The Pfizer announcement on 5 November that its its anti-Covid "Paxlovid" pill cuts hospitalisation risk by 89% if taken within 3 days of the symptoms should provide another boost to the prospects for tourism recovery in emerging markets. This follows increasing full vaccination rates and the stuttering re-opening of international travel.
In a year when the battle between commodity exporter and technology-heavy equity markets has dominated emerging market equity portfolio strategy choices, tourism exposure has been somewhat left behind.
There are a number of emerging market economies with over 5% direct exposure to tourism (and indirect contribution – eg spillover to retail and real estate – is perhaps 2-3x the direct contribution).
Thailand offers the most liquid (over US$2bn average daily value traded), relatively cheap exposure (in terms of PB versus history). Philippines (US$115mn ADV) looks particularly cheap.
In very small Frontiers, Georgia, Jamaica, Jordan and Mauritius are also relatively cheap (we exclude Sri Lanka because of its high FX rate risk).
Countries suffering from high imported food prices, such as Egypt and Tunisia, may see an offset from tourism recovery over time.
Meanwhile, Croatia, Dubai and Morocco look relatively expensive.
Related reading and data
The data in this report is included in the full version of the Tellimer Emerging Markets Investability Matrix.
Tourism is cheap and its time may have arrived in emerging market equities, September 2021
Covid in EM: Where's already infected, vaccinated and re-opening, September 2021
Tourism's recovery potential is shown by Iceland, June 2021
Individual tourism-exposed markets
5 stocks that will surge as Thailand reopens (Tiruchelvam), November 2021
Philippines: Pacquiao enters the ring but vaccines and tourism is the real story, September 2021
Dubai can lure Hong Kong expats, May 2021
Thailand youth-led protests add to old schism and sclerosis, October 2020
Vietnam: The best emerging market is still spoilt by foreign ownership limits, June 2021
Egypt: Youth unemployment, August 2021
Sri Lanka's food and currency "emergency", September 2021
Georgia's politicians sign a fragile truce, April 2021
Tunisia democracy fails again, July 2021
Morocco votes but impotence of moderate Islamists may embolden radicals, September 2021
Jamaica: Repaired and re-rated but now slow growth, October 2019
Iceland: Fully valued, slowing growth, FM anomaly, July 2019
A new civil war in Lebanon: time to consider the consequences, April 2021
Jordan's crises, April 2021
Mauritius: India Tax Treaty Changing, May 2016