By Tom Westbrook and Elizabeth Howcroft
SYDNEY / LONDON (Reuters) – Investors expecting an upcoming COVID-19 vaccine are beginning to buy banking and industrial stocks in the hopes of strong consumer confidence again, wearing though many remain wary of the risks in the areas ravaged by the pandemic.
The development of several preventive drugs is seen as the best chance to stop the coronavirus, which has killed 1.2 million people and is a leading issue for money regulators when it comes to The next big change in financial markets.
As the market inflates around the US election, investors are now preparing for the good news about vaccines, which they believe is a matter of when, not if.
“It̵7;s going to be huge,” said Stuart Oakley, head of cash transactions at Nomura in London. “If we get vaccinated, we’ll see all those repressed needs emerge.”
Of about 45 vaccines currently being tested in humans, those are by Pfizer
Investors are looking beyond a much anticipated “rally” and at the longer term beneficiaries and short selling opportunities.
Binay Chandgothia, a Hong Kong-based portfolio manager at Global Investments, said: “What we have done is give ourselves some options for rebound trading, or Vaccine transactions, by financial exposure.
Banks benefit from increased economic activity, he said, and will be helped if bond yields rise, while increasing exposure to growth-sensitive small companies that will buy. shares in Singapore and Hong Kong if trade and tourism activity increases.
Brian Jacobsen, senior investment strategist at Wells Fargo Asset Management in Wisconsin, says industrial companies offer broad exposure to a recovery of confidence in areas from product building to manufacturing. are not.
Deutsche Bank runs a “vaccine basket” of Singapore dollars and Thai baht, believed to benefit from increased trade and tourism, compared to the Philippine peso, which is weighed down by rising imports. .
Finance <.dMIWO0FN00PUS> and industry <.MIWO0IN00PUS> rose with the broader market this month, but lagged significantly behind with a roughly 5% gain in world stocks. <.MIWO00000PUS> This year. The baht has also risen recently against the peso
THREAD THE NEEDLE
Investors are also setting up short positions.
Shinji Naito at Japan’s SPARX Asset Management, which has $ 12 billion under management, hopes a vaccine could trigger profits from short sales pumped up by the pandemic, such as some technology companies, also helping long-term investments such as real estate broker Tokyo Tatemono <8804.T>.
Dave Wang, a portfolio manager at Nuvest Capital in Singapore, said long-short pairs could profit from what is likely to be an uneven rally.
For example, airports, which charge per aircraft regardless of their payload, may outperform airlines affected by low patronage and increased fuel costs.
Of course, not everyone vies for an action part amid questions of the timing, effectiveness, and distribution of any vaccine remaining.
Hugh Dive, chief investment officer at Atlas Funds Management in Sydney, said: “It’s better to go a little too late than too early, and note that delay puts companies under pressure. have to raise more money quickly.
Others, however, feel that it is now safe to bet on the global recovery, which a vaccine will advance.
“I think there are two different deals,” said Sean Taylor, Asia Investment Manager at German fund management firm DWS. “The vaccine trade and the cyclical trade,” he said. I position more in the cyclical field. “If we have more reliable data for vaccines, then I will add services.”
(Reporting by Tom Westbrook in Singapore and Elizabeth Howcroft in London. Edited by Vidya Ranganathan and Sam Holmes)