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Canada’s main stock index is expected to extend its record-setting rally this year as a global economic recovery boosts the outlook for the index’s heavily weighted financial and resource stocks, a Reuters poll found.

The median forecast in a survey of 24 portfolio managers and strategists was for the S&P/TSX Composite index to rise to 19,650 by the end of 2021, up 7.2% from Tuesday’s close of 18,330.09. November’s forecast was 18,400.

It was then expected to rise further to 20,125 by the middle of 2022.

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“The TSX Composite with its heavy makeup of financials, energy and material stocks should be a perfect proxy and beneficiary of a global economic reopening,” said Matt Skipp, president of SW8 Asset Management.

See also: World stocks’ dance to continue, but inflation could mute the music: poll

Investors expected the rollout of COVID-19 vaccines, historically low interest rates and fiscal stimulus to support an economic recovery. In January, the International Monetary Fund projected the global economy would grow 5.5% in 2021 after an estimated 3.5% contraction in 2020.

Financial and resource stocks account for more than 50% of the Toronto market’s valuation. The energy sector has surged about 75% since the end of October, helped by a rally in crude oil prices.

“Toronto is usually a latecomer in a bull market,” said Ron Meisels, president of Phases & Cycles, an investment research firm. “The energy stocks are just now starting to participate.”

With energy prices moving up, so have expectations for inflation, contributing to a jump in global long-term bond yields since the start of the year.

Higher long-term rates could help the profit margins of banks, all the more so because short-term rates, which are more sensitive to central bank policy, are currently stuck near zero. Banks often fund their lending with short-term borrowing or deposits.

Another potential upside for banks would be the lifting by Canada’s main financial regulator of a suspension on share buybacks and dividend increases, said Irwin Michael, a portfolio manager at ABC Funds.

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The Office of the Superintendent of Financial Institutions imposed the suspension last March to help gird against the economic impact of the pandemic.

“I see pent-up dividend increases over the next six to 12 months,” Michael said.

Consumer spending is also waiting to be unleashed, strategists said, after an historic level of economic support from Canada’s government helped swell Canadian savings to record levels.

That could support corporate earnings, which most of the poll’s respondents forecast would return to pre-COVID-19 levels within a year or earlier.

“Once we get past COVID ... I expect a massive acceleration of economic growth as the pent-up demand and excess savings are released,” said Philip Petursson, chief investment strategist at Manulife Investment Management.

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