COVID-19 is a global shock, disruption to both supply and demand, bringing our interconnected world economy to a near-standstill. Japan’s jobless rate rose to 3.0% in August 2020, the highest figure since mid-2017. As of September 2020, the UK has 1.62million people unemployed.

However, the US unemployment rate is starting to edge down. In November, the rate is down by 8.0% points from its recent high in April, but it is still 3.2% points higher than it was in February.

Does this mean the vaccine will bring hope for better days and economic recovery? The light at the end of the dark tunnel of the COVID-19 pandemic is beginning to come into sight.

Why do we need a vaccine?

The vaccine is vital to help us control epidemics. At the moment, it is only the current restriction, ban on international travel, migration and any types of movement that are preventing more people from catching the virus.

Vaccine work by teaching our bodies to fight off the infection when exposed in the future. Hence it will stop us from catching the COVID-19 or at least make it less deadly. 

With herd immunity, the large majority of the population are vaccinated, lowering the overall amount of virus able to spread in the whole population, making the virus rarer and saves lives. Having a vaccine, alongside better treatments, will be the only way for us to end this pandemic. 

 

COVID-19 VACCINE

When the virus was first reported in China in 2019, pharmaceuticals started the race for vaccines. Researchers across the world are trialling different technologies, some of which haven’t been used in a licensed vaccine before.

58 vaccines now have been developed and in clinical trials around the globe; with some vaccines reportedly having more than 90% efficacy against COVID-19.

 

BNT162b2

  • Its primary developers are Pfizer, BioNTech and Fosun Pharma.
  • They became the first in the world to conclude phase 3, release full late-stage trial data on November 18 meeting all primary efficacy endpoints.
  • The trial has been tested on 43,000 participants, no serious safety concerns observed. The only Grade 3 adverse event greater than 2% in frequency was fatigue at 3.8% and headache at 2.0%.
  • Data showed a vaccine efficacy rate of 95%.
  • Britain was the first country in the world to approve the shot for emergency use on December 3, followed by Canada on December 9 and the US Food and Drug Administration (FDA) on December 11.
  • The European Medicines Agency (EMA) is due to complete its review of the shot by December 29 and India is accelerating its review.
  • This vaccine will cost around $20 per dose.
  • On December 8, 90-year-old Margaret Keenan became the first patient to receive the vaccine at University Hospital in Coventry, UK.

 

Sputnik V

  • It is developed by the Gamaleya Institute, Russia.
  • This is the world’s first registered vaccine based on a well-studied human adenoviral vector-based platform.
  • The vaccine induced strong antibody and cellular immune response.
  • Clinical trials involved more than 40,000 people.
  • Not a single participant of the current clinical trials got infected with COVID-19 after being administered with the vaccine. 
  • Based on interim late-stage trial results, the vaccine is 91.4% efficient.
  • In Russia, vaccinations started in August and they have inoculated more than 100,000 people so far.
  • According to Sputnik V, over 30 countries had expressed interest in obtaining the vaccine, including the UAE, Saudi Arabia, Indonesia, Philippines, Brazil, Mexico, and India.

 

BBIBP-CorV

  • Its primary developer is China National Pharmaceutical Group (Sinopharm).
  • This was the first study of an inactivated SARS-CoV-2 vaccine to include participants older than 60 years—the most vulnerable age group for this infection.
  • From Phase 1 and 2 trial findings, the BBIBP-CorV vaccine was safe, tolerable, and immunogenic among healthy adults, whether they were younger than 60 or aged 60 plus.
  • On December 9, The United Arab Emirates announced the vaccine was 86% effective based on interim results from a late-stage trial in the Gulf Arab state. They have tested 31,000 volunteers.
  • This vaccine has been approved in China, UAE, and Bahrain.

 

mRNA-1273

  • Developed by Moderna and funded by the National Institute of Allergy and Infectious Diseases (NIAID).
  • Started phase 3 trials in July.
  • Run trial on 30,000 volunteers, only 11 people who received two doses of the vaccine developed COVID-19 symptoms after being infected with the pandemic coronavirus, versus 185 symptomatic cases in a placebo group.
  • The vaccine is showing a 94.1% efficacy rate.
  • Moderna plans to charge $32 to $50 per dose of the vaccine in developed countries, cheaper pricing for other parts of the world.
  • US Food and Drug Administration (FDA) advisers are due to review it on December 17 and the European Medicines Agency (EMA) will do so by January 12.
  • So far, The UK has ordered five million doses, the US has purchased 200 million doses, and the EU has a contract to purchase 80 million doses.

 

AZD1222

  • Developed by The University of Oxford and AstraZeneca.
  • It is made from a weakened version of a common cold virus from chimpanzees, that has been modified to not grow in humans.
  • At the moment, the vaccine is awaiting approval after announcing interim late-stage trial data on November 23.
  • The vaccine is 70.4% efficient and as much as 90% for a subgroup of trial participants who got a half dose first, followed by a full dose.
  • Trial with 20,000 participants enrolled across four clinical trials in the UK, Brazil, and South Africa. 
  • The vaccine is priced at approximately $2 to $4 per dose.
  • AstraZeneca has a $1.2 billion agreement with the US government to supply up to 300 million doses to Americans. 
  • The UK has ordered 100 million doses, Thailand has procured 26 million doses, and the Philippines has secured 2.6 million doses.

 

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How will the vaccine affect the property and commercial real estate?

The pandemic has created a global work-from-home trend. A survey done in March in Argentina alone shows that 93% of workers had adopted teleworking as a policy in response to the COVID-19 pandemic.

On November 6, since the vaccine announcement, the iShares Global REIT ETF, that tracks real estate stock around the world is up about 9%. Empire State Realty Trust, investment trust focuses on office and retail properties in Manhattan, increasing more than 37% after Pfizer’s news. With an effective vaccine, this means people can return to work in offices, in busy city centers. City will quickly be repopulated again.

On the other hand, if the economy is slowly going back to normality, demand for goods and services will raise future inflation expectations and borrowing rates will rise. 

Historically low interest rates drive the current real estate market. As rates increase, real estate becomes relatively expensive and this will bring the recent real estate party to a screeching halt.

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How will the vaccine affect tourism and hospitality?

Tourism and hospitality sectors have been among the hardest hit during the COVID-19 pandemic. Countries borders are shut, cruise ships were docked, theme parks were closed, and hotels were shut down all to control the spread.

Travel companies have been pinning their hopes on a Covid-19 vaccine saving their industry. When Pfizer announced their vaccine news, major cruise lines and hospitality operators cheered the breakthrough.

“TripAdvisor has long believed travel will recover with vigour as soon as a vaccine was widely available. Today’s Pfizer news is a welcomed step in the right direction,” said TripAdvisor CEO Steve Kaufer.

People have desperately missed the opportunity to go on holiday. Tour operators are seeing an increase in booking value by 20% in November, compared to pre-COVID times. Holidaymakers are making up for a lost time, they did not get a vacation this year, so they are making their next holiday just a little special.

Last month, The Comcast Corporation [Universal Parks and Resorts] was up 7%, Disney was up 12% along with SeaWorld up 18%. Expedia (travel booking firm) jumped 24%. Airbnb recently became a publicly-traded company on December 10, their stock price more than doubled in its blockbuster market debut.

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How will the vaccine affect transportation?

With more and more people feeling safe now that Covid vaccine proves effective, more people are going to be willing to travel. They will be ready to get on airplanes and cruise ships. According to tour operators, there has been an uptick in bookings since the news of the vaccine was announced.

After the Moderna news, shares of United Airlines gained as much as 8.6%, while American Airlines and Delta both jumped roughly 6%. Meanwhile, International Airlines Group (British Airways) rose 40% after Pfizer’s announcement.

For cruise lines, Royal Caribbean Group up 27%, Norwegian Cruise Line up 28%, and Carnival Corporation up over 37%. 

It’s not all good news, as many companies find teleworking to be an effective alternative to the daily commute, employees working from home, and less business travel can help reduce the cost of running a company.

“There are some estimates that demand could drop as much as 5% to 20% permanently, as companies come to see business travel as less of a necessity,” says Brendan Sobie, an independent aviation analyst.

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How will the vaccine affect pharmaceuticals?

Pharmaceuticals are the most hated industry in America. They are blamed for gouging prices on lifesaving drugs and enriching themselves through the opioid crisis.

Since the start of COVID-19, pharmaceutical companies and other health care stocks are in the race to develop the vaccines, hoping to redeem itself in the public’s mind.

Pfizer had to reestablish its antiviral research department for its Covid-19 work because the unit was dissolved in 2009 as antiviral research investment historically has not been a priority for the major drugmakers.

Since its vaccine announcement, Pfizer stock was up by almost 8% but declined the following day. As of midday trading on December 14, shares were above their 50-day moving average. 

It is vital to keep tabs on how pharmaceuticals stock performs, especially the one that develops the coronavirus vaccine. It is crucial to see how companies ramp up their manufacturing after it has been approved.

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How will the vaccine affect the e-commerce market?

Amazon, eBay, Alibaba are examples of companies whose share thrived during the pandemic as people spent more time logged on from home.

AliExpress platform has seen a 20% increase in traffic from Spain and Italy in their first quarter compared with the previous year. Before the vaccine news, Amazon shares were up 79.2%.

After Pfizer’s news, Amazon, whose online shopping services have been essential to millions throughout the pandemic, saw its shares tumble roughly 5.1%. 

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Are the consumers ready for the vaccine?

In November, a survey from 13,500 people across 15 countries showed that fewer participants were willing to accept the vaccine if it were to become available immediately. With 4 in 10 (41%) respondents stating they would get one at the time of the survey.

Among all countries surveyed, 65% of people in the UK showed the highest willingness to have a vaccine in 2021, followed by Denmark and Australia.

France also had the highest proportion of people who stated they were unwilling to get vaccinated. Over half (56%) responded that they were reluctant to have a vaccine immediately. 

More than half of global respondents (54%) were worried about possible side effects. The scientific community has worked hard in getting vaccine candidates through clinical development at an unprecedented speed to meet urgent public health needs. However, vaccines are only useful if people take them.

 

The road to recovery

After a year of limited activity, there will no doubt be many people looking forward to shop, travel, mingle, and enjoy a space that isn’t their own home. It is predicted global GDP will strengthen and become more confident from the middle of next year as COVID-19 vaccines are rolled out and restriction starts to ease.

There is no better time to invest than now, as businesses recover, the market will go from strength to strength.

 

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