A Covid-19 mass vaccination center in Rabin Square in Tel Aviv, Israel.
Photographer: Kobi Wolf / Bloomberg
Photographer: Kobi Wolf / Bloomberg
The race to deliver the jab to the world’s population has so far been led by a handful of smaller nations, and now they also surpass some of the richest countries in the eyes of merchants.
The fastest rollout of Covid-19 vaccinations worldwide, in Israel and the United Arab Emirates, is driving their shares towards some of the world’s biggest gains. Israel’s benchmark index is up 7.6% this year, outperforming both the S&P 500 and the Euro Stoxx Index. It ranks 12th among the most important power meters. Meanwhile, the Dubai Financial Market General Index is up 9%, but has virtually reversed the 10% drop in 2020, handing investors the sixth best return to date. The Abu Dhabi Securities Market General Index is the third best in the world.
Traders are rushing to price the global rollout of vaccines, and leading gambling countries will be the fastest to recover from the crisis by raising their stocks, currencies and bond yields. The proportion of a country’s population that has been vaccinated would, according to strategists at JPMorgan Chase & Co. “could be the most important statistic to keep track of in the coming year”.
Israel and the UAE have administered more doses per 100 people than any other country.
More than 63 million shots given: Covid-19 Vaccine Tracker
So far, Israel has vaccinated about 30% of its population and the UAE about 20%. If sustained, they could hit herd immunity threshold by mid-year, JPMorgan says.
“Will there be enough divergence regarding the immunity of the herd between countries to make this issue tradable across markets? Probably, ”strategists led by John Normand wrote in a January 8 note. “The countries fastest returning to pre-crisis activity levels as a result of a combination of stimulus and vaccine distribution should see the most upward pressure on their interest rates and currencies.”
While Israel and Dubai are tantalizing examples, the arguments for growth fueled by vaccinations in larger economies are murky, said Michael Herzum, who leads macro strategies at Union Investment in Frankfurt.
“It is difficult to isolate these effects from other market factors and therefore makes it difficult to play country for country,” said Herzum. Still, he builds up vaccination coverage in his asset allocation decisions.
In Britain, where the first citizen received the coronavirus vaccination outside a trial period on December 8, the FTSE 100 benchmark outperformed comparable European competitors, even as the population suffers a third national lockdown due to a resurgence of the virus and to suppress another fast. spreading variant. According to Herzum, vaccinations could pave the way to economic recovery and further boost the nation’s stocks.
“UK equities could be in a good position very quickly as the UK is likely to achieve herd immunity much faster than the continent due to much better progress in vaccinations,” he said. “This could result in a major reversal in economic activity once the Covid-19-related restrictions are lifted.”
– With the help of Farah Elbahrawy
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