Market volatility is continuing to rise amidst the ongoing global pandemic.
Worst yet, it is difficult to pinpoint when this is likely to end. Markets are up one day and crashing down the next.
Just yesterday S&P500 futures were up 4%, European shares opened 3% higher, and Australia enjoyed a great day with a 6% bounce.
But, like with any rollercoaster, ups must precede downs. Despite a huge surge on Wall Street overnight, the ASX is in for another rough day.
At the time of writing the ASX200 was down 3.05%, wiping out about roughly half the gains made yesterday.
With the usual conservative plays of gold and government bonds joining the rest of the market on this rollercoaster, some investors are now looking in some interesting places to shelter their money.
Speculative biotech a safe haven?
It is a telling sign when investors begin to look for safety among some of Australia’s most speculative small-caps.
But these are unusual times where fear resigns supreme and…
I penned a piece yesterday about the meteoric rise of a Melbourne-based biotech developing and manufacturing COVID-19 diagnostic kits.
It got me thinking, are there any other Aussie biotechs venturing into the fray to tackle this virus?
Turns out there is and they’re having a good go at it too.
ASX200 (blue), BIT (green), MDR (yellow). Note, ZNO left off for sake of clarity.
Source: TradingView
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Zoono Group Ltd [ASX:ZNO] is actually New Zealand based (but close enough) and not actually a biotech. The company deals in the development, manufacture, and global distribution of antimicrobial solutions.
ZNO announced at the end of January, orders for its surface sanitiser had skyrocketed in excess of NZ$1 million in the last two weeks of the month, predominately from China and Hong Kong.
Zoono’s Z71 Microbe Shield Surface Sanitiser was successfully tested in 2014 against bovine coronavirus.
Last month test results showed that the same product is also effective against COVID-19. ZNO immediately began shipping to the product to China via a co-branding arrangement with Eagle Health Holdings Ltd [ASX:EHH].
With the release of quarterly results yesterday, the ZNO share price pushed 13% higher. The company’s share price has seen a massive 1,239% rise over the past year.
Biotron Ltd [ASX:BIT] is another ASX small-cap that could see a further breakout during the ensuing pandemic.
The Sydney-based biotechnology company is involved in the development and commercialisation of a novel small molecule approach to treat several serious viral diseases.
BIT has largely been focused on treating HIV-1 infections. Their share price spiked at the beginning of February when they announced it would be testing its proprietary compounds against the coronavirus.
No news regarding the effectiveness of their technology has been released yet, however previous testing on similar strains (like SARS) has been shown to reduce the levels of coronavirus by 90–100% in infected cell cultures.
MedAdvisor Ltd [ASX:MDR] is an interesting software systems developer focused on addressing gaps in personal medication adherence.
Like many other traded companies, MDR’s share price has been extremely volatile over the past few months.
Yesterday however, MDR’s share price jumped 33.33% on the back of some strong financial results and the news their technology would be facilitating frontline healthcare efforts during the crisis in Australia.
MDR has a presence in 60% of Australian pharmacies, providing a digital connection between pharmacists and their patients.
With the ongoing crisis forcing much of the nation into self-isolation, digital tools such as MDR could become critical for patients to receive their required medication.
These three companies are by no means a sure bet, and the speculative nature of these types of stocks makes them very risky.
If you are looking to protect your money during the ‘corona crisis’, check out this free report by our Money Morning analyst where he reveals two-pronged plan to help you deal with the financial implications of COVID-19. Download your free report here.
Regards,
Lachlann Tierney,
For Money Morning
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