Among pharmaceutical companies, the development of vaccines against the coronavirus (SARS-CoV-2) has become a race against competitors, and a race against time. The completion of such a crucial vaccine will ultimately produce breakthroughs across all sectors of life, encompassing health, lifestyle, or even the capital market. The World Health Organization (WHO) notes that there are 24 vaccine candidates currently being clinically tested to humans. Amidst the numerous, some of the few prominent companies include Moderna, AstraZeneca, and Sinovac, who are in the late stages of completing their final trials. Moderna themselves, following their trial vaccine data release, had their shares rise by 12%. Additionally, even if the vaccine were to be completed, the amount in which it can be produced could cause unrest as it is feared that only a selected few (presumably the wealthy and privileged) could obtain the vaccines. As a result, GAVI (the Global Vaccine Alliance) continues to strive for Covid-19 vaccines to become public goods through a program called the COVAX Facility, to explain whether all countries will get vaccines. Until July 15, 2020, there have already been 75 countries interested in joining the COVAX Facility. Seventy-five of these countries will help fund vaccine development and work with 90 other low-income countries supported by GAVI.
Out of three leading vaccine-producing companies, it was the Sinovac vaccine which arrived in Indonesia (7/20). Restating the previous data, the three companies include Moderna (USA), AstraZeneca (UK), and Sinovac (China). Yet, Indonesia chose Sinovac because its progression was faster than the others, and it has also been working with other countries such as Brazil, Bangladesh, Chile, and Turkey. Hence, there is still hope for Indonesia to return to normal. After the Sinovac vaccine arrived, shares of two Bio Farma subsidiaries, Indofarma (INAF) streak 5.36% to a price level of Rp1,180/unit while KAEF flew 5.47% to a price level of Rp1,350/unit. Today (7/22), pharmaceutical stocks have continued to rise, i.e., INAF shares rose at a price level of Rp1,880/unit after a 3-day INAF rally of 67.85% while KAEF flew to a price level of Rp2,140/unit after three days KAEF rose 67.18%. On the other hand, shares of pharmaceutical issuer PT Pyridam Farma Tbk (PYFA) managed to shot 23.03% to the level of Rp1,015/unit from the previous closing of Rp825/unit and shares of PT Kalbe Farma Tbk (KLBF) also went up by 3.62% at the level of Rp1,575/unit from the final closing level of Rp1,520/unit.
The sudden surge in pharmaceutical stocks in response to the arrival of the COVID-19 vaccine candidate brought positive sentiment toward the benchmark Jakarta Composite Index (JCI) performance. The index climbed for 63.6 points / 1.26% which eventually closed at 5,114.17 on Tuesday (7/21), as it represents JCI’s safe position in the green zone. Some stocks that became the 'steering wheel' of the JCI performance on Wednesday are PT Indofarma Tbk (INAF) (24,90%), PT Kimia Farma Tbk (KAEF) (24,73%), PT Matahari Department Store Tbk (LPPF) (16,60%), PT Envy Technologies Indonesia Tbk (ENVY) (13,76%), and PT Pelat Timah Nusantara Tbk (NIKL) (13,64%). Responding to the aforementioned news, Artha Sekuritas analyst Dennies Christopher Jordan suggested that the index shows the potential of short-term strengthening. The director of Indosurya Bersinar Sekuritas, William Surya Wijaya, also suggested that investors should monitor fluctuations in the rupiah exchange rate and the nation's commodity prices that 'colored' the index movements. Overall, aside from the convincing COVID-19 vaccine progress, positive sentiment toward the JCI was also due to the rise in US Wall Street. On Tuesday, the Dow Jones Industrial Average rose 0.60% to 26,840.40 and the S&P 500 rose 0.17% to 3,257.30, in which the main reason was due to the climb in shares of giant energy companies such as Chevron (CVX) and Exxon Mobil (XOM).
Sources:
CNBC
BBC
Kompas
CNN Indonesia
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