AZN, STAN, BATS, BA.: Stocks to focus on as World Bank warns of recession

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Highlights

  • The rate of global growth is expected to fall to 2.9% this year from 5.7% in 2021.
  • The World Bank has said that there could be a possible return to the 1970s stagflation-type situation with sharply rising inflation and low economic growth.
  • The energy and food bills are rising across the world.

A recent statement by the World Bank has warned that most countries in the world are heading towards a recession mainly due to the Russia-Ukraine war, besides the global supply chain crisis, and pandemic-related slowdown. The World Bank has said that there could be a possible return to the 1970s stagflation-type situation with sharply rising inflation and low economic growth.    

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According to the World Bank’s latest global economic forecast released on Tuesday, the Ukraine war has increased the trouble as the countries were already struggling with the supply-chain disruption and high cost of energy, food, and commodities after restrictions were lifted after the pandemic period. The Washington-headquartered bank has warned the countries to start preparing for a recession as it will be hard to avoid.   

The rate of global growth is expected to fall to 2.9% this year from 5.7% in 2021, which is significantly lower than the 4.1% mark that was estimated earlier. The level of per capita income in developing countries is expected to be around 5% this year below the pre-pandemic trend.

Growth in developed countries is expected to decelerate from 5.1% in 2021 to 2.6% in 2022 before touching 2.2% in 2023. The economic growth in emerging and developing economies is projected to fall from 6.6% in 2021 to 3.4% this year.

The World Bank has approved US$1.49 billion of additional funding for Ukraine, which is part of the US$4 billion support package.

Experts and economists have warned that the central banks may further raise the interest rates, which will put the economy at risk, and may lead to stagflation or recession. It would also bother the households and businesses availing loans.  

Although no company is entirely recession-proof, some sectors tend to outperform other sectors in such situations.

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Here are four FTSE-listed stocks that an investor may consider during the recession period.

  1. AstraZeneca Plc (LON: AZN)

With a market cap of £158,510.84 million as of 8 June 2022, the multinational pharmaceutical and biotechnology company has recently announced that it has jointly developed a breast cancer drug, Enhertu, which claims to improve the survival chances of a patient.

The FTSE 100-listed biopharmaceutical company has delivered a return of 28.39% over the last one year, while its year-to-date return stands at 18.44%. Its shares were trading at GBX 10,276.00, up by 0.45%, at 8:05 AM (GMT+1), as of 8 June 2022.

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  1. Standard Chartered Plc (LON: STAN)

The multinational banking and financial services company, Standard Chartered Plc, operates in more than 70 countries and has four sub-segments: Commercial Banking, Corporate & Institutional Banking, Retail Banking, and Private Banking. The share of the FTSE 100-listed company was trading at GBX 616.80, down by 0.93%, around 8:05 AM (GMT+1). Its share value over the last one year appreciated by 23.48% as of 8 June 2022. The current market cap of the company stands at £18.477.67 million.

  1. British American Tobacco Plc (LON: BATS)

The market cap of the multi-category consumer goods company, that deals in tobacco and nicotine products stands, at £80,819.75 million as of 8 June 2022. The FTSE 100-listed tobacco company has delivered a return of 29.24% over the last one year, while its year-to-date return stands at 31.15%. Its shares were trading at GBX 3,585.00, up by 0.53%, at 8:05 AM (GMT+1), as of 8 June 2022.

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     4.  BAE Systems Plc (LON: BA.)

With a market cap of £25,052.48 million as of 8 June 2022, the multinational security, defence, and the aerospace company operates in more than 40 countries. It specialises in products in five segments, including, Cyber & Intelligence, Electronic Systems, Platforms & Services, Air, and Maritime.

The FTSE 100-listed energy company has delivered a return of 47.18% over the last one year, while its year-to-date return stands at 43.32%. Its shares were trading at GBX 788.00, down by 0.73% at 8:05 AM (GMT+1), as of 8 June 2022.

Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.


 

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