2 ASX 200 companies playing a vital role in the coronavirus crisis

Here, we look at 2 ASX companies playing a vital role in the coronavirus crisis – Metcash Limited (ASX: MTS) and A2 Milk Company Ltd (ASX: A2M)

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The share price of many of our leading companies in the S&P/ASX 200 Index (ASX: XJO) have been hit hard by the coronavirus pandemic over recent weeks, as the crisis deepens both locally and internationally. The heaviest hit industries have been the focus of a lot of market commentary, especially companies in the travel, tourism, and entertainment and leisure segments, following increasing actions by governments to stop the movement of people in order to stem the transmission of the virus.

Here we look at 2 ASX companies that will play a vital role as the coronavirus crisis unfolds, due to high demand for their essential goods at the moment. This also will position them well to ride out further share market volatility.

Metcash Limited (ASX: MTS)

Metcash owns and operates a number of supermarkets across Australia including IGA, Foodland and the Friendly Grocer.

Metcash has seen a big increase in demand for its products over the past few weeks as the coronavirus crisis escalates. Other major supermarket chains in Australia including Woolworths Group Ltd (ASX: WOW), Coles Group Ltd (ASX: COL) and Aldi are also seeing strong demand.

Initially, consumer panic buying was limited to sanitary items but has recently spread to a much wider range of goods, including fresh produce as well as other non-perishable food items such as pasta and rice. Supermarkets will continue to play a much more central and vital role in our society as non-essential food eateries are restricted or shut down. For example, on Sunday the Australian government has announced that all cafes and restaurants are to be temporarily closed, apart from take away service. More Australians will have no choice but to eat at home, and a regular trip to the supermarket will be vital.

A2 Milk Company Ltd (ASX: A2M)

a2 Milk is seeing high demand for all its products at the moment, especially for its infant formula and powered milk formula products, but also for its regular milk products, which are quickly being sold out. This demand looks set to continue over the next few months as the coronavirus crisis continues, both locally and internationally.

Although a2 Milk's Chinese market was significantly impacted during January and February when the focal point of the coronavirus was in China's Wuhan area, life is now getting back to normal in that region and other parts of China. This is likely to translate to increased Chinese demand, particularly through online and reseller channels.

Other infant formula providers that are likely to continue to see strong demand throughout the coronavirus crisis include Bubs Australia Ltd (ASX: BUB) and Nuchev Limited (ASX: NUC).

Motley Fool contributor Phil Harpur owns shares of A2 Milk. The Motley Fool Australia owns shares of A2 Milk. The Motley Fool Australia has recommended BUBS AUST FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Broker Notes

These ASX 200 shares could rise 20% and 50% in 2025

Analysts are tipping these shares to beat the market this year. Let's see why.

Read more »

Girls at a party are surrounded by gold streamers, a golden ball and are having a fun time.
Best Shares

New Year's resolution! Top ASX shares for beginner investors in 2025

Planning to bolster your financial future this year?

Read more »

A smiling businessman in the city looks at his phone and punches the air in celebration of good news.
Share Gainers

Why Cettire, Gold Road, Imugene, and Paladin Energy shares are racing higher

These shares are ending the week with a bang. But why? Let's find out.

Read more »

A man looks down with fright as he falls towards the ground.
Share Fallers

Why Appen, Brainchip, Liontown, and Mesoblast shares are falling today

These shares are ending the week in the red. But why?

Read more »

a man in a business suite throws his arms open wide above his head and raises his face with his mouth open in celebration in front of a background of an illuminated board tracking stock market movements.
Broker Notes

Brokers name 3 ASX shares to buy today

Here's why brokers are feeling bullish about these three shares.

Read more »

A woman blows what looks like colourful dust at the camera, indicating a positive or magic situation.
Share Market News

Why did the NAB share price jump 21% in 2024?

It was a good year for this big four bank. Let's see what happened over the 12 months.

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Broker Notes

More of the best ASX stocks to buy in 2025 according to Bell Potter

Let's see why its analysts are so bullish on these stocks this year.

Read more »

Person pointing at an increasing blue graph which represents a rising share price.
52-Week Highs

5 ASX All Ords shares starting the new year at 52-week highs

What a way to start 2025...

Read more »