Interest back in banking stocks

Uptrend: Banks along the Jamek Mosque in KL. Since end-October, banking stocks have rallied by more than 20%. — Bloomberg

PETALING JAYA: The reopening of the domestic economy and the potential mass vaccine rollout by various countries have seen investors shifting to more cyclical sectors like banks – the proxy to economic growth.

Since end-October, banking stocks have rallied by more than 20% versus the FBM KLCI’s 11% rise, largely on optimism that positive news on Covid-19 vaccine tests by pharmaceutical companies will blunt the pandemic, and in turn see demand for loans pick up on improved macroeconomic prospects next year.