Tradeview Commentaries On Pfizer’s Covid-19 Vaccine - “Great News For Mankind.”

Dear all, with this news, there would be many concerned investors especially those holding glove stocks. Though this news is not entirely unexpected given Pfizer has highlighted that by end November they will seek FDA approval but the sudden headline news today coupled with the European and US market price reactions, it must have sent chills and cheers down the spine for investors depending which side you are on.

As how I have advised my private subscribers, I will share with all my humble perspective to all as this is a matter of public interests for the investment community. I will get right to it.

In this year we have gone through the cycle many times. The earnings of glove stocks will not be impacted at least in the next 1 year with the introduction of vaccine because the orders are locked in and deposits are paid. The opposite is true, meaning, those who are reacting to this “great news for mankind” are getting ahead of themselves. Recovery stocks and tourism plays are still too soon. Their earnings will not recover in the next 1 year. But the foreclosure risk / default risk for these companies have reduced significantly with Pfizer’s drug success.

We must not forget though, all of Pfizer’s drug has all been bought up by rich developed nations. Developing and emerging countries are left with the Covax programme or possibly Chinese vaccine. Though this news is good if proven effective, the eradication of Covid-19 is not overnight.

The market is not rational and tend to overreact both ways. So I believe tomorrow glove stocks will sell off initially then recover lose ground just like what is happening to Mercator Medical now. Those Covid related healthcare penny stocks with no fundamentals will be the worst hit. Tech stocks may selloff too.

Vaccine plays will lead the way. Banks and index linked stocks will rebound strongly too.

My advice on the move you should adopt for tomorrow and the coming weeks ;

Market is never rational and herd mentality is very dangerous. But don’t be caught up in it. Panic selling get you no where. Do not rush to average down and do not chase recovery plays indiscriminately. Though it is hard to see it, Stocks backed by earnings are still the best to stocks to invest it be it good times or bad. That includes glove, tech, banks, select blue chips.

Source : www.tradeview.my