More than 100 UK-listed companies have now warned the stock market of the effects of the coronavirus on their businesses, according to figures released today.
British giants like Guinness brewer Diageo and British Airways owner International Airlines Group are just two of 132 companies to issue warnings to investors.
In the last week alone, 62 firms have issued alerts on the Covid-19 outbreak – up from 28 the week before, according to Bowmore Asset Management.
Coronavirus fears have resulted in the worst rout for the FTSE 100 since the 2008 financial crash, wiping billions of pounds off the value of London-listed companies.
Diageo, owner of Guinness and Smirnoff Vodka, earlier this week warned of a £200m knock on profit and a fall of up to £325m in group organic sales this financial year.
A Diageo spokesperson explained that “restrictions on public gatherings, the postponement of events and the closure of many hospitality and retail outlets” have had a negative impact on consumption.
IAG, which owns BA, Iberia and Aer Lingus, has suffered as a result of weakened demand across Asian and European routes. Its shares have fallen sharply – down 17 per cent this week. The company said it could not guide on how bad its 2020 profit hit will prove to be.
IAG’s chief executive, Willie Walsh, today explained that the situation had rapidly escalated: “Last Friday I know we would have been comfortable providing the markets with guidance – but given what has happened since, there is just too much volatility there.”
Likewise, Easyjet has cancelled flights to and from Italy in light of the lockdown of towns in the north, a region that has experienced 17 deaths due to coronavirus.
Shares in the budget airline have plummeted by a third this week, after it confirmed a “significant softening of demand and load factors into and out of our Northern Italian bases”.
The financial services sector has also indicated that it is likely to be hit by the coronavirus outbreak in key Asian markets. Standard Chartered, an Asia-focused bank, warned yesterday that it is likely to miss its previous growth target of five to seven percent due to an economic slowdown in the area.
Bowmore Asset Management reported that investors are rushing to buy “safe haven” assets. Charles Incledon, a client director, insisted that “investors with a long-term horizon need to avoid the temptation to exit the market”.
“Past corrections show that big sell offs are followed by rallies that quickly make back a large amount of the ground that has been lost,” he added. “However, it is hard to time that. Some sectors that may be more heavily sold, such as oil and gas and travel, could present real opportunities to buy at significantly lower levels.”
But Connor Campbell, a financial analyst with Spreadex, warned another escalation in the number of coronavirus cases could send markets spiralling even further.
“The weekend may provide time for heads to cool, and allow investors to assess whether or not they want to re-enter the market at these new lows,” he said.
“From a market perspective, an explosion of cases in the US would likely be the most catastrophic turn the illness could take.”