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Article | 07 December 2020 |
10.8%S&P 500 |
18.1%EURO STOXX 50 |
11.8%NASDAQ |
21.8%SET 50 |
15.8%STI |
9.4%JCI |
9.3%HSI |
7.4%PSEI |
11.1%TOPIX |
| Source: Bloomberg 30.11.2020 |
Positive news emerged from a trio of Covid-19 vaccine trials. Separate vaccines from Pfizer, Moderna and AstraZeneca were shown to be up to 95% effective. The need remains pressing, as the worldwide tally of coronavirus cases topped 55 million. If licences are granted for urgent use, then the rollout of a global vaccination programme can begin. The news triggered a relief rally in major equity markets. Although not all companies will benefit. Some Asian manufacturers of PPE, including protective gloves, saw their stock prices fall sharply.
Tesla will be admitted to the S&P500 in December. A momentous event, because the electric vehicle pioneer is the biggest stock ever to join the US index. More than twice the size of giants Google and Facebook when they joined. That matters, because index or passive funds are forced to own the stock, or be in breach of their tracking error limits. A surge of buying began and Tesla’s market cap topped $500 billion. Founder Elon Musk’s fortune accelerated, making him the second richest man in the world.
This snappy sound bite captures how some Asian economies are emerging as clear winners in the race to recovery post pandemic. The reason appears to be twofold. Not only has effective protection against wide-scale Covid-19 outbreaks allowed a faster return to normal conditions. But also, many Asian economies are skewed to producing products which have benefited from the new way of working under lockdown. While interest in ‘old economy’ products might have fizzled, demand for laptops, communication equipment and other electronics has rocketed.
