The stock exchange casino in full Covid-19 swing

Comment by Peter Roberts

The Covid-19 pandemic has seen the share prices of solid Australian manufacturers drop by a third, and younger firms in their growth phase halve or even worse.

There have been exceptions – shares in established companies producing infant formula, such as Jatenergy for example, have even risen slightly while others have slipped.

While the general fall in the value of real companies is good buying for some of us, most investors have responded as they always do – try to make a quick buck on the stock exchange casino.

The mere mention of the word Covid-19 has been enough in the past fortnight to see share prices leap.

Leading the pack was new-listing COVID-19 test kit maker Atomo Diagnostics which debuted on the ASX and immediately rose in price by 125 per cent to 45 cents.

Normally a producer of HIV test kits, the company has 300,000 kits available that could be used to detect the new virus.

But you don’t have to actually have a product for punters to place their bets.

Nanotechnology company Nanoveu announced possible anti-viral properties for its products which could be used to coat smart phones and the like and its share price doubled.

Cannabis producer MGC Pharma received approval for a clinical trial testing whether a new product can treat symptoms of the virus, sending their stock surging 60 per cent in one morning to four cents.

There is not much real business in a four cent company and the R&D project is a thought bubble, but that didn’t stop investors piling in to try to reap some short term gain.

PharmAust shares doubled when it mentioned it was looking at whether its monepantel anti-cancer drug candidate – that’s something that itself is unproven – could be used to treat Covid-19.

Anti-cancer company Genetic Technologies shares surged 30 per cent when it said it could enter the Covid-19 testing market.

Shopping website Harris Technology rose a similar amount just for carrying a range of masks and sanitiser on its site.

And biotechnology company Starpharma rose 25 per cent when it said its VivaGel product showed antiviral activity.

It is rather depressing when excellent manufacturing companies with a track record, or young companies with something really innovative to sell and receptive markets, languish.

Such is life.

Picture: Crown Melbourne

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