Hot stocks: Aviation, tourism-linked counters rise on easing of Covid-19 measures

TRANSPORT, hospitality and select consumer and healthcare stocks are expected to benefit from Singapore's latest easing of a slew of Covid-19 measures, with some already seeing surges throughout the trading session on Thursday (Mar 24).

Prime Minister Lee Hsien Loong had announced these changes, including the streamlining of travel requirements, in a nationwide address at 11am.

Shares of C6L went up 2.9 per cent, or S$0.15 at S$5.33, with 13.7 million securities changing hands at 11.45 am, shortly after the end of Lee's televised speech.

Its maintenance arm S59 also rose 2.2 per cent, or S$0.05 at S$2.28, with over 1.2 million securities being transacted.

Meanwhile, group handler S58 gained 3.8 per cent or S$0.15 to S$4.12 at 11.48 am.

Hospitality group G13 was one of the most traded counter, with over 46.5 million shares being transacted. Its share price increased 3.2 per cent or S$0.025 at S$0.82.

Transport company C52 was also heavily traded, with 21.6 million shares changing hands at around 11.50 am. Its share price went up 4.2 per cent or S$0.06 at S$1.48.

These counters continued the uptrend throughout Thursday's trading and all of them closed higher by more than 3 per cent.

While aviation and other travel-related stocks like SIA and Genting Singapore are obvious beneficiaries from the scaling down of Covid-19 restrictions, DBS equity analysts Yeo Kee Yan and Yong Woon Bing said, in response to queries from The Business Times, that simplifying travel requirements could also boost occupancies and activity for hospitality and tourism plays, if arrivals to Singapore do pick up. Hence, they picked counters such as J85 and Q5T that could potentially see gains.

"The pace of recovery could be quicker as well in view of a wider Asean (Association of South-East Asian Nations) opening," they added.

DBS analysts also expects medical tourism to make a comeback, which may help boost the stocks of BSL and Q0F , although this may be slightly offset by lower demand for Covid-19 testing.

The increase in the maximum size of social gatherings and allowing more workers to come back to office will drive increased mobility and may benefit transport stocks like ComfortDelGro, as well as coffee shop operators such as 1D0 , noted Yeo and Yong.

T82U could also see increased activity for meetings, incentives, conferences and exhibitions with the government increasing the capacity limit for large events to 75 per cent.

In a research note sent out on Thursday by Citi, analysts also noted that stronger investor interest could boost commercial and office Reits, like C38U, JYEU and K71U .

Some of this positive sentiment on the Reits may have already been reflected in Thursday's market. While the unit price of some only had modest gains, others like CDL Hospitality Trust and Lendlease Global Commercial Reit jumped by more than 5 per cent.

While these stocks that have been affected by measures to curb the spread of Covid-19 may be making a comeback, those that benefitted at the height of the pandemic would be negatively impacted by Thursday's announcement, said Terence Wong, chief executive of fund-management firm Azure Capital, who did not want to name specific stocks.

Some of these counters could include glove and personal protective equipment (PPE) manfacturers. The share price of PPE manufacturer 546 fell by 4.3 per cent, or S$0.01 at S$0.225.

DBS analysts Yeo and Yong said that supermarket OV8 , which saw its share price rise significantly in 2020, could see grocery demand normalise, although this is likely to take time and demand will remain above pre-Covid levels.

READ MORE:

• Fully-vaccinated Singapore residents, long-term pass holders no longer need to pay for Covid-19 treatment post-travel
• Vaccinated travellers to enter Singapore quarantine-free without need for VTLs from April
• Singapore lifts Covid restrictions on social events, live performances and alcohol past 10.30pm
• Singapore urges second booster shot for seniors aged 80 and up, other at-risk groups
• Singapore to 'drastically streamline' testing, quarantine rules with Vaccinated Travel Framework
• Group size to double to 10 pax; masks no longer needed outdoors from Mar 29