commercial real estate like offices spaces, co-sharing places.”
On the other hand, the main challenges, as pointed out by, Mr Madhu Kela thinks it’s too early to predict change in the behavior. “With people working from home, there will be increased pressure on the rent of owning or renting commercial spaces. With residential spaces, people might now want to invest in bigger homes but that is not true when it comes to commercial real estate. While the exact way the markets turn out will only be visible in real time, we will have to be ready for the surprises and challenges that are sure to come”.
Impact on Pharmaceutical sector
Mr. Samir Arora, Founder & Fund Manager, Helios Capital said, “There is no connection with Corona virus and companies selling other medicines and it will have no major impact on the stocks of pharma companies”.
Mr. N Jayakumar, President – Prime Securities: “It could surprise us to where pharma could go, not because they have seen a need suddenly but they will see some logic for it. The demand has already gone up. “
According to Mr. Madhu Kela, Founder – MK Ventures,, post Covind-19 crisis and probably something that happened even before this, there is going to be a lot of investment in the pharma sector. “The Pharma sector has always been a market leader across the globe with a valuation at 10 lakh crore in India in 2014. With the regulatory challenges over pricing and export, there will certainly be erosion in profitability but what we must also take into account is that no pharma company has borne a loss in the last 6 years and it will continue to be so”.
Mr. Shankar Sharma, Vice Chairman & JT MD – First Global, “Financial market is definitely a trouble spot. The Indian market is now saturated with banks offering online and unsecured loans but it is eminent that they will be hit hard now. With investments on the decline, only time will see how these lenders will cope with the financial challenges”.
Mr. Madhu Kela , Founder – MK Ventures, said , “Financial companies are important part of the economy and not all the companies will go down. Lot of companies will emerge soon”.
Mr. N Jayakumar, President – Prime Securities, “Bonds give you bonds yields but PSU don’t have terminal value. Hence dividend stocks are becoming attractive choice.”
Solution to lockdown and future
Mr. Madhu Kela, Founder – MK Ventures, Lockdown was important. Right now whole world is finding a solution to same problem. I think partial uplifting of movement should be done. More essentials businesses should be opened.
Mr. N Jayakumar, President – Prime Securities, “The concept of essentials will completely change. The future is going to have a combination of technology and telecom that has never been talked about before”.
A way out, as suggested by Mr. Samir Arora, Founder & Fund Manager, Helios Capital to help the poor people directly and let the working class slowly get back to their jobs. The government’s first responsibility will be to seek a way out of the unemployment that exists and to give steady jobs.
Mr. Varinder Bansal, Managing Partner Pantomath AMC concluded, “Retail investors should consider investing in equities. Be selective of the market and look at the companies you understand better. “