Pfizer’s Covid-19 pill is shaking up the global recovery trade

Shares tied to reopening trades from casinos to airlines surged in Asia on Monday after Pfizer said its Covid-19 pill could reduce hospitalisation and deaths in high-risk patients by 89%. 

A Bloomberg gauge of Macau casino shares jumped 7.2%, the biggest move in more than two months, while an index of Asia-Pacific airline stocks rallied as much as 5.5%, the most since March. Luggage manufacturer Samsonite International SA climbed 15% in Hong Kong. 

The buying frenzy 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 coronavirus. While Pfizer’s drug has yet to receive emergency authorisation from US regulators, investors said 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 Jun Rong Yeap, market strategist with IG Asia . in Singapore.

“The fact that it is an oral treatment may also suggest 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% in Hong Kong. Wuxi Biologics Cayman, which makes ingredients for AstraZeneca’s vaccine, and Shanghai Fosun Pharmaceutical Group fell by at least 9.7% in Hong Kong.

If successful, Pfizer’s pill “may create uncertainties for earnings outlook and valuations of Chinese vaccine makers”, said Daniel So, a strategist at CMB International Securities.

“The impacts are expected to be mid- to long-term.”

In Japan, Shionogi., which has been developing a rival drug to Pfizer’s, fell the most since March 2020. The firm is expecting late stage trial data on that treatment by December. Takara Bio., which has a contract to produce mRNA vaccines in Japan starting next year, fell the most since May 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%. 

Last month, Merck . submitted its experimental treatment to regulators after a study showed it slashed the risk of getting seriously ill or dying by half in some patients. Vaccine-related shares also plunged after that news.

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