Pharmaceutical stocks rallied back in July after news of the Covid-19 vaccine.
The vaccine story aside, Equitiestracker Holdings Bhd head of research Lim Tze Cheng said the demand for vitamins and general supplements has been strong during the movement control order (MCO), which would see pharmaceutical companies that deal more on supplements seeing stronger numbers in upcoming quarters.
“This is one of the factors why people are starting to relook at pharma counters, but today was mainly triggered by news of the vaccine.
“Secondly, pharmaceutical valuations have not been very high.
“The third factor is the rotational play.
Today, we are nearing the delivery date of the vaccines.
Today, the government said it plans to increase its purchase of the Covid-19 vaccine to cover the immunisation needs of about 60-70 per cent of Malaysians compared to 30 per cent currently.
The Ministry of Science, Technology and Innovation (MOSTI) has estimated that RM3 billion is needed to procure Covid-19 vaccines for Malaysians.
The direct beneficiaries would be the pharmaceutical companies.
With this news, will we witness another rally for pharmaceutical stocks?
Will history repeat itself?
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Pharmaniaga hits limit up, three others see big gains to record highs on Covid-19 vaccine hope
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KUALA LUMPUR (July 22): Pharmaniaga Bhd’s share price hit limit up today, while Apex Healthcare Bhd, Duopharma Biotech Bhd and Kotra Industries Bhd spiked to record highs among the top gainers on Bursa Malaysia as investors continued to pin their hopes on a Covid-19 vaccine to curb the pandemic.
At market close,
Apex Healthcare was up 91 sen or 29.74% to RM3.97, while
Kotra climbed 82 sen or 29.82% to RM3.57 and
Duopharma gained 68 sen or 29.82% to RM2.96,
to become the second, third and fourth largest gainers, respectively, across Bursa. All were at their record highs.
The top gainer was Pharmaniaga, which closed at RM4.55 after hitting limit up from a jump of RM1.05 or 30%.
Globally, it was reported yesterday that Asian shares hit a five-month high and European equity market futures extended gains as hopes that a vaccine against the Covid-19 disease might be ready by year end supported riskier assets, following promising early data from trials of three potential vaccines.
"An experimental coronavirus vaccine being developed by AstraZeneca and Britain's University of Oxford was safe and produced an immune response in early-stage clinical trials, data showed, keeping alive the hope it could be in use by the end of the year.
"More than 150 possible vaccines are in various stages of development with US drugmaker Pfizer and China's CanSino Biologics also reporting positive responses for their candidates on Monday,” Reuters reported.
Pharmaniaga and Duopharma have been tasked with undertaking the Covid-19 vaccine packaging process, by the Malaysian government, once a vaccine is developed.
On July 14, news reports, quoting Science, Technology and Innovation Minister Khairy Jamaluddin, reported that Pharmaniaga and Duopharma would undertake the fill-and-finish processes of a Covid-19 vaccine once it is developed.
It was reported that Khairy said Prime Minister Tan Sri Muhyiddin Yassin had agreed for the facilities of the two companies to be utilised for the purpose, noting that the main challenge for the production of a vaccine is the finishing process.
Pharma stock play
With uncertainties still surrounding the development of a vaccine and with the World Health Organisation (WHO) saying “there is a long way to go”, analysts felt that the sudden spike in pharmaceutical counters was not fundamentally backed.
The top-six gainers on Bursa Malaysia yesterday were pharmaceutical companies, four of which had hit limit up.
Pharmaniaga Bhd
rose RM1.05 or 30% to RM4.55, Apex Healthcare Bhd was up 91 sen or 29.74% to RM3.97, Kotra Industries Bhd was up 82 sen or 29.82% to RM3.57 and Duopharma Biotech Bhd added 68 sen or 29.82% to close at RM2.96.
The vaccine story aside, Equitiestracker Holdings Bhd head
of research Lim Tze Cheng said the demand for vitamins and general
supplements has been strong during the movement control order (MCO),
which would see pharmaceutical companies that deal more on supplements
seeing stronger numbers in upcoming quarters.
“This is one of the factors why people are starting to relook at pharma counters, but today was mainly triggered by news of the vaccine.
“Secondly, pharmaceutical valuations have not been very high.
“The third factor is the rotational play.
“Investors have been looking at gloves all this while and now that there is a breath of fresh air, people will jump into it, ” he said.
https://www.thestar.com.my/business/business-news/2020/07/23/pharma-stock-play
https://klse.i3investor.com/blogs/Momentum/2020-12-13-story-h1537565273-Pharmaceutical_stock_play_Will_history_repeat_itself.jsp
