Coronavirus

8th Feb '20 by Kieranj077

35 comments 2008 reads

Hi all,

As investors, what are your thoughts on the Coronavirus and what does this mean for your portfolio? Have you taken actions over the past weeks to limit your exposure in particular markets?

There is a lot of conflicting information on the virus. For example, based on World Health Organisation situation reports, the number of confirmed global cases day-on-day appears to be decreasing. On the contrary, media reports suggest the virus spreading and getting worse. It's quite difficult to envisage where this might end up. There is no doubt the virus is devastating, particularly for those in China with many families affected.

World Health Organisation situation reports:

Below is a brief summary table which highlights the number of confirmed global cases and the DoD increase.

Reference: https://www.who.int/emergencies/diseases/novel-coronavirus-2019/situation-reports/

Summary Table

Date	Global Cases	DoD Increase
27/01/2020	2798
28/01/2020	4593	1795
29/01/2020	6065	1472
30/01/2020	7736	1671
31/01/2020	9826	2090
01/02/2020	11821	1995
02/02/2020	14557	2736
03/02/2020	17391	2834
04/02/2020	20630	3239
05/02/2020	24554	3924
06/02/2020	28276	3722
07/02/2020	31481	3205

It would be interesting to hear your thoughts.

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Rusty2

12th Feb '20

The good news is new cases today are well down, just over 2,000 and deaths are also down to 97. Not sure death rate will fall to 1%, only 5,000 have recovered and over 1,000 have died.SARS deaths rate was around 10%. Swine flu killed over 200,000 people maybe close 300,000.

Brilliant Leader

According to Ben Hunt (Epsilon Theory), the daily Chinese numbers are completely fake, using a quadratic equation to demonstrate that the Chinese government have things under control (I.e. death/infection rate falling)

https://www.epsilontheory.com/body-count/

Cheers
Simon

whitmad

The fact that new infection rates outside of China are stable or declining demonstrates that the disease is containable. Given that the measures currently in force in China are more draconian than those elsewhere, I infer that whether the reported numbers are under-reported or not, it can and will be contained there, too. Death rates are still increasing, but there will be a lag between the new infection rate and mortality rates. In economic terms I tend towards the view that there will be a negative impact in the short term. I'm not selling in response and have bought a couple of things that looked to be oversold (UPGS, LUCE). I stand ready to change my view very rapidly if new data emerges.

GrahamF

“ The fact that new infection rates outside of China are stable or declining”

Is that a “fact” or is it simply reported numbers?

How many are infected in Africa? Currently no reported cases. But that doesn’t mean there aren’t any. If it has spread there, can it be contained? That’s anybody’s guess but it would seem reasonable to suppose that the resources to contain the spread there are considerably less than in the developed countries. Watch out for Ethiopia; the primary air route between China and Africa. If cases start being reported there then........I really don’t want to think about the tragedy coming.

Fair point, reported numbers as per WHO - https://www.who.int/docs/defau... and worldometer - https://www.worldometers.info/... , sources that I consider as reliable as any out there. These indicate daily cases growth factor is near or below one. I shall be watching these numbers over coming days. If growth factor is above one, it'll get hard to hide soon enough.

Cases outside China are not stable the biggest increase was only 2 days ago, most were on the cruise liner in Japan. Interesting that another cruiseliner, I think also Carnival owned has been refused permission to dock by 4 countries in Asia. With incubation period of 2 weeks or more it is too early to say, testing also has considerable delay in many countries. I would also watch out for India, many Indians visit Thailand. I have sold my remaining Carnival (LON:CCL) shares.

13th Feb '20

Some bad news today, Chinese numbers have soared due to a new classification, cases up nearly 15,000 and deaths up 248. “Hubei Province will include the number of clinically diagnosed cases into the number of confirmed cases” so it seems the Chinese figures were wrong but are the new figures just for yesterday or do they now include all the cases and deaths? Outside China new cases has fallen.

Think the market will fall today.

George S

https://gisanddata.maps.arcgis...

jwebster

"The jump in numbers came after the province included “clinically diagnosed” cases, which have been identified through symptoms of viral pneumonia who have had CT scans and not laboratory testing."

They changed the reported numbers to included cases diagnosed with a CT scan but not confirmed with a lab test.

The problem with all the reported numbers is they exclude thousands of people at home sick but don't turn up to a hospital. Also hospitals don't have enough testing kits for everyone who shows.

Regardless, on the surface, the mortality rate seems fairly low and the log growth rate has been declining for a few days now.

The only data point which is odd, is the number of reported deaths jumped up yesterday as well, I would have thought this was independent of the testing methodology, but perhaps they were previously classifying these cases as regular pneumonia rather than corona.

Hopefully, just a data reporting catch up and back to declining rates tomorrow.

242 deaths in Wuhan of which 135 were clinically diagnosed leaving 107 reported in the previous way. 107 is a new high for Hubei province. (Source: BBC)

I really think that the numbers are too unreliable to be attempting to work mathematically unless one is an epidemic expert. Market sentiment is probably somewhat different to the bare numbers anyway. Right now the Hang Seng appears to be down less than 1%. Still feels like a lot of people are either complacent, naive or in denial about this around the world to me.

Seems to be just Hubei that was not including clinical diagnosed cases/deaths. I agree the figures are unreliable, there are reports the some dead have been quickly cremated before any testing has been done. Anyway the markets have taken it very well so far. We will see what tomorrow brings.

RadioactiveMan

16th Feb '20

There definitely seems to be something odd going on with the numbers coming out of China and possibly with the rest of the world. As that article suggested the outbreak doesn't conform to a typical exponential growth of a virus, or a virus being successfully contained. Here is another article that shares the view China is hiding the full details: www.foxnews.com/opinion/lew-olowski-coronavirus-worse-than-reported-heres-how-china-is-making-the-situation-worse

This is a good extract: "While admitting to just 17 deaths from the virus, the party quarantined a region of about 60 million people. This decision guaranteed multibillion-dollar economic losses"

The implication being that they wouldn't have taken this step if the situation wasn't far more severe than they were letting on.

It has also turned out that a passenger on the second cruise ship (that was turned away from 5 ports) has tested positive for Corornavirus. She was released after an initial test came back negative. I'm wondering if the virus incubates for a long time before symptoms display. This would possibly explain why the virus is still spreading but at a much slower speed than some people expected.

Having read a few articles, it is startling how little we know about the virus, and how as a new strain the task for the WHO is much more difficult. Nevertheless I think it will be a while before we know if this is successfully being managed, or whether the lack of information is people in power not admitting this is a bigger risk than the markets seem to think it is.

muzmano

17th Feb '20

Does anyone follow this stock? Novacyt Sa (LON:NCYT) I'm intrigued by the price action. Since the 29 January the share price has jumped from 15p reaching 130p today

I saw the announcement on 31 Jan that it had launched a new test for cornavirus. On reading the bulletin boards it seemed like the share was being pumped for all its worth. Information seemed to be coming from twitter and other sources to hype the share.

Further announcements have said that "its subsidiary, Primerdesign Limited, is on schedule to launch a CE-Mark approved nCoV test in the week commencing 17 February 2020". That the test is specific for covid 19 and that the company is in talks with the NHS.

Intrigued as to whether people think there is a genuine business case for the share price rise or whether it is completely sentiment driven, Is the music going to stop?

Armorduck

I've designed a lot of primers in my day job as a biomedical scientist. I can't imagine its particularly difficult to design primers to detect this virus. Based on a quick scan of the company's website I can't see much basis for the share price rise.

It is quite weird the way it spreads, probably over 1m Chinese have flown out of China in the last month yet hardly anyone seems to have caught it on flights. Yet a British person caught it in a business meeting in Singapore and then spread it to 4 British persons at a French ski resort. There have been many Chinese in Thailand but very few Thais have caught it, apart from several taxi drivers who took infected Chinese to hospital.

Thanks for that Armorduck. I see the share price made it over 200p earlier. Over 11m shares traded today, with 57m shares in issue. An interesting story to watch. Easy to say i wish I'd been invested here but it would have been a complete gamble. Novacyt Sa (LON:NCYT)

RNS announcing test release this afternoon:

The Directors believe that Primerdesign's COVID-19 test is the first CE-Mark test for the 2019 strain of novel coronavirus and follows the Company's rapid launch of its research use only (RUO) coronavirus test on 31 January 2020. As a result of the CE-Mark, the Company's COVID-19 test can be used directly by laboratories and hospitals for the testing of patients without the need for validation by clinicians. The Company anticipates increased demand for its test for COVID-19 due to this extended use for clinical diagnosis. "

As previously announced, the Company has submitted an application to, and remains in discussion with, the US Food and Drug Administration (FDA) for Emergency Use Approval (EUA) of its test for COVID-19, which would allow laboratories in the US to use the test for clinical diagnosis on a temporary basis. The data generated from the CE-Mark approval will be used to support this application.

20th Feb '20

The latest news is cases in South Korea have scored in the last 2 days and 2 people have died on the cruise liner in Japan. Cases in China seem to be falling. Just flown into Heathrow from Thailand, surprised there did not seem to any checks there.

22nd Feb '20

I sold all of my shares a couple of weeks ago, partly because of Coronavirus, and also I am looking at buying a house in the next 6 months and at current prices the market doesn't offer a very good level of risk/reward. This may have been a bit of a reaction, but being able to watch developments without stressing about my personal finances is quite a relief.

It is interesting how little the market (and press) is reacting to the developing situation. When I mention it to people they generally don't seem keen on talking about it which, for me is anecdotal evidence that deep down people might be quite concerned. The developments of the last couple of days also look quite significant. Cases have occurred in Iran, Canada and Italy which can't be traced back to China, meaning that there may be a network of carriers that have gone completely undetected. There was a study that suggested as many as two thirds of cases may be going undetected: https://www.news.com.au/lifestyle/health/health-problems/it-could-be-messy-window-of-opportunity-narrowing-as-coronavirus-cases-surge/news-story/7c7d99629625ee44354b06dc447c7175. This seems high but it would only require a fraction of that for cases to spread to countries where they would be unable to contain the virus.

Falling bond prices may be one reason why the stock market is shrugging off big losses posed by this threat, but I think the markets are heavy on optimism at the moment. I have opened (very) small short positions on International Consolidated Airlines SA (LON:IAG) and Carnival (LON:CCL) as travel stocks seem particularly buoyant given the obvious disruption from Coronavirus. I am also considering a small position on gold.

I think there is a very real concern that at worst this could turn into a pandemic and at best we will see further disruption for a couple of months. It seems callous to use this as an opportunity to turn a profit but unfortunately that is the nature of the stock market. What other stocks/assets are people looking at longing/shorting based on the apparent delayed reaction?

mojomogoz

25th Feb '20

On Sunday evening China significantly changed its footing on COVID-19 from epidemic containment to economic re-firing of engines. The leadership now views economic inactivity and the potential distress that comes from that to be the bigger risk

https://www.scmp.com/economy/china-economy/article/3052131/coronavirus-xi-jinping-rings-alarm-china-economy-country

"President Xi Jinping has rung the alarm bell on China’s economic growth as worries mount over the coronavirus’ impact on the economy, unemployment and global supply chains. Speaking on Sunday, Xi made it clear that the priority for most of the country was to get the world’s second biggest economy up and running after extensive delays"

The message from Xi was delivered on short notice scheduled conference call with 170k officials around the country (!) and then a transcript of that speech rushed out on Monday to reinforce the message (this speed is unusual and highlights how urgent the message is). Quite remarkable to western minds. It was a clear change of footing and a message that The Party will now kick your ass most for not getting economic activity back rather than virus containment in most regions. The provinces of Guangdong, Shanxi, Guansu, Liaoning, Guizhou and Yunnan downgraded their emergency grades, a necessary step before lifting travel, congregation and work restrictions immediately following the speech. High risk areas like Hubei are exempted and asked to focus on containment still.

Obviously the above means there is some risk of a rise in virus again, potentially rapid...but its clear that economic issues are now to the fore and with that comes massive 2008/9 like stimulus plans. Spending commitments from regions have already started to come in. The quality and impact of 2008/9 stimulus has been openly questioned in China for a few years now and quality of growth had become much more a focus along with management of bad debts. But the response to COVID-19 has junked those concerns and the regime has decided that growth at all costs to combat impact of virus is essential.

The above is quite a juxtaposition to events in Italy and global markets on Monday. Where will we arrive in China? Normalcy restored and virus adequately contained? Or economic activity juiced up again and a resurgence in virus transmission?

I'm persuaded now that this isn't going to be contained.

Coronavirus

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Kieranj077

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