MANY stocks which value has taken severe beating since the imposition of the movement control order (MCO) on March 18 are coming back to live at Bursa Malaysia today.
The Pfizer and BioNTech joint announcement that their vaccine candidate against COVID-19 has achieved success in the first interim analysis of Phase 3 clinical trials has been a god-sent gift to many travel/tourism-oriented and banking stocks insofar as today’s top gainers are concerned.
At time of writing, the FBK KLCI was up 37.94 points or 2.49% to 1,562.26 with gainers outpacing losers by 561 to 539.
At a glance, today’s performance very much mirrors that of Wall Street where stocks soared to dazzling heights during Monday’s overnight trading.
This follows the Pfizer and BioNTech announcement coupled with news flow that Joe Biden was projected to be the winner in the US presidential election race over the weekend.
The Dow Jones Industrial Average surged 834.57 points or almost 3% to close at 29,157.97, falling short of its February 12 all-time closing high of 29,551.42 but set a new intraday record high of 29,933.83.
The broader S&P 500, too, fell short of closing at a new record high, finishing up 1.2%.
UOB Kay Hian Research had Vincent Khoo opined that the highly encouraging preliminary results of Pfizer-BioNTech’s COVID-19 vaccine would further endorse the “economic re-opening” investment theme.
“(It) will be stronger and will stretch beyond today’s initial spike although we still expect significant profit-taking at some point as any meaningful rollout of a WHO (World Health Organisation)-endorsed vaccine in Malaysia would still take months to materialise,” he wrote in a strategic note.
“Naturally, we expect sectors/stocks that are the worst hit to rebound the most, especially for the tourism-related or dependent sectors (O&G, aviation, gaming, brewery and tobacco, and selected REITs).”
The research house recommends more liquid stocks such as Genting Malaysia Bhd, Genting Bhd, Astro Malaysia Holdings Bhd and Yinson Holdings Bhd which are in its “buy” list as well as selected banks such as RHB Bank Bhd, CIMB Group Holdings Bhd, and Malaysia Airports Holdings Bhd.
Khoo added: “Expect gloves stocks to soften although we continue to expect the downside to be more limited compared to the last quarter’s selloff, and to stage meaningful recoveries in December 2020 (catalysts include Top Glove Corp Bhd’s superb results and Supermax Corp Bhd’s inclusion into the FBM KLCI).” – Nov 10, 2020
