HONG KONG (BLOOMBERG) - Shares tied to reopening trades from casinos to airlines surged in Asia on Monday (Nov 8) after Pfizer said that its Covid-19 pill could reduce hospitalisations and deaths in high-risk patients by 89 per cent.
A Bloomberg gauge of Macau casino shares jumped 7.2 per cent, the biggest move in more than two months, while an index of Asia-Pacific airline stocks rallied as much as 5.5 per cent, the most since March. Luggage manufacturer Samsonite International climbed 15 per cent in Hong Kong.
In Singapore, shares of Singapore Airlines (SIA) hit a morning high of $5.51, up 4.4 per cent, before trading 14 cents higher, or 2.65 per cent, at $5.42 at 1.03pm.
Ground handler Sats was trading up 10 cents, or 2.4 per cent, at $4.28, while SIA Engineering, SIA's maintenance arm, rose five cents, or 2.25 per cent, to $2.27.
Casino and resorts group Genting Singapore, the third-heaviest counter by volume, climbed 1.5 cents, or 1.9 per cent, to 80.5 cents, after earlier hitting 81.5 cents.
Wall Street's main indexes scored record closing highs on Friday and booked solid gains for the week following a strong United States jobs report and Pfizer's announcement.
The buying frenzy that followed in Asia - which tracks gains among similar stocks in the US - comes as Pfizer looked to become the second pharmaceutical company to offer an oral pill to combat the virus. While Pfizer's drug has yet to receive emergency authorisation from US regulators, investors say that it shows promise to help ease the pandemic globally and accelerate a return to travel.
The pill is "bringing some hope that reopening will be able to take place more smoothly, especially if the pill is able to reduce the strain on hospital capacity," said IG Asia market strategist Yeap Jun Rong. "The fact that it is an oral treatment may also suggest that it may be more well-received, along with its high efficacy."
Meanwhile, makers of Covid-19 vaccines and treatments in the region slumped, with CanSino Biologics sinking as much as 20 per cent in Hong Kong. Wuxi Biologics Cayman, which makes ingredients for AstraZeneca's vaccine, and Shanghai Fosun Pharmaceutical Group, fell by at least 9.7 per cent in Hong Kong.
If successful, Pfizer's pill "may create uncertainties for earnings outlook and valuations of Chinese vaccine makers", said CMB International Securities strategist Daniel So. "The impacts are expected to be of mid-to-long-term."
In Japan, Shionogi & Co, which has been developing a rival drug to Pfizer's, fell the most since March last year. The firm is expecting late-stage trial data on that treatment by next month. Takara Bio, which has a contract to produce mRNA vaccines in Japan starting next year, fell the most since May of last year.
Fujifilm Holdings, which is reported to seek US emergency use authorisation for its anti-flu drug Avigan as a Covid-19 treatment, dropped 2.6 per cent.
Last month, Merck & Co submitted its experimental treatment to regulators, after a study showed it slashed the risk of getting seriously ill or dying by half in certain patients. Vaccine related shares also plunged after that news.
