Airlines take off but glovemakers blow out

Airlines have taken off in Asia as news of a vaccine breakthrough fuelled hopes on Tuesday that the world can finally begin returning to normal.

Japan Airlines soared by a fifth with traders betting on a recovery in the shattered tourism sector.

But it wasn’t all sunshine and light on trading floors as surgical glovemakers, tech giants and others that have benefited from the Covid-19 impact this year were tossed away.

Global markets have soared after US giant Pfizer and its German partner BioNTech announced on Monday that a phase-3 trial showed their vaccine candidate was 90% effective in preventing coronavirus infections.

Investors have been rushing back into embattled companies that have been ravaged by lockdowns imposed around the world to contain the disease, which has killed more than 1.2 million people.

“Bombed-out sectors such as aviation, travel, leisure, big oil and yes, our beloved banks, time-warped back to 2019 with giant rallies,” said Jeffrey Halley, senior market analyst from Oanda.

Airlines, suffering their worst-ever crisis, led the way, with Japan Airlines cruising up 20%, Singapore Airlines flying 14% and Cathay Pacific rocketing more than 11% on hopes people will be able to get back in the air.

Expectations that demand will pick up as people travel more pushed energy firms higher, with Hong Kong-listed CNOOC up more than 12% and Papua New Guinea-focused Oil Search putting on 16% in Sydney.

Property developers were also winners with Singapore-traded CapitaLand putting on about 4% while Hong Kong’s New World Development moved up more than 5%.

However, there were also big losers - firms that have enjoyed large gains for most of the year thanks to the surge in demand for medical equipment to treat the virus and technology from people stuck at home in lockdowns.

Malaysia’s Top Glove, the world’s biggest maker of surgical gloves, fell more than 8% in Kuala Lumpur - though that was a small bite out of the more than 400% rise it has enjoyed since the start of the year.

Another glove manufacturer, Supermax, cratered more than 8% in Malaysia, having racked up gains of more than 1,100% in the past 10 months.

Meanwhile, gaming giants were deep in the red, just as the sector prepares for the holiday season and the next era of computer consoles with Microsoft putting its new Xbox on sale.

Sony, which puts its PlayStation 5 on shelves on Thursday, shed 3% in Tokyo while rival Nintendo dropped more than 2%.

Published in The Express Tribune, November 11^th, 2020.

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