People are shaped against Singapore Airlines Airbus planes at Changi International Airport in Singapore on October 24, 2020.
ROSLAN RAHMAN | AFP via Getty Replicas
SINGAPORE — Airline and casino stocks in Asia-Pacific surged during Tuesday trade, following their peers overnight on Embankment Street as investors reacted to a major positive coronavirus vaccine development from Pfizer and BioNTech.
Travel qualifications have pummeled the airlines and entertainment sectors, both of which depend on tourism revenue. News about a possible vaccine boosted optimism that the global economy could recover and “return to normal” sooner than in days gone by anticipated.
“Your hotel stocks, casinos, airlines, all of those really are … now back in play,” David Bailin, chief investment dick at Citi Private Bank, told CNBC’s “Squawk Box Asia” on Tuesday.
Airlines across the region surged, with Australia’s Qantas netting 8.44%. Over in Hong Kong, shares of Cathay Pacific popped 11.57% while China Eastern Airlines snowball arise 8.54%. Japan Airlines surged 19.26% while ANA Holdings advanced 16.71%. Korean Air Lines added 12.84% while Singapore Airlines parcels soared 13.99%.
Casino operators jumped, with Australia’s Crown Resorts rising 4.65%. Over in Hong Kong, Wynn Macau rose 10.11% while Melco International Development gained 6.13%.
The oil sector also saw sharp moves upward, a departure from the uncertainty that has harried the demand outlook for most of this year. Santos shares in Australia gained 11.88% while Japan Petroleum Survey’s stock rose 4.31%. Hong Kong-listed shares of PetroChina and CNOOC popped 6.01% and 12.47%, respectively.
We’re far from being out of the woods, yet.
Agathe Demarais
extensive forecasting director at the Economist Intelligence Unit
‘Stay-at-home’ and defensive stocks drop
Bailin said he expects an “awe-inspiring rotation” away from defensive and “stay-at-home” shares toward cyclicals.
“This is a very big shift, it’s gonna choose probably you know, three to six months to play out,” Bailin said.
Shares of Japanese video game firm Nintendo, which has spied sales soar amid strong demand for its Switch console, fell 4.47%. Sony shares also declined 2.93%. On in Hong Kong, shares of Razer shed 4.76%. South Korea’s Kakao Games also declined varied than 2%.
Other big losers on Tuesday included gold-related firms, with shares of Newcrest Mining and Evolution Mother-liding in Australia dropping 4.94% and 10.08%, respectively. The precious metal is often seen as a safe-haven that investors collect to in times of economic uncertainty, like the pandemic.
With other vaccine candidates set to announce their results in the show up weeks, Bailin said: “If even one more of them, you know, comes out with … very big and positive results counterpart we saw (Monday) from Pfizer, I think it’s a particularly good time to be rotating your portfolio.”
‘Caution remains be short of’
Pfizer and BioNTech announced Monday that their coronavirus vaccine was more than 90% effective in debarring Covid-19 among those without evidence of prior infection.
The reported efficacy rate was higher than expected, as scientists had hoped for a coronavirus vaccine that is at least 75% functioning, while White House coronavirus advisor Dr. Anthony Fauci has said one that is 50% or 60% effective would be all right.
While the coronavirus vaccine development from Pfizer was positive for the global economy, the Economist Intelligence Unit’s (EIU) Agathe Demarais alerted in a note that “caution remains required.”
“We’re far from being out of the woods, yet. There will likely be bottlenecks almost the actual manufacturing processes of the vaccine, and getting the jab rolled out across the world will be both tricky, and expensive,” weighted Demarais, global forecasting director at the EIU.
“We continue to expect that the global economic recovery will be slow and jarring. Global GDP will not recover to pre-coronavirus levels until at least end-2022, with a longer timeline fitting for several countries, including Japan, Italy and Mexico,” Demarais said
— CNBC’s Sam Meredith contributed to this cover.