Travel stocks turn red on new virus strain


CONCERNS over the discovery of a new coronavirus strain in the UK have pushed most travel-related stocks into the red yesterday as investor optimism around an economic reopening were dented.

The sudden spike in cases and uneasiness around the mutation of the virus has triggered a wave of new lockdowns and travel restrictions in the UK, with its capital put under Tier 4 lockdown, which among others, prevents people from gathering outside their homes.

Airline stocks fell yesterday with AirAsia Group Bhd seeing a 6.86% or six sen drop in its share price to 81.5 sen, while shares of its long-haul arm AirAsia X Bhd declined 6.67% or half a sen to seven sen.

Most hospitality stocks traded flat, with the exception of heavyweight Genting Malaysia Bhd, which fell by 5.43% or 15 sen to RM2.61, and Shangri-La Hotels (M) Bhd, which declined by 1.23% or five sen to RM4.02.

Berjaya Corp Bhd and Avillion Bhd’s shares ended flat at 18.5 sen and seven sen respectively, while Advance Synergy Bhd — which operates the Holiday Villa Hotels and Resorts chain — saw its share price kept at 14.5 sen.

Pan Malaysia Holdings Bhd, which runs the Corus Paradise Resort in Port Dickson, also traded flat yesterday to close at 10 sen.

Shares of bus services operators also took hits, with Gets Global Bhd leading the decline, down as much as 3.86% or eight sen to RM1.99, followed by Perak Transit Bhd with a 1.89% or half a sen drop in its share price to 26 sen.

The newly identified mutated Covid-19 strain in the UK is thought to be significantly more infectious than the original strain, British health officials said. However, there is still insufficient evidence to suggest the strain is more deadly or will affect vaccines and treatments.

Most European countries have imposed a 48-hour ban on all flights from the UK. Others like Finland, Iran and Italy have decided to extend the ban by two weeks until year-end, while the rest are opting to take more caution by suspending all UK flights until further notice.

In Asia, Singapore became the latest country to tighten restrictions on new arrivals from the UK and New South Wales. Earlier, India and Hong Kong have announced the suspension of all flights originating from the UK.

Other nations like Japan and South Korea said they were “closely monitoring” the new strain but have yet to cancel any flights from the UK.

British Prime Minister Boris Johnson on Sunday said the new strain could be up to 70% more infectious though it is not thought to be more deadly and that vaccines should still be effective. Health officials said the number of new infections in Britain have soared in the last two weeks.

Local media had earlier quoted Britain’s chief scientific advisor Patrick Vallance as saying that the new variant was becoming the dominant form in parts of England, including London, the southeast and east of England.