Actualizado: 26 de abr de 2020
With the current economic and political crisis generated by the Coronavirus (Covid-19) worldwide, there are many people who believe that it is the end of time from a religious perspective or the end of the capitalist system as it is known until now. My perspective is that it is not the first time that humanity has gone through a pandemic and we have already gone through others with higher margins of lethality; in times with less sanitary controls, with less scientific capacity and that thanks to God we overcome as a species repeatedly, as was the case of: The Bubonic Plague or Black Plague, Yellow Fever and Malaria. It is to be hoped that when the crisis is overcome, there will be a window of opportunity, as happened in the 2008 crisis in the United States, where many invested in real estate at low prices and years later generated interesting income in rents or by reselling real estate assets. Now I will tell you the niches that I think will revalue themselves after the crisis. 1. Production land: A typically neglected sector in Panama is the agricultural sector. You will be able to benefit from the increase in the consumption of basic necessities of national origin, such as meat, grains and legumes. This could mean a rebound in the sector and generate an increase in the prices of land suitable for production. 2. Storage spaces (Warehouses or Galleries): Covid-19 has generated an excessive increase in e-commerce, due to the inability of people to leave their homes due to a possible contagion of the virus. This situation has turned consumers to use the internet to make all their purchases, this flow of goods will require spaces to store and process orders. In Panama we already had an inventory of wineries at low prices in the market due to an excess supply, but during and after the Coronavirus outbreak, the demand for this type of space may increase and therefore its value. 3. Residential properties: The current situation will affect the economy of many families, which may in the worst case scenario lose their homes when they cannot pay their mortgage or decide to sell it at an auction price to pay off debts with the banks or to generate a flow of liquidity. This scenario is the right time to buy and take advantage of the opportunity prices that the market should reflect, the important thing in this scenario is to look for properties with excellent locations that exponentially increase their value. Recall the stock market crisis of January 2008, when the real estate market collapsed in the United States. This crisis is expected to exceed that of 2008.
Elements to consider: On March 9, it became the second consecutive “Black Monday” on world stock markets, as a result of preventive measures against the coronavirus. Since then, the situation has only worsened with sharp declines in global markets. A week later, on March 16, investors and companies woke up to drops of close to 10% on the New York Stock Exchange, considered one of the largest in the world. In Spain, the Ibex 35 has experienced even greater losses and, together with Italy, it is one of the countries most damaged by the Covid-19. Some fear that the SARS-CoV-2 Coronavirus pandemic could trigger a new economic crisis similar to that of 2008, which had worldwide effects. In all this situation, however, the companies in the pharmaceutical sector are seeing how their actions grow and earn money, mainly those that are dedicated to researching a coronavirus vaccine. On the other hand, the Chinese stock market is recovering now that the coronavirus epidemic is under control in the Asian country. The crisis caused by the coronavirus has also caused a decrease in the demand for oil, since industrial and domestic activity has slowed down in many countries due to control measures. In addition to consuming less fuel due to the pandemic situation, there is another factor that influences the price of oil: the internal battle between Russia and Saudi Arabia, which are the two largest oil producers in the world. Oil has a great influence on the world economy and these producers had an agreement not to harm themselves: they coordinated the production and sale of barrels so as not to compete. However, in a context of crisis such as the coronavirus pandemic, Russia has seen an opportunity to advance to the United States (its eternal rival) and has decided to break the agreement and go it alone. In response, Saudi Arabia has decided to lower the price of its oil to sell more. This trade war has effects for the world economy. In recent weeks, the price of a barrel of Brent (the benchmark crude in Europe) has fallen more than 9%: the current price is about $ 30 per barrel; levels that have not been seen for 16 years.
It is also important to note that the main Latin American currencies are collapsing against the dollar, this collapse is generated by the coronavirus outbreak and in the midst of the oil collapse along with "Black Monday" on the stock markets, the dollar shot up in the region The big losers are: Mexico, Colombia, Ecuador, Venezuela and Brazil. The positive of this situation, for Panama, can attract Latin American investors who bring their money to our country and make investments for the security of our currency vs. the currency of their country and help a faster recovery of our economy. In conclusion, it is clear that we will enter a global recession but it is not the end of the world, rather we must see the situation as an opportunity to reinvent ourselves and take advantage of the new market niches that will be created, as Warren Buffet says: "If we want to achieve above-average results we must do just the opposite of most. We must, therefore, buy cheap when everyone wants to sell and not buy when everyone wants to buy expensive. Seriously, buy cheap and don't sell. It's that simple, that profitable. ”
Until next time and stay home!