The country is on a road to a full lift in social distancing norms. Bearing this in mind, I think these are the three UK shares to buy now for me to capitalise on potential jump in prices.
Covid-19 restrictions are slowly but surely being lifted across the nation now, with the latest mandate allowing larger crowds at weddings, sporting events, and festivals.
While the rest of Covid restrictions are set to continue, mainly because of the new Delta variant, smaller businesses and tourism could see a boost in July. The next governmental review of the pandemic status and a possible move to “remove all legal limits on social contact” in England is set for July 19th. This means that a lot of social distancing norms and movement restrictions could be lifted next month. What does this mean for UK shares?
Industries that could boom
When I look at the market right now, I see areas that the pandemic affected and also how easing certain restrictions, with time, could affect UK share prices. Take ITV for example. The popular broadcaster lost its FTSE 100 status in 2020 after the pandemic put a stop to media productions worldwide. But after the UK eased restrictions, advertisement revenue increased again with the return of popular programmes and the company was reinstated into the FTSE 100 list this month.
Similarly, a variety of industries will be poised for a rally once restrictions are completely lifted. The first UK share I’d look to buy now is Diageo. The next ease in restrictions will allow nightclubs to function and also potentially increase the crowd capacity for live events and music festivals. Diageo, the alcoholic beverage brand that owns labels like Guinness and Johnnie Walker, could see a strong spike in share price come July 19th. But considering that the brand’s share price has already hit pre-pandemic levels, the potential growth could be short-lived and reactionary and is currently not an option for long-term returns on my list.
Unilever is another company I’m monitoring closely. After a year indoors, the lure of more social engagements and outdoor time will bring with it a spike in sale of beauty and grooming products. I also predict a population more cognisant of germ spread once normal life resumes, which could boost sales of antibacterial products and hand sanitisers too. But one concerning fact is that the net revenue and operating income of the company dropped over 12% last year and this could be a sign of post-pandemic turbulence.
Of the list of stocks I’d buy today, International Consolidated Airlines Group (IAG) is sitting right on top. Once travel restrictions are completely lifted, I predict a major boost in tourism revenue. The government also reduced VAT rates for the tourism and hospitality sector which is why I’m watching this travel company closely. The IAG share price has remained stable for the past couple of months and a complete lift in travel restrictions, I think, could trigger a major price rise. But since this potential increase is dependent on many external factors and it is still to be seen how the public reacts to a lift in travel restrictions, I am watching IAG closely to try and gauge the potential long-term returns, despite the attractive entry point.
