Exclusive new data from Stockopedia.com hints at economic recovery in the East Midlands, with the share price value of public companies in the region almost back to pre-pandemic levels.
Stock market valuations have fluctuated throughout 2020 as economies and investors worldwide react to the COVID-19 pandemic. While some companies have experienced an uplift in financial performance during COVID-19, many more have struggled to stay afloat.
But where has seen the most dramatic declines in collective share price value of some of the UK’s largest businesses? And where is experiencing the slowest recovery?
To answer this important question, Stockopedia.com - the UK’s leading stock market research service - has analysed its exclusive market data to compare the average share price performance of publicly listed companies in the English regions and the biggest UK cities over the course of 2020.
Looking at a regional level in England, the East Midlands has seen the second strongest recovery when it comes to the share price performance of its listed companies.
While the average share price value in the region is 9.91 percent lower than it was on 1st January 2020, this figure is much more positive than at the end of Q2 when share prices were down by -32.03 percent.
Diving deeper into the data, the East Midlands is home to a diverse range of companies listed on the London Stock Exchange, spanning across a number of industries including healthcare, technology, finance and industrials. This may be helping to protect its local economy (to an extent) against changes in market confidence.
In particular, N4 Pharma based in Derbyshire - a pharmaceutical company that develops delivery systems for vaccines and therapeutics – has performed the strongest on the stock market over the course of 2020. Its share price rose over 101 percent at the end of March compared to January 1st and this has since risen further to 149 percent at the end of November.
Derbyshire-based Robinson, a packaging manufacturer for the household sector and software firm Intercede based in Leicestershire have also seen strong share price performance in 2020 - up 100 percent and 68 percent respectively in Q4.
Ahead of the East Midlands in the study is the East of England which has seen the best stock market performance compared to pre-pandemic levels (+1.46 percent).
Surprisingly, the East of England is the only English region to see an increase in the average share price of its registered companies over the course of 2020 and show positive signs of a recovery in Q4 – albeit minimal.
Companies in the East of England also saw the least dramatic (but still a considerable) fall in average share price value at the end of March (down -24.09 percent). The South West and West Midlands saw the largest declines, down by –38.73 percent and –39.55 percent respectively.
Notably, the East of England is home to both Tesco and Ocado Group which have benefited significantly from increased spending on groceries and the boom in online shopping during the pandemic. The East of England also has several listed healthcare and technology companies registered in the region, helping to offset declines in other sectors’ share prices, such as EasyJet in Luton and JD Wetherspoon in Watford.
London and the South West closely follow in third and fourth place, with performance down by -10.32 percent and -10.94 percent respectively. London, by far, has the most publicly listed companies on the London Stock Exchange (565) across a diverse set of industries.
By comparison, listed companies in the North of England haven’t fared so well and are experiencing a longer and slower recovery to pre-pandemic share price values than those in the South.
The worst hit region in England is the North East, with the collective share price value of its listed companies down -23.72 percent in Q4 compared to year start. This figure has improved slightly from Q3 (-25.98 percent), but it remains significantly lower than other regions, even in the North of England.
Of the 23 listed companies in the North East of England, six are in the financial sector (especially lending and real estate) which has seen a turbulent 2020 thanks to uncertainties over COVID-19, Brexit and the U.S elections. Consumer cyclical companies based in the region – such as SCS Group, Vertu Motors and Greggs - have also been hit hard by a drop in spending confidence and disposable income.
You can explore the findings in more detail here.
Edward Croft, CEO of Stockopedia.com commented on the findings:
“Covid-19 brought the most volatile stock market environment we’ve seen in years, and with it some clear sector winners and losers. But the virus has also been hitting some regions harder and longer than others. This study shows the impact this has had on the typical company’s share price across regions, and the regional disparity is clear to see.”