Much has been said about the Brazilian stock exchange, the successive circuit breakers and the collapse of the economy with the growing pandemic of the coronavirus. The unstable scenario and growing fear make the economy even more volatile and the market more susceptible to variations. It is a natural and expected move in the current conjuncture.
Furthermore, it is a domino effect, which affects large and small companies - the latter, of course, suffering more immediately from the effects of the crisis: most micro, small and medium-sized companies do not have enough cash flow to withstand many months of economic shutdown.
Recent analyzes by the American bank Goldman Sachs, point out that, at the moment, it is extremely difficult to calculate the bottom of the market and that the costs of trying to determine it early can be very painful for investors. Therefore, despite the risks and fear of the market, it is necessary to remain calm. If we still do not know what to do, it is better not to do anything. Under penalty of hasty decisions bringing even greater economic risks and losses.
The question now is to change the focus. Companies have tangible value - related to their equity - and intangible value - as the name implies, much more difficult to measure. At this time of a pandemic, brand positioning could be an important starting point for the post-crisis recovery. And this is nothing new.
Since the 2008 economic crisis, the economic agenda has changed and the success of companies has less and less to do with their tangible productive capital (investment in machinery, factories and physical assets in general) and more with their intangible assets (such as brand positioning, team loyalty, intellectual property, employee skill, etc.). Thinking about their own positioning strategy in the face of the pandemic, valuing human capital and preserving their intangible assets can be a great strategy for companies to be able to rebuild after the crisis.
The drops linked to the coronavirus tend to be volatile and, therefore, it is likely that the market will rise again after the end of the pandemic - which has an estimated duration of 60 days, according to official bodies. On the world stage, optimism has already returned to the stock markets in some countries. The reduction in the registration of new cases and deaths in Italy boosts the more positive outlook, and European stock markets operate higher in the face of signs that the spread of the coronavirus is slowing in one of the hardest hit countries on the European continent.
Charluan Gamballe Correia is a businessman and CEO of GCS Capital, a company from Paraná that specializes in structuring investment funds and real estate and hotel ventures., with more than 30,000 units deployed throughout Brazil. GCS Capital is also responsible for structuring Vela da Fé, an international tourist complex in Aparecida do Norte.