During his presentation at the Bennelong media briefing, Kristiaan Rehder, portfolio manager at Kardinia Capital, explained to investors that in the same way e-commerce stocks were the major winners from lockdowns, new stocks will emerge as economies around the world reopen.
“You will have stocks that will be the major beneficiaries of reopening up of economies as well as the greater freedom of movement of people,” Mr Rehder said.
He pointed out that if investors are positioning correctly, they are susceptible to risk of a vaccine.
“On the day after the Pfizer announcement a couple of weeks ago, we saw our reopening stocks up 6 per cent but our lockdown stocks down 8 per cent, so that is a 14 per cent differential,” Mr Rehder said.
“It was a tremendously violent rotation we saw that day.”
“When you see a violent rotation like that, it tends not to be a one-day event, and I suspect it could be a feature going through to 2021.”
Stocks to watch
While pointing out he was slowly accumulating stocks over the months prior, the investor pointed to a number of travel stocks that could have a tailwind of borders reopening.
“We started accumulating stocks like Flight Centre, Sydney Airport and Star Entertainment.
“We think this has further to go. We think economies are slowly going to be opening up and not just here in Australia,” Mr Rehder said.
The portfolio manager noted that the risks with COVID-19 are not over, but economies are improving on their lockdown procedures.
“Obviously, we’ve seen further restrictions in Europe, but if you look at the approach of the Germans, for example, compared to how they confronted the virus during the first wave, it’s a very different approach. They are using a targeted approach of restricting movement. Schools are still open as they target the bars, restaurants and nightclub scenes.
“So, I think there is going to be increasing momentum to open up, and if there’s restrictions to be had, it will be targeted. This will provide a tailwind for a number of these reopening type stocks,” Mr Rehder concluded.
About the author
