Business takes £850m Black Monday hit
THE North West’s listed businesses had almost £850m wiped off their collective market value – a fall of 2.87% – as a result of China’s Black Monday.
Figures have been released by Deloitte after the collapse eight days ago which saw Chinese stocks plunge by 8.5% on the Shanghai Composite.
The crisis affected public markets across the globe, with Wall Street’s Dow Jones down 3.6%, and major markets in France and Germany falling by 5.5% and 4.96% respectively.
Despite the drop, the North West’s quoted companies have performed relatively well when compared to many of their counterparts.
In particular, the London Stock Exchange’s premier market, the FTSE100 closed 4.6% down, falling below the 6,000 mark for the first time since 2013 – a 16% decline from its record high of 7,100 in April.
In contrast to the general trend of decline, many North West businesses actually witnessed growth during the period.
Moneysupermarket.com and JD Sports, both listed on the FTSE250, added more than £225m to their collective values with a rise of 9.7% and 4.6% respectively, while fashion retailer Boohoo.com saw growth of 16.2% to add almost £50m to its market cap.
Chris Robertson, partner in charge of plcs at Deloitte in the North West, said: “Rational economics would suggest that as many of the factors driving the Chinese stock market slump are local, the majority of the effects should be felt in that market.
“The shockwaves being felt through international stock markets reflect just how global our world has become and the increased economic influence of China within that global economy.
“It also clearly demonstrates how public markets are affected by sentiment as well economic analysis, in particular in the short term.
“Within that context, it is encouraging to see some rational economics coming to the fore. The underlying strength of many of our North West based public companies is being recognised as evidenced by their relative resilience in outperforming markets nationally and internationally.”
Partner in charge of Global Employer Services in the North West, Jo Ahmed added: “Despite the sense of turmoil this week, Chinese companies are still sitting on large amounts of capital that they are looking to invest in the UK, with recent reports suggesting that the property markets are particularly attractive.
“Though the force of the dip has been felt across the globe, stock markets have become increasingly acclimatised to these bumps in the road, and I am confident that a short term storm can be weathered by North West plcs.”
