Amid rising concerns of the new Covid-19 B.1.1.529 (omicron) variant, Goldman Sachs was in no rush to make major changes in portfolio while monitoring the situation closely over the next month and citing a note from the National Institute For Communicable Diseases Of South Africa (NICD) that the mutation is unlikely to be more malicious and that the existing vaccines will most likely continue to be effective in preventing hospitalizations and deaths. Meanwhile, the antigen test kits are expected to continue to identify the mutation.
Credit Suisse stated its base assumption on the omicron that it is more transmissible and that vaccinations will maintain some efficacy even if reduced while adding that uncertainty typically causes prices to trade temporarily cheaply.
Still, Credit Suisse maintained its views citing 1) treatments are getting better, 2) should take about 4 months for new vaccine rollout if current vaccines do not work and monetary policy should provide support during the period, 3) government policies are increasingly forcing vaccinations and 4) it will be hard to implement any other than short lockdowns.
J.P. Morgan stated that if the emergence of omicron elevated to a variant of interest or variant of concern, it could interrupt re-opening moves, but still believed countries may take conservative approaches as information emerges. J.P. Morgan maintained a favourable outlook on the Asia curve trend in Indonesia, Philippines and Thailand for the rest of the year.
