Putting Stock in Vaccines

By Artemis Sianni-Wedderburn, BA Politics and Arabic

Covid-19 has wreaked havoc on lives, health and the economy. This is reflected through the stock of English football team Manchester United (MANU on the New York Stock Exchange) and the positive correlation between key Covid dates (lockdowns, death toll milestones and vaccine approval) on the stock price. These two variables and their interaction can be used to track consumer confidence in England, and allow for a succinct prediction of the country’s economic future. 

Consumer confidence – how much a person is willing to invest and spend – makes up 50-75% of England’s GDP, which is on par with many other countries globally; this means that a drop in confidence is catastrophic for the market. In this case, the jobs that are produced by the Manchester United football team, and revenue from sales. It is an accurate measure for predicting the future of the market, allowing for targeted financial planning which is key to avoiding an economic recession after the pandemic.

MANU was chosen as the stock in this article due to its prevalent outdoor and active nature as opposed to Esports, which have an exclusive online presence. With the primary revenue being generated from ticket and merchandise sales and a dividend based investor profile, the MANU stock and its price on the NYSE reflects the reality of lockdown – no matches, rallies or celebrations after a game. The price will therefore allow for a true prediction on the impact of vaccinations nationwide. 

Caption: Key English Covid Dates vs MANU Stock Price (Credit: Artemis Sianni-Wedderburn)

The first date on Graph One (30.1.20) marks the first Covid-19 related death in England (blue) – pinpointing the highest stock price for the next 14 months. The first two orange bars, dates that the country entered lockdown, mark the biggest drop in stock price suggesting early on the catastrophic impact of Covid-19 on the population’s willingness to spend. 

The share devalued 28% in 2020 alone, reflected in the fact that the club did not manage to sign high-profile players Jodon Sancho and Gareth Bale due to exorbitant transfer costs. Games that were cancelled or postponed further impacted this, especially given the aforementioned revenue model. 

The third lockdown (6.1.21) does not generate such a dramatic blow, perhaps because a tolerance had been developed, and alongside it a vaccine. The final bar on the graph (22.2.21, green) marks the highest point since the first Covid-19 related death; this is the date that Prime Minister Boris Johnson announced the plan for the UK to exit lockdown by 21 June. A concrete exit plan based on increased vaccination (the UK in the lead globally in terms of the percentage of the population it has vaccinated) gives hope that the end is in sight. 

The development of vaccines and the subsequent boost in share price foreshadow the positive correlation between the two. This can explain the high share value when the third lockdown was announced (6.1.21), as the approval of the Pfizer and AstroZeneca vaccines a few days before inspired investment. The death toll milestone of 100,000 does not have the expected impact when compared to the previous 20,000 and 50,000 milestones – a phenomenon that can be explained once more by the development of a vaccine after the November lockdown. 

Caption: % of English Population with First Dose vs MANU Stock Price (Credit: Artemis Sianni-Wedderburn)

Graph Two shows an upwards trend of the MANU stock against the percentage of the English population that had received the first dose of a Covid-19 vaccine (AstroZeneca, Moderna or Pfizer).

Since the first dose to the first person in the UK was administered, the stock price increased, leading to the highest value on 22.2.21. 

This is because the distribution of the vaccine allows for playing to resume – outdoors – impacting ticket sales alongside merchandise. We can predict, based on this, that  fans will feel a renewed zest for their team after a long hiatus. Consumer confidence increases apace with vaccination, meaning higher investment in general –  and not just for the MANU stock. 

Post Author: The SOAS Spirit

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