Victoria restrictions: Which ASX stocks will benefit as they ease?

The easing of Victoria’s restrictions is undoubtedly welcome news but many ASX stocks will need to wait a couple of weeks to benefit.

After spending all but three weeks in the last seven months in lockdown conditions, the Victorian government took the first major step into resuming “COVID normality”.

Some stocks may notice an impact from the easing of Victoria’s restrictions beginning this week. Since 11.59pm last night:

Real estate auctions are able to take place with up to 10 people
Hairdressers can reopen, and
Hospitality businesses can host up to 40 customers indoors and 70 outdoors

Today’s easing of restrictions were welcomed by Victorian Chamber of Commerce & Industry Paul Guerra, although he hoped the timetable would be sped up if low case numbers continued.

“We cannot keep the state locked up. The contact tracing system is in place, businesses have COVIDSafe plans, and if every Victorian commits to doing the right thing with masks, social distancing and testing, we can again enjoy a sense of COVID normality, like we have seen in other states,” he said.

Which stocks could benefit right now?

Stocks that may benefit include real estate agent McGrath (ASX:MEA) and mortgage brokers Mortgage Choice (ASX:MOC), Resimac (ASX:RMC), CML (ASX:CGR), and Australian Finance Group (ASX:AFG).

There are no pure-play hairdressers stocks. But one company for which restrictions easing might not be ideal is Shaver Shop (ASX:SSG).

This company sells grooming products and saw sales spike during lockdowns as hairdresser closures forced people to DIY.

As for hospitality, one stock affected by Victoria’s restrictions is large cap Crown Resorts (ASX:CWN) which closed its Melbourne complex entirely.

In the last 24 hours, Crown has not made it clear if current patron limits are sufficient to profitably reopen its Melbourne complex. It’s also just been notified that AUSTRAC will investigate potential breaches of anti-money laundering and counter-terrorism financing at its Melbourne complex. Crown has promised to fully co-operate with the investigation.

Retailers still have to wait

However, hospitality business and retailers will need to wait until 11.59pm on November 1 to reopen.

At the peak of Victoria’s restrictions virtually all retail and hospitality businesses closed their doors. Many took a financial hit even when they had other outlets open elsewhere in Australia.

Motorbike dealer Motorcycle Holdings (ASX:MTO) is one stock in this situation, although it still anticipates $20 million in FY 20 first half earnings.

Other retailers that shut their brick and mortar stores at Stage 4 include JB Hi-Fi (ASX:JBH), Myer (ASX:MYR) and Beacon Lighting (ASX:BLX).

ASX stocks in the manufacturing or wholesale trades were allowed to stay open under Victorian restrictions – even at Stage 4. Vitamin seller Blackmores (ASX:BKL), dairy stock Keytone Dairy (ASX:KTD) and Masonry product maker Adbri (ASX:ABC) are three such examples.