Pfizer’s Vaccine Potential Bolted Global Markets



Between the legions of drug-producing titans spread across the globe, the search for the COVID-19 cure has always been a race against time. Among the many lies the company, Pfizer (PFE), a pharmaceutical giant. Pfizer developed its vaccine candidate in collaboration with BioNTECH (BNTX), a German drug-making company. The test run from Pfizer was conducted with the help of 43,538 participants (42% of different backgrounds), leading to a result that possessed a 90% effective rate in preventing the disease. Furthermore, the collaborating team are currently seeking approval from the Food and Drug Administration. If the authorization process runs smoothly, Pfizer boldly claims that they can produce 50 million doses in 2020 and up to 1.3 billion doses in 2021. Subsequently, this overawe achievement from Pfizer caused their shares to increase by 13% on Tuesday (11/10). Their announcement of success was such a massive feat that that the impact was not only experienced by Pfizer, but it also managed to revive people's trust in the Airlines and Energy industries (based on the shares of numerous companies). Despite the great news, there will always be the other side to winners, where companies that excels during the pandemic such as Zoom, Slack, and the likes, have went bearish afterwards.


As the good news from Pfizer and BioNtech arose, Wall Street's enthusiasm kicked into an even higher gear. Apart from the increases in Pfizer and BioNtech itself, on Monday (11/09) the increase was also experienced by other companies that are also engaged in the vaccine sector such as Moderna and Johnson & Johnson, which rose from 7.3% to 77.74 and 2.6% to 146.08. As the recent news, companies are soaring on the hopeful vaccine news. The prospect of an effective coronavirus vaccine has people dreaming of a return to normalcy which affected the shares of movie theater chain AMC (AMC) to jump for 60% as well as Retailers The SPDR S&P Retail ETF (XRT), which holds Gap (GPS), Best Buy (BBY), Target (TGT) and other big chains, also up for 2%. The impact was also felt by the travel and leisure sectors, where Disney (DIS) increased by 11.8% while Booking.com (BKNG) increased by 18.7%. Unfortunately, hopes of a return to normal condition have flagged tech stocks, or as we say companies that have benefited from the work-from-home and stay at home trends, Zoom (ZM) plunged by 17.3% to 413.24. as well as Netflix (NFLX) which is also as low as 8.5% due to the potential bet that consumers may spend less time indoors to binge watch TV shows and movies. This statement is also supported by Jim Paulsen, Chief Investment Strategist of Leuthold Group as he said that, “Since the vaccine announcement before yesterday’s open, investors have been selling ‘stay at home stocks,’ mostly technology and communications, and buying ‘economy reopening stocks’'.


On Tuesday (11/10), IHSG closed at 5,463.73 after soaring up 1.99% following the late news of the Pfizer vaccine's success. Trade data shows that foreign investors made a net buying of Rp 1.73 trillion on the regular market with a transaction value of Rp 15.4 trillion. Edwin Sebayang, Head of Research at MNC Sekuritas, said that the strengthening of the US benchmark index, namely the Dow Jones Industrial Average (DJIA), enhances the positive sentiment toward stocks listed in the IDX to rise significantly. On Wednesday (11/11), IHSG reopened to 5,475.56 and closed surpassing 5,500, to a tremendous 5,509.51 after adding up by 0.62%. According to Artha Securities' analyst, Dennies Christoper Jordan, besides the positive sentiments brought by the vaccine news and the once in a four-year US election, the economic data set to be released by Indonesia's government will also color the IHSG current movement. "Investors will be waiting for several economic data, including domestic retail sales data. Technically, the range of future strengthening of the market is starting to be limited," he explained as quoted from his daily research. He also projected that the index would be moving around support 5,390-5,426 and resistance 5,483-5,504. To sum up, global issues vastly affect the global stock market's movement including in Indonesia. However, the nation's economic stability and conditions also remarkably impactful toward the capital market perspective.


Sources

CNBC

CNN Indonesia

Forbes

The New York Times


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