People & Money

COVIDnomics: Here are Some Investment Options You Need Right Now

All over the world, economic analysts are coming to terms with the present realities engendered by the COVID-19 outbreak. Some are predicting a global recession, depression, while others expect the economy to bounce back after a few months. While there is no consensus on the exact effect we will see in the coming months, one thing is certain: the economic strengths of nations around the world will most definitely take sizable hits, and Nigeria is not exempt from that fact.

The effects already taking a toll: the drop in oil prices led the International Monetary Fund (IMF) to lower its forecast of Nigeria’s 2020 economic growth from 2.5% to 2%; Nigeria’s unemployment rate predicted to reach a high record of 33.5% in 2020 will most definitely worsen now that the pandemic is causing people to lose their jobs; uncertainty over FG’s economic response to the outbreak caused the Nigerian stock market to hit a four-year low in mid-March, effectively entering a bear market.

This bleak picture has spurred some reactions. While many are tempted to clear out their bank accounts, some investors are seeking smart, low-risk investments to windbreak the storm ahead.

Going forward, the most important thing to note is that the market is unpredictable. For this reason, trying to “game” the system is not entirely different from gambling; betting on one basket and putting all your eggs in it will put you at a devastating loss should everything come crashing down.

This is why it is important to diversify your investment portfolio to account for the unpredictability of a bear market economy, according to Steve Brice, Chief Investment Strategist, at Standard Chartered Private Bank and Kristina Hooper, Chief Global Market Strategist, at Invesco.

Lifestyle changes are expected to occur even after the isolation periods as the world would be reluctant to go back to the same modes of living that caused the virus to spread [e.g. people will tend to travel less, personal hygiene will be paramount, and work/study-from-home options as well as remote conferencing]. So, this would be a good time to buy stocks in companies providing some related services.

When it comes to investment, one needs to look at the companies expected to make a killing during and after this epidemic. Let’s take a look at some sectors expected to benefit from this:

Real Estate: During the COVID-19 emergencies, prices are expected to drop dramatically in the real estate sector. Some owners might be desperate to sell off their property to get some extra cash.

So, a long-run investment in the sector might be a wise thing to do during this period.

The sector most expected to see considerable growth during this pandemic, and afterward, are data providers – tech companies.

Tech stocks: In the era of social distancing and lockdowns, most offices all over the world are working remotely and relying on technology to power a remote office. This is where video-conferencing software like Zoom, Skype, and Team Viewer shine. Offices are relying on them to account for physical distance caused by government-mandated isolation. And their worth has skyrocket: Zoom’s shares soared over 88% on Monday. Skype saw a 70% user growth in March. Team Viewer is expecting a 34% revenue growth in 2020 owing to a sudden surge in demand. Collaborative software apps, Slack Technologies [WORK] also recorded a rise in subscription rates as the company’s shares rose more than 30% on the year. It is advisable to buy stocks in these companies.

Entertainment and Media: Social media and remote entertainment platforms are gaining traction as people are currently staying back at home with no alternative form of recreation.

No partying, no drinking at bars, no hanging out with friends, and certainly no visiting of cinemas. Netflix has seen a stock surge since the epidemic hit. It might be time to make moves towards the streaming giant.

Interestingly, an almost contradictory case can be made for social media stocks. While Facebook and Twitter are both struggling to generate revenue during this period [Twitter stocks have lost 40% of their value since February 20], it is the perfect time to think of buying stocks in them. It sounds crazy, but hear us out. It is only natural that revenue generation would be difficult for those companies at the moment.

After all, they do not make money from the number of users they attract. Their primary revenue source is advertisements and with everyone currently at home and no one buying non-essential products on the internet, ad revenue is bound to suffer. But this is where it gets interesting.

It is now cheaper to buy shares in these companies than it has been in a really long time. And people will not be stuck at home forever. It is expected that consumer spending will go back to normal in the coming months and the social media companies will go back to their ad generating ways. If you buy while it is cheap, you tend to profit much more than you would in the usual situation.

Healthcare: Pharmaceuticals are at the front line in the fight against the virus. In the US, Big Pharma sees the fight against coronavirus as a once-in-a-lifetime opportunity to make money from the desperation for a vaccine. A look at some of the big pharma companies in the U.S will also be a good buy at this time.

E-commerce: With a lot of people staying at home, feeding is very necessary. And of course, not everyone enjoys cooking at home. Food delivery applications are getting more patronage than ever before. To stay in business, restaurants in Nigeria are relying on these apps to help them get food to their customers. Apps like Jumia Foods, OPay’s OFood are being touted as potential big players in this fight. It is important to get on the wave before the demand gets too crowded.


This is not the time for panic. Look out for the sliver-lining in the cloudy sky, make a smart move by turning the unfortunate circumstance into an opportunity for wealth creation.

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