The market narrative changed this week after Pfizer and its partner BioNTech went public with a Covid-19 vaccine candidate was effective in 90 per cent of cases.
Approval for the drug will be sought next week, which doesn’t mean the pandemic is over, though the knee-jerk reaction of London’s traders seemed to suggest this was the case.
They waded in to buy Covid-hit stocks, while offloading shares in companies focused on finding coronavirus treatments, or developing diagnostic technologies.
Vacinne news: The AIM-All Share shed 1 per cent on Monday’s announcement, but quickly regained ground and jumped 5 per cent to 994 over the week
As a result, there were some unusual buying and selling patterns on the healthcare-rich AIM-All Share, which shed 1 per cent on Monday’s announcement, but quickly regained ground and jumped 5 per cent to 994 over the week.
The benchmark FTSE 100 recorded a steady 7 per cent advance to 6,331 with a 5 per cent spike on Monday.
‘A comprehensive vaccine programme will likely require multiple options to provide access for the wider population, with a phased roll out over months and so therapies as well as a range of effective and accurate tests are still likely to be needed for some time to come,’ said Emma Ulker, analyst at Proactive Investors.
So, the early sell-off of certain drug and med-tech stocks may have been premature, though it could arguably be a chance to grab cheap shares with growth potential.
In fact, drugmaker Synairgen, which tumbled 27 per cent to 130p this week, saw major shareholder Polar Capital upping its stake by 1 per cent on Tuesday.
Directors of diagnostics superstar Novacyt, down 15 per cent to 899p, went on a shopping spree, with boss Graham Mullis acquiring £500,000-worth of cut price shares.
All told, it was a tough week for the sector. Testing firm genedrive plunged 43 per cent to 60p, Omega Diagnostics lost 41 per cent to 45p and Avacta was off 38 per cent to 106p.
In a week of starkly contrasting fortunes the Pfizer/BioNTech news lifted stocks in the industries most battered by the pandemic, namely hospitality, travel and leisure.
Restaurateur Tasty doubled to 2p, Revolution Bars rocketed 74 per cent to 17p, publicans City Pub and Young’s surged 54 per cent to 87p and 32 per cent to 1,030p respectively, while café operator Loungers jumped 37 per cent to 183p.
In the travel sector, hostel operator Safestay zoomed up 67 per cent to 18p, airline Jet2 advanced 31 per cent to 1,205p and services provider Gama Aviation leapt 36 per cent to 45p.
Looking at the entertainment space, seating provider Arena Events soared 71 per cent to 8p, posh cinema chain Everyman added 40 per cent to 95p and escape room operator Escape Hunt was up 26 per cent to 13p.
In non-vaccine news, Victoria Oil & Gas shot up 132 per cent to 5p after its Cameroon subsidiary reached a $12.5million legal settlement in a long running asset dispute.
The agreement lifts a substantial cloud from what has otherwise been a small-cap success story, which saw VOG take the Logbaba field from exploration success into development by creating its own infrastructure and distribution into Cameroon’s economic capital Duala.
Sticking to the risers, Walker Greenbank advanced 12 per cent to 68p after the upmarket interior furnishings group signed a licensing agreement with Next for an extensive range of clothing, homeware and accessories.
Meanwhile, Powerhouse Energy rose 13 per cent to 2p on the back of an initial agreement with Hydrogen Utopia to provide its DMG technology for the production of hydrogen from waste plastics.
Looking at the fallers, recruitment consultancy Nakama lost 22 per cent to 0.5p after warning that the pandemic has hit cashflow too hard and will need extra capital to survive, however its largest shareholder doesn’t support a fundraise.
Electricity provider Inspirit Energy slid 19 per cent to 0.08p after shareholder Christopher Heminway cut his stake to 8.66 per cent from 9.04 per cent.
Services provider Enteq Upstream slipped 8 per cent to 13p after admitting it expects the US market, which accounts for over a third of revenues, to remain subdued in the medium term.