Sayantani Ghosh, Byron Kaye

SINGAPORE/SYDNEY – As Asia lockdowns loosen and vaccination increases, airlines and fashion brands are gaining favor with investors. They have boosted travel and leisure activities while also taking some heat from pandemic stalwarts like supermarkets or gadget makers.

According to the Earnings Report Cards, people spend less time shopping online or watching television as they eat out again or plan their vacations. It is also showing a rebound in luxury spending from China’s high-end spenders who are still unable travel internationally.

Asia-Pacific airlines offer more flights because some countries have resumed domestic travel. Some, like Singapore, allow quarantine-free travel to select visitors who are vaccinated. Bookings have risen due to Australia’s planned opening of its international and state borders.

Qantas Airways CEO Alan Joyce said that there is a huge demand from loved ones to spend Christmas together. There is a demand to go on that dream holiday people have been anticipating for two years.

It is clear that a rebound in Asia’s tourist sector will be months away, and China has a huge domestic travel market. Businesses like McDonald’s (NYSE 🙂 continue to struggle with the frequent, temporary restrictions that other countries place in order to contain outbreaks.

The Asia Pacific region saw a nearly 5% increase in airline stocks over the three-month period, while the global market for airlines dropped 6% as a result of slower corporate travel returns.

In the same time frame, approximately 2% of the MSCI All Country Asia Pacific Price Index rose.

European fashion houses, such as LVMH and Kering China’s (PA) achieved outstanding results despite the fact that China has been suffering from power shortages, and a crisis in its property sector.

Nicolas Hieronimus, CEO of L’Oreal, stated last week that China’s middle class and population are growing and they have a strong desire for beauty.

Hieronimus believes that a shift in Chinese government policies to reduce the income gap will help to increase the middle class. This sentiment is echoed at LVMH.

Japan’s Fast Retailing posted record profits last quarter in China, and will soon open its first flagship shop. Shiseido Co, a Japanese cosmetics company, believes that next summer will mark a turning point as Chinese tourists return to Japan.

EARLY WINNERS

Companies globally are struggling with severe labour shortages, supply bottlenecks and marine logjams as economies bounce back from pandemic lows, resulting in a steep rise in costs https://www.reuters.com/business/only-way-is-up-corporate-chiefs-warn-prices-2021-10-21/#:~:text=Inflation%20watch:%20Corporate%20chiefs%20see%20prices%20moving%20in%20only%20one%20direction,-By%20Siddharth%20Cavale&text=Oct%2021%20(Reuters)%20-%20For,prices%20are%20only%20going%20higher. The auto industry has been disrupted by a long-standing chip shortage.

The rising inflation will likely offset some of post-pandemic slowdown for supermarkets. They were among the first to benefit from the pandemic, when everyone scrambled in panic to store food and paper.

Woolworths Australia, an Australian supermarket chain, said Wednesday that food sales began to slow down in October. The shares of the company have dropped 10% from mid-August as vaccinations accelerated. The stock increased nearly 40% over the past 17 months when there were coronavirus restrictions.

“The biggest question right now is whether or not people will go back to work and how does that affect their at-home consumption.Johannes Faul from Morningstar Retail Analyst said that.

Jason Teh from Vertium Asset management in Sydney, stated that pandemic winners will not turn into losers overnight. However, work-from-home benefits that benefited Australian electronics retailer JB Hi-Fi are waning with increased vaccinations.

Counterpoint Research reports that China’s smartphone market declined 9% in the third quarter compared to a year prior.

Although there is potential for strong seasonally-related holiday quarters due to increased demand, chipmakers and suppliers like South Korea’s Samsung Electronics and LG Display (NYSE) are beginning to see sales slow.

“LCD panels for televisions are expected to see further drops in the fourth quarter as vaccinated people have begun to spend less time in front of screens,” said Park Sung-soon, Seoul-based analyst at Cape Investment & Securities.