The ViewAre British stocks a good bet? It will take more than Covid-19 vaccine success to make them the ‘trade of the decade’

Name: Coronavirus: UK supermarket chain providing Covid-19 vaccination centre under NHS programme
Uploaded: 2021-02-25T14:30:14.000Z
Duration: 2 min 3 s
Description: Coronavirus: UK supermarket chain providing Covid-19 vaccination centre under NHS programme

Positive news on the vaccine front has raised hopes that bearish investor sentiment on UK equities, which are now very cheap, may soon turn

With the economy languishing, Covid-19 uncertainties persisting and Brexit taking its toll, a lot could happen that would upset expectations of a bull market

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British Prime Minister Boris Johnson holds a vial of the AstraZeneca vaccine during a visit to a Covid-19 vaccination centre in Orpington, southeast London, on February 15. The country that just a few months ago was severely criticised for its botched handling of the pandemic is now being lauded for its success in administering vaccines. Photo: Pool Photo via AP

Nicholas Spiro

Published: 10:30pm, 25 Feb 2021Updated: 5:52pm, 26 Feb 2021

In a previous column on the acute political and economic challenges facing the UK, I argued that the double whammy of the government’s mismanagement of the pandemic and a much harder Brexit than originally envisaged had cost the economy dearly, exposing severe weaknesses in Britain’s institutions and governance.

I also argued that the verdict delivered by financial markets, in particular stock markets, on the country’s decision to vote to leave the European Union had been a damning one, with the underperformance of British stocks versus their global peers increasing sharply since the June 2016 referendum.

What I did not anticipate is the dramatic shift in perceptions of Britain brought about by the country’s success in delivering and administering vaccines. Since the beginning of this year, the UK has emerged as a global leader in immunisations and the development of a clear exit strategy from Covid-19 restrictions.

The country that just a few months ago was severely criticised for its botched handling of the pandemic – Britain’s total deaths attributed to the virus are, by some distance, Europe’s highest – is now lauded for having delivered a first dose of the vaccine to 27 per cent of the population. Only a handful of countries, including Israel, have made swifter progress.

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Coronavirus: UK supermarket chain providing Covid-19 vaccination centre under NHS programme

The UK’s rapid roll-out of vaccinations has revealed some of the nation’s strengths during the crisis – vaccine procurement and production being one of the most important ones – and comes as the EU’s mass immunisation programme has been beset by delays and missteps.