Very few equity market stocks are saving themselves from this veritable drain on the stock markets. With a mean in the fall around 33%, one of the highest in the history of national parks. Where only some values of the food sector and pharmaceuticals have been saved, although with a series of qualifications. In any case, the stock market panic has been installed to stay, at least within a few months. Without being worth any kind of investment strategies since the selling pressure can with everything.
In any case, it is necessary to influence the most serious cases in which some shares on the stock market have depreciated by more than 50% and in some cases even lose their total valuation in the equity markets. As is the case with airlines that have been affected at levels that are not very understandable from the point of view of their fundamentals. With a direct impact on the securities portfolio of small and medium investors. Where it is quite normal that they do not know what they have to do in these dramatic moments for all intermediaries or financial agents.
Either way, it is the right time to analyze which are the worst-performing stocks that have developed in these tough days. In order to have more and better information for those who we will have to do in the next days or weeks. Both in regard to purchasing operations and to execute sales. Because what it is about, after all, is to preserve something of the money we have invested in the equity markets. So that in this way, we are in perfect conditions to protect the money available in these financial assets so vulnerable by the coronavirus.
Securities most punished: IAG
There is no doubt that the most affected value in the selective index of the variable income of our country is the reference airline. Has lost more than 60% of its valuation on the stock market when going from eight euros for each share to be traded below two euros. An impressive fall that has ruined a good part of its investors, in the event that they have not undone their positions in the financial markets in these dramatic days. In this sense, the rapid spread of COVID-19 and the government warnings and travel restrictions associated with it, are having a significant and increasingly negative impact on global air traffic demand on almost all routes operated by airlines. from IAG.
To date, IAG has suspended its flights to China, reduced capacity on the routes to Asia, canceled all its operations to, from and within Italy, as well as made various adjustments to our network. While on the other hand, IAG is implementing additional initiatives in response to this challenging market environment. Capacity, in terms of available seat kilometers, in the first quarter of 2020 is expected to decrease by around 7,5% compared to last year. For April and May, the Group plans to reduce capacity by at least 75% compared to the same period in 2019.
It is also taking steps to reduce operating expenses and improve cash flow. These include grounding excess aircraft, reducing and deferring investments, cutting non-essential IT expenses as well as costs not related to the cybersecurity program, freezing recruitment and discretionary spending, implementing unpaid voluntary vacation options, temporarily suspending employment contracts and reduce working hours.
ACS has collapsed
Unfortunately for its investors, the national construction company has been the negative surprise with the rapid spread of COVID-19. It cannot be forgotten that its falls have been at the level of the values of the tourism sector. When going from very close to 40 euros to exceed almost the level it has at 10 euros. Something impressive to be from a sector such as construction. To the point that the company has had to sign a derivatives contract on a package of own shares representing 3,81% of its capital stock with a financial institution, according to the company.
The group chaired by Florentino Pérez carries out this operation within the framework of the 'scrip dividend' process by which it remunerates the partners, whereby the company amortizes the same number of treasury shares as those it issues to pay on 'paper' in order to avoid diluting the participations of the partners. Nobody counted that this financial group could reach the current levels in its quotation. As a result of this action, each time it charges outside of the fact that from now on it can reduce its dividend and this fact can cause it to fall further in the equity markets.
Sol Meliá in the eye of the hurricane
Their falls are more predictable as they belong to one of the sectors most vulnerable to the spread of this terrible virus that has paralyzed economies around the world. Beyond another series of technical considerations. In this sense, we must remember that? Meliá Hotels International, in the face of the health emergency derived from the COVID-19 coronavirus, the absolute priority of preserving the health of our collaborators and clients, the serious impact that this emergency is having on all economic activity , and especially the tourism sector, the instructions issued by the health authorities and the extraordinary measures decreed by the Government of Spain, has decided to temporarily close a large part of its hotels in Spanish territory.
With this measure, which could be extended if the Government decrees the total closure of hotels in the country, and which also extends to some hotels in Europe and the rest of the world as the situation requires, we want to contribute to stop this health emergency. The closure will be maintained, at least, until the competent authorities reauthorize the opening of these establishments, without being able, today, to indicate an exact date, given that we are in a situation of constant evolution and change.
Arcelor as a cyclical value
On the other hand, another of the big victims are cyclical stocks and among them the international steel company Arcelor Mittal stands out, which has not stopped falling in these last three weeks. From this point of view, it must be emphasized that it has launched a press release in which it states that “Given the magnitude of the outbreak, its consequences for Safety and Health and in particular the impact it is having in several European countries in the As ArcelorMittal operates, the Company is taking steps to reduce production at its plants in Europe in order to protect the well-being of our employees and adapt production to demand. We will continue to track the evolution of coronavirus in each of the markets in which we are present and we will make decisions accordingly to ensure the well-being of our employees and our ability to respond to customer demand ”.
The value of Sabadell is almost zero
The financial group is another of the securities that has collapsed on the stock market and to the point of trading at historic lows, at levels of 0,40 euros per share. Although on the other hand, the credit institution has decided to hold its shareholders' meeting for next March 26, on second call, although it has decided to change the venue and hold it now at the entity's facilities in Alicante (local adjacent to the bank's registered office), as reported this Friday to the National Securities Market Commission (CNMV).
Corporate movements are also gaining strength these days that imply that it may be absorbed by other financial groups. With the fear on the part of its shareholders that their shares could be diluted through this corporate event. In any case, it has been the bank with the worst performance these days. In one of the worst sectors of Spanish equities. And that in a certain way, it will depend on the evolution of the Ibex 35 and that in this situation it seems that the level of 6.100 points may be acting as ground in the selective index of variable income in our country.
In spite of everything, there are other values in the national selective that have depreciated above the national average and that is affecting the positions of small and medium investors. In fear of what may happen after these important moments. Because the corrections may not have finished and therefore may continue in the coming weeks or even months.