Thailand
Brokers’ take: Tourism-dependent stocks to benefit from Malaysia reopening, says UOBKH
WITH Malaysia set to reopen its borders from Apr 1, tourism-related stocks would be the key beneficiary groups, said UOB Kay Hian analysts in a research report on Monday (Mar 28).
Tourism aside, e-payment services, brewery and selected retail real estate investment trusts, as well as manufacturers highly dependent on foreign workers, are also other sectors that could see an upturn, noted UOB Kay Hian’s analyst Vincent Khoo and the Malaysia research team.
Hospitality group Genting Malaysia, lottery operator Magnum and Covid-19 tests provider MYEG are among some of the top picks by the analysts.
Other top picks include e-payment services provider GHL, brewery Heineken and Pavillion Reit.
Besides Genting Malaysia and MYEG, UOB Kay Hian estimates that other companies such as airport operator Malaysia Airports Holdings and Capital A – the holding company for the AirAsia airline – would see a more than 20 per cent impact on its revenue or profit with the reopening of borders.
Malaysia’s reopening, which falls on the same day as Singapore’s lifting of border restrictions, would likely result in a surge in inbound and outbound tourism as fully-vaccinated travellers would no longer need to be quarantined and testing costs are reduced, said UOB Kay Hian.
Foreign visitors would be able to boost consumer demand and Malaysia’s manufacturers may be able to clinch new contracts as business travel also revives.
However, UOB Kay Hian said that demand would not recover to levels before the Covid-19 pandemic in the near term due to the absence of tourists from China, and there may still be some quarters who are not willing to travel due to the high number of Omicron infections.
“Nevertheless, we would expect investors to re-rate the reopening beneficiaries and substantially price a fuller recovery in 2023,” read the report.
Source: https://www.businesstimes.com.sg/asean-business/brokers-take-tourism-dependent-stocks-to-benefit-from-malaysia-reopening-says-uobkh