Coronavirus update from Italy
SuperyachtNews investigates a growing level of hysteria that could impact the industry…
Two important components of the superyacht industry are currently feeling the impact of the seemingly rapid spread of coronavirus: the stock market, whereby many UHNWIs make their money, and contagion within Italy, arguably the single biggest market in our industry. One of these components seems to be truly suffering, while the other seems to be in more danger from mass-media misconceptions than of the actual virus itself.
According to a recent article from Axios, “G-20 finance ministers and central bank governors of the world's largest countries pledged to ‘enhance global risk monitoring’ and warned the coronavirus posed a serious threat to global growth during their weekend meeting in Riyadh, Saudi Arabia,” further to the continuous fall of the Asian stock markets. Sky News has reported that stock markets are heading for the worst week since 2008, “as losses pass $5trn,” (£3.9trn) with airlines and travel stocks being hit the hardest.
From a regional perspective, Italy has been presented by the mass-media to be suffering, with 400 positive cases at the time of writing. While this number continues to increase, the Italian marine industry association, Confindustria Nautica insists that this is due to the number of tests the country has carried out in comparison to others.
‘The number of COVID-19 positive cases in Italy have grown in the last few days, reaching 400 cases, of which just 200 confirmed (WHO source), because almost 10000 tests have been carried out among the people who have been in contact with the patients. Nevertheless, for the vast majority of positives the symptoms are absent or minimal and the health measures only provide for a 14-day self-isolation at home. It should be also noted that in other European countries the number of tests carried out is much more limited and in some cases the results are not disclosed to the public’.
"As for the marine industry, it is important to underline that the Made in Italy production continues without any problem and that orders are definitely guaranteed" - Confindustria Nautica
‘As for the marine industry, it is important to underline that the Made in Italy production continues without any problem and that orders are definitely guaranteed. The damages that have been recorded so far by our companies do not generally concern the measures to contain the virus in Italy, but those related to the Far-East, from which derive, in some cases, delayed or missing supplies of raw materials or components due to some restrictions in trade,’ the statement continued.
SuperyachtNews has been seeking comments from Italian-based superyacht businesses for feedback on the current situation, over the course of the past two days. However, the lack of willingness to comment is a testament to Confindustria Nautica’s statement. Many of those we spoke to refused to go on record for fear of stoking the fires of hysteria. For all of them, many of whom were recognised industry stakeholders, business continues as usual, and, as the Association have said, “it is wise to wait for the evolution of the issue without alarm.”
Even so, at least one Italian industry event has been cancelled, following news of the Singapore Yacht Show’s postponement earlier this month. And SuperyachtNews will be monitoring the status of others as this situation develops.
A cutting example for any contemporary business came earlier in the week, when Microsoft cut its sales forecast for this quarter citing disruption to its suppliers in China caused by the coronavirus epidemic. After announcing this, shares in Microsoft fell nearly 2%. “On Jan. 29, as part of our second quarter of fiscal year 2020 earnings call, we issued quarterly revenue guidance for our More Personal Computing segment between $10.75 and $11.15 billion, which included a wider-than-usual range to reflect uncertainty related to the public health situation in China,” began Microsoft’s latest press release on the matter.
Microsoft’s supply chain is reportedly returning to normal operations at a slower pace than anticipated at the time of their Q2 earnings call. “As a result, for the third quarter of fiscal year 2020, we do not expect to meet our More Personal Computing segment guidance as Windows OEM and Surface are more negatively impacted than previously anticipated.”
Companies such as Microsoft will continue to feel the effects of the virus until the unfortunate employees it is affecting are back to full health, which will continue to affect stock market value. According to The Guardian, many other consumer-focused companies are down on the Dow, with “Coca Cola (-5%), Procter & Gamble (-5%) and Johnson & Johnson (-4.8%)” among the top fallers.
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