KUALA LUMPUR (Aug 19): Shares of Malaysian glove manufacturers surged on Monday after monkeypox (mpox) was declared an international health emergency for the second time on Aug 14.
Top Glove Corp Bhd (KL:TOPGLOV), the world’s largest glove maker by capacity, rose as much as 8.42% to an intraday high of RM1.03 before closing at 99 sen. The stock was also the top traded stock on Bursa Malaysia with trading volume of 132.56 million, double its 20-day average volume 46.4 million.
In a flash note, UOB Kay Hian said there may be increased trading sentiment on the Malaysian glove sector on the news, as demand for medical products may surge if mpox escalates into a worrying outbreak.
Glove stock valuations are now at “relatively attractive levels” and still have “palatable upside, solely on fundamentals”, without taking mpox into account, UOB Kay Hian said while maintaining its 'tactically overweight' sector rating.
The house has ‘buy’ calls on Top Glove, Hartalega Holdings Bhd (KL:HARTA) and Kossan Rubber Industries Bhd (KL:KOSSAN).
Mpox was declared a global public health emergency for the first time on July 23, 2022, and the status was rescinded on May 11, 2023.
Last week, the World Health Organization declared mpox as a public health emergency of international concern.
Besides Top Glove, the other three major glove stocks also saw their share prices up. Hartalega finished nine sen or 3.35% higher at RM2.78, Kossan was up five sen or 2.5% to RM2.05, and Supermax Corp Bhd (KL:SUPERMX) was up 2.5 sen or 2.87% to 89.5 sen.
Trading volume of Hartalega totaled 20.2 million shares while some 15 million Kossan shares changed hands. Supermax saw 1.22 million shares traded.
CIMB Securities meanwhile saw limited impact from mpox currently, but flagged that a more severe and prolonged outbreak of mpox especially in countries such as in the Europe and the US, could drive glove usage higher.
Any outbreak of diseases that can be transmitted via physical contact would be positive for glove makers, who will benefit from a short-term surge in demand for gloves, the house said and kept its ‘neutral’ call on the glove sector for now.
On its part, Malaysia's Ministry of Health said it will increase surveillance at international entry points. All medical practitioners in government and private health facilities now need to notify suspected and confirmed cases of mpox immediately.