Although this year’s economic growth has been fast so far as expected, another wave of the pandemic, especially as a result of the Delta variant, may have negative effects. There are some signals of such development: the US service sector saw a slowdown in June and the growth in Chinese plants was at a four-month low. Oil prices have also experienced a decline as a response to the rapid spread of Delta.
Predominantly the travel industry is among the sectors that may suffer new hits after a short recovery. This is explicitly confirmed, for example, by the UN stating that this year, the global economy may see a production decline of nearly USD 2.4 trillion as reported in 2020, primarily as a consequence of the pandemic impact on travelling and its related industries.
On the other hand, industries that primarily profit from the repeated fall in the epidemic data, and the resulting reassessment of originally optimistic expectations relating to the speed of economic recovery, may continue to include pharmacy, biotechnologies, and medical supplies and services.
According to a study of APME FX, the companies that deserve a long-term attention in the above-mentioned sectors comprise namely BioNTech (pharmacy), Regeneron (biotechnologies), Medtronic (medical technologies and equipment) and UnitedHealth Group (insurance). The companies came with effective vaccines (BioNTech) or drugs (Regeneron) against SARS-CoV-2 in record time, which was reflected in their sales significantly. This was also driving the market value of those companies, which was the case of the medical giant Medtronic and Moderna that made a great achievement in mid-July when it was added to the S&P 500. The company’s stocks grew several times over the last year.
Out of the largest health insurance companies, significantly positive data since the start of the pandemic has been reported by UnitedHealth Group. For more details on the performance of the companies selected by APME FX, refer to the World Health Care Investments 2021 study here.
Peter Svoreň, APME FX
