The past few months have been tough on the Eurozone economy and the global economy at large due to the negative economic impact of the coronavirus. Investors have been waiting to see whether things will get back to normal but there it looks like things might be looking grim for a few more months.
Deutsche Bank CEO Christian Sewing stated on Wednesday that he does not expect the Eurozone economy to recover to pre-coronavirus levels for some time. This means that business activities in Eurozone will likely take longer than expected to recover to normal levels. This means that livelihoods will be affected as the economy will not operate at 100 percent capacity for some time.
The impact on the banking industry is growing stronger
The prolonged impact is already starting to take its toll on companies and businesses. For example, Banco Bilbao Vizcaya Argentaria SA and Societe Generale SA have been booted from the Euro Stoxx 50 Index. The latter is one of the largest stock benchmarks for blue-chip stocks. The changes have been made to the index to ensure that it meets investor needs which include hosting stocks that will deliver strong growth. The banking industry is one of the industries that have been affected the most by the ongoing coronavirus pandemic and with the current outlook, they are not in a position to deliver strong growth.
Banking industry stocks are not the only ones that have been affected. Spanish Telecommunications Company, Telefonica, and Argentinian financial services provider, BBVA have also been removed from the Euro Stoxx 50 index. Some of the other companies that have also been exited from the index include a French bank called Société Générale and a French operator known as Orange.
It is no surprise that these companies have been removed from the index. Their performance has been wanting. For example, BBVA has so far lost 45% of its value on a year-to-date basis while Telefonica has been down 47% YTD. They have been booted because of their poor performance which has been slowing down the index. Some companies have also been added to the index, such as Adyen.