In the last few months, stock markets across the world have been on a nosedive drive. Most of the stock market indexes like Sensex, Dow Jones, FTSE 100, Nifty 50, and Shanghai Composite Index witnessed 30 to 40 percent drop in the last few months.
Even the commodities, which are the second largest value deriver for billionaires and many resource rich countries, witnessed free fall in the last few months. The world has come to a standstill with more than 50 percent of the humanity under complete lockdown. Except for the selling of essential supplies no economic activity is taking place, and therefore, all the companies are losing value.
As majority of the billionaires derive their wealth from publicly listed companies, with the rout in stock markets their wealth decreased manifold. Most of them lost billions of dollars in the last few months as stock prices crashed.
The stock price and commodity price rout started since the start of this month. First the Russia-Saudi Arabia price war brought the oil prices to the lowest of the decade at 26 dollars per barrel, and simultaneously started the stock price crash.
On the March 9, what was termed as Black Monday by the market watchers, the 500 richest people of the world lost 238 billion dollars. On that day, Jeff Bezos, the world’s richest person, saw his fortune decline by 5.4 billion to 109 billion dollars from 114 billion dollars. Similarly, Waren Buffet and Bernard Arnault, the two other billionaires with net worth of more than 100 billion dollars lost 5.4 billion and 6 billion dollars respectively on black Monday.
The tech companies saw a loss of 321 billion dollars in value on black Monday and therefore the tech billionaires like Mark Zuckerberg, Larry Page, and Sergrey Brin also lost billions of dollars.
In India, Mukesh Ambani lost 41 percent of the net worth after the Coronavirus induced rout began. On March 19, Ambani’s net worth was 34.4 billion dollars, compared to around 60 billion dollars in the start of the year. The shares of Reliance Industries Limited, the company through which Ambani derives majority of his wealth, plummeted by 39 percent in the last few weeks.
Mukesh Ambani is not the only one who lost billions of dollars. Almost all the ‘Richie Rich’ of the country, except for those derive their wealth from Telecom, lost billions of dollars in last one month. From Birla to Tata, Ambani to Adani, Kotak to Lakshmi Mittal, almost all lost billions of dollars with double digit decline in their net worth.
Telecom companies, whose business surged amid Coronavirus due to work from home and higher uses of data, witnessed surge in the stock prices. For example, the share of prices of Airtel has had sunny month after almost a year of decline due to Coronavirus. The net worth of Sunil Mittal increased by double digit due to rise in stock prices if Airtel.
Sensex, the sensitive index of Bombay Stock Exchange, witnessed some of the biggest falls in the history in the month of March due to Coronavirus. The BSE mid cap also witnessed huge loss with more than 100 lakh crore rupees of value destroyed in a single day.
The investment managers are so scared of the stock market rout that they are asking for suspension of trading to save the value of their investment. “Our markets must be closed for trading, because our staff is being pulled out of offices and they (the police) are sealing office buildings. Prime Minister Modi wants complete isolation of people and we are asking those related to capital markets to step out even when transport is not available to reach offices. In fact, India should take the lead on even pressuring the global regulators to close markets till the situation returns to normal as these are unprecedented conditions and no time to indulge in derivative gambling,” said Deven Choksey, Managing Director, KR Choksey Investment Managers.
However, so far, the BSE as well as the government has not decided about any such lockdown on stock trading except for suspension for few minutes. This year, so far, has not witnessed any sunny side for the investors. From commodity to stock market, bonds to debt market, every venue of investment is falling apart.