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Tue, November 10, 2020 – 2:58 pm
AVIATION and tourism stocks in Singapore continued to show strength in afternoon trading, as investors applauded the news that a Covid-19 vaccine being developed by Pfizer and BioNTech proved highly effective.
The Straits Times Index rose 2.9 percent or 76.5 points to 2,685.89 as of 2.53 p.m. Tuesday, with big gains coming from aviation and tourism-related stocks such as Singapore Airlines (SIA), SATS and Genting. Singapore. These companies are among the most affected by travel restrictions stemming from the coronavirus pandemic.
Jeffrey Halley, a senior market analyst at Oanda, said in a note that financial markets have accumulated on a rotating trade, favoring cyclical-value stocks.
“Regional stock markets in Asia, filled with legacy industries like banks, utilities, airlines and real estate companies, but light technology companies outperform,” Halley said.
Shares of Singaporean flag carrier SIA soared, rising 12.8 percent or S $ 0.44 per share to S $ 3.87 as of 2.11 pm. Earlier in the day, the accountant had traded as high as S $ 4.15, more than 20 percent above its previous close.
Meanwhile, integrated resort operator Genting Singapore also posted strong gains, rising 6.5 percent to trade at 73.5 Singapore cents. It was one of the most traded stocks on the exchange, with 73.9 million shares changing hands.
The trio of Singaporean banks also made solid gains, with DBS rising 5 percent to S $ 24.10 as of 2:10 p.m. OCBC and UOB were also trading higher, 3% and 2.6% respectively.
In other parts of Asia-Pacific, airlines also soared. Hong Kong’s Cathay Pacific Airways was up 11.6 percent to HK $ 6.27 at noon. Australia’s Qantas Airways rose 9 percent to A $ 5.10, while ANA in Japan was up 15.5 percent to 2,602 yen.
In general, markets in the region recovered mainly on Tuesday, maintaining their gains from Monday. By noon in Singapore, Japan’s Nikkei 225 was up 0.4%, Hong Kong’s Hang Seng Index was up 0.7% and Australia’s ASX 200 was up 0.8%.
While investors have been optimistic about the developments of the Covid-19 vaccine, some analysts were cautious about the speed of implementation of such vaccines, given that more tests are needed before the approval process can get underway. , manufacturing and distribution.
Reuters quoted Tai Hui, chief Asia market strategist at JPMorgan Asset Management, as saying that the vaccine, if it is truly effective, “is still months away from massive rollout.”
Oanda’s Halley also noted that travelers “will not be flying to Bali on long weekends next week, and Covid-19 will remain a genuine danger to millions for the foreseeable future.”
“Still, I hope that the excellent rotation trade persists for some time to come, unless vaccine candidates start hitting a wall of approval from the FDA (US Food and Drug Administration),” ” Added.
“Only a couple will have to pass for the music to keep playing.”
While previously defeated stocks in the aviation and tourism sector are now seeing strong gains, former beneficiaries of the Covid-19 pandemic such as glove and medical supply manufacturers, as well as stay-at-home businesses , fell drastically.
This is in line with trends in global markets, where stocks that had benefited from shutdowns and work-from-home deals, such as Netflix and Zoom Video Communications, tumbled to Monday’s close in the US. of the vaccine news.
Singapore-listed property developer soon to be glove maker Aspen Holdings was down 4 Singapore cents, or 13.1 percent, to 26.5 cents as of 2:19 p.m. Top Glove fell S $ 0.21 or 7.6% to S $ 2.57, while Medtecs International was down 12% to S $ 1.03.
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