Two Sectors to avoid (for now)

Two Sectors to avoid (for now)

A week (as they almost say) is a long time in pandemics.

I wrote the bulk of this article a few days ago, before the leak and subsequent announcement of a four week "lockdown" in England. I do not think it was especially prescient to have expected additional restrictions on the hospitality sector. It was simply a question of what and when, not if.

The thornier question is what will this do to hospitality companies and the share prices of those listed. As I note below, share prices actually rose after the announcement and implementation of the first lockdown.

It is not implausible that this will happen again; expectation of further restrictions must have been already in the price. Despite the wailing and gnashing of teeth, this move could actually be better for hospitality than the alternatives.

They have a small window to manage down inventory, which hopefully was being tightly managed already. Furlough support is back and this shut down may improve the chances of having some form of (much reduced) Christmas trade.

I will leave the update here and let you read the rest of the article as originally written.

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