Watch out for Omicron, as the new Covid-19 variant is set to exert short-term pressure on reopening names in travel and hospitality, along with office and retail segments, say DBS Group Research analysts Paul Yong and Yeo Kee Yan.

“In the short-term, we can expect news flow on travel restrictions and local variant cases to get worse before it gets better. There will be more uncertainties in the next two weeks and the situation may get better or worse depending on how effective current vaccines are versus the Omicron variant, or how easily vaccines and oral pills can be tweaked to meet the new threat. The fatality rate and seriousness of the symptoms of this variant will also have implications on how the situation will evolve,” write Yong and Yeo in a Nov 29 note. 

Yong and Yeo highlight seven vaccine beneficiaries index component stocks (Thai Beverage Public Company, Singapore Airlines, CapitaLand Integrated Commercial Trust, Genting Singapore, Mapletree Commercial Trust, SATS, ComfortDelGro) that make up a moderate 13.7% of STI market cap. 

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