See: DBS Research bets Covid-19 recovery hopes on Covid-19 vaccine in 2021
“Assuming a positive outcome from these four vaccine developers, their combined manufacturing capacity could cover 1.9-2.5 billion people by end-2021, representing 25-32% of the total world population,” says a team of DBS Research Group analysts headed by Yeo Kee Yan.
But with no guarantee that each one of these trials will see a positive outcome, the team warns that it could take some time before the public can accept a vaccine developed at “record speed” vis-a-vis the usual 10-15 year timeframe. The logistics of vaccine distribution could also present a challenge, as the Pfizer-BioNTech candidate must be stored at around -75 degrees Celcius to remain viable.
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Notwithstanding these challenges, a successful vaccine could bring much-needed cheer to equity markets. “Short covering likely popped up aviation and travel/leisure stocks in reaction to the Pfizer-BioNTech news,” the team writes. Even if this sharp spike proves temporary, the team sees the good news enticing bargain hunters and more short-covering activities as markets anticipate a steadier recovery from 2H2021.
Promising aviation stocks include SATS, China Aviation Oil, BOC Aviation, Air China and Malaysia Airports. For the travel and leisure sector, ART, CDL, HT, Sands China, Samsonite, Sunway, Erawan and Siam Wellness look to be promising options.
For domestic recovery plays, the team likes ComfortDelgro, FCT, Luk Fook, Chow Sang Sang, Bangkok Dusit, Ayala Land, Megawide Construction, Robinson Land, Robinson Retail Holdings, SM Investment and SM Prime Holdings.
