JAKARTA, Indonesia

Shares of Malaysian flagged AirAsia Group and its affiliate AirAsia X surged in early trade on Tuesday as investors reacted to the positive developments of the coronavirus vaccine.

During the day, AirAsia jumped 14 cents to 67.5 cents and Air Asia X gained three cents to seven cents, The Star reported.

The stock then closed up 27.10% at 0.68 cents at the close of the day. One Malaysian ringgit is equivalent to $0.24.

AmInvestment Research said it has been advocating investors to lighten their positions in the “pandemic play” and replace them with the “recovery play”, according to the report.

“With the latest positive news coming in a rather abrupt manner, we expect volatility as investors in glove stocks rush to the exit at the same time,” it said.

The research house from one of the largest investment banking group upgraded its call for AirAsia from Sell to Trading Buy.

US drugmaker Pfizer and German biotech firm BioNTech announced earlier Monday that their COVID-19 vaccine candidate is more than 90% effective, which has provided optimism for investors that a remedy for the virus could become available in a few months that has so far infected 50.5 million people and claimed 1.2 million lives worldwide.

The news brought hope to airlines as the sector has been among those hardest hit by the coronavirus pandemic as a result of travel restrictions.

“This greatly enhanced the earnings certainty of AirAsia. Nonetheless, we do not rate AirAsia as an outright Buy as we are mindful of the urgent need for airlines, including AirAsia, to recapitalize their balance sheets on the massive losses they have suffered amidst a collapse in air travel since the pandemic,” the daily quoted AmInvestment Research as saying.

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