Letter: Markets take an advance on pandemic cost savings

It amazes many of the leading economists and portfolio managers that stock markets have recovered so strongly — at the same time as a barrage of horrific macroeconomic indicators and endless rows of unemployed are piling up (Opinion, September 13). But perhaps the stock markets — in addition to the effect of low interest rates and aid packages — are simply taking an advance on the significant cost savings that companies will find on the other side of Covid-19.

Covid-19 has done what no consulting company has had the slightest chance of persuading a company to do, namely to rethink the entire company and all processes and routines at once.

Sadly, the outcome for some companies is tragic, but for many, in particular solid, listed companies, this period will mean that they — without problems with unions or other interest groups — have been given the opportunity to trim and streamline in ways not thought possible.

Of course this will have a noticeable impact on costs in the future and thus the bottom line and share prices. Many business leaders will therefore — off the record — say that without Covid-19 this streamlining would never have been possible, and in many has even sparked creativity and new ideas.

If the first industrial revolution took 90 years, the second perhaps 20 years, the third has taken less than a year, so maybe it’s not so strange stock prices have recovered so rapidly.

Michael Voss,
Managing Director, Fundamental Fondsmaeglerselskab,
Vedbaek, Denmark

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