The potential impact of a COVID-19 vaccine on the markets

Since the onset of the coronavirus pandemic back in early 2020, the world eagerly awaited a vaccine that was capable of combating and protecting us from it. Although vaccines of this nature take years to develop, trial and then produce, many businesses worked rapidly to create a countermeasure that was successful.

Over the course of the next few months, the financial markets increased and declined while reacting to good news, setbacks and other expectations surrounding a potential COVID-19 vaccination. While it’s safe to assume that it will be a widely positive hit for the markets, how impactful will it really be?

The implications on the global economy so far

Ever since the pandemic came about, investors have shifted their focus away from biotech firms and emerging technologies to larger pharmaceuticals that have robust manufacturing capabilities. As soon as the vaccine is discovered, it’s estimated to generate somewhere around the $10 billion dollar mark in annual revenue.

However, even if a small business discovered the vaccine, there is still the potential that one of the larger companies will buy the drug from them. Gilead and Eli Lilly are two pharmaceutical companies in the vaccine race. Both businesses have seen a significant growth in their share value.

AstraZeneca’s growth over in China however, took a huge hit because of the Chinese economic situation due to the virus. It took an ever larger hit in the EU and US where a lot of the organisations revenue is generated. With these businesses perhaps join forces in the future to help them regain some of their losses?

Challenges faced by vaccine development

There are a number of potential challenges and issues that businesses looking to develop a vaccine might face. From the very real possibility of the virus forming multiple different versions and continually evolving, to the very high costs to the business and challenges with human trials, each one looking to be part of the vaccine race will come across hurdles. Over the past couple of decades, new threats have emerged almost yearly. Outbreaks of Ebola, Middle East respiratory syndrome and the Zika virus, came in the middle of the likes of avian flu, swine flu and influenza. We’ll forever be tackling one virus or another which could all have an impact on the other.

Potential ways the vaccine could impact the markets

As life begins to feel a little more normal and we all start getting used to the way the world is turning, we expect the markets to begin to see some improvement. Already the forex trading markets have seen a positive move for the pound, despite the possibility of a No Deal situation with Brexit only around the corner. And as many look to the high-street to shop again and businesses begin trading as they once did, we expect many investors will begin to feel safer in spending in the financial market once again.

Should the country turn to a full lockdown again however, any progress made could be lost and the economic turmoil that would unfold is not something any country needs.

Latest news