SEE: SGX, UOB are PhillipCapital's top picks in banking and finance sector
The approval of Moderna’s and Pfizer’s vaccines can support 1.8 billion doses for 900 million people in 2021. Should all the 10 leading vaccines be approved, there is capacity for 9.3 billion doses in 2021, which is enough to cover some two thirds of the global population and most of the developed markets, which can bend the curve of infection in 2021. “Other factors that could unsettle markets are monetary-policy misjudgements by the Fed or foreign policy faux pas by the new US administration. But we think the likelihood of such pitfalls is low,” he adds. In 2021, Chew says he favours the hospitality, banks and REITs sectors. “We are taking a longer-term stance on hospitality. Pent-up demand for travel is likely to result in a prolonged upcycle for the hospitality industry,” he says. He has, however, warned against buying into the steep drops of airline stocks, citing two reasons. “Firstly, competition in the industry has not abated due to support from governments. Secondly, airlines are now even more leveraged than before the crisis,” he says.
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“While work-from-home trends had already taken root in the US before the pandemic, average leases of five years should anchor near-term yields, even if some tenants shift more aggressively and permanently to home-based work arrangements,” he notes. Under the Phillip Absolute 10 Model Portfolio, the brokerage has recommended “buy” on Ascott REIT, Asian Pay TV Trust and Manulife US REIT with target prices of $1.15, 15 cents and 92 cents respectively, for their yield, which stands at 3.7%, 8.8% and 8.6%.