KUALA LUMPUR, Nov 20 ― CGS-CIMB Securities Sdn Bhd said investors’ pandemic recovery play in their investment strategy is expected to gain momentum in light of the positive news on the development of the Covid-19 vaccine.
In a research note today, CGS-CIMB said a vaccine discovery would indicate that the worst may be over for the ongoing pandemic.
This would likely prompt investors to take profit on Covid-19 beneficiary stocks such as gloves and technology sectors, which performed extremely well in terms of share price performances year-to-date, it said.
“In our second half of 2020 (2H20) strategy note, we mooted the Covid-19 recovery theme and advised investors to start accumulating stocks in these sectors due to their attractive valuations and on expectations of an earnings recovery post-pandemic in 2021.
“We have identified the gaming, airline, airport, REIT (real estate investment trust), media, bank, hospital, brewer, tobacco, and oil and gas (O&G) sectors as those that could bounce back once Covid-19 cases subside globally or when a vaccine is developed, resulting in the gradual reopening of international borders,” the research house said.
For exposure to the economic recovery post-Covid-19, CGS-CIMB said it favours the banking sector, which was recently upgraded to an “overweight” stance, as most of the bad news has been priced in.
“Our top picks in the banking sector are Public Bank Bhd, Hong Leong Bank Bhd, RHB Bank Bhd and AMMB Holdings Bhd,” it noted.
CGS-CIMB viewed that the media sector is likely to see a recovery in advertising expenditure revenue, with Astro as its top pick.
It added the O&G sector could also benefit if crude oil prices recover amid higher oil demand, naming Yinson Holdings Bhd and Dialog Group Bhd as its top picks. ― Bernama
