Top Glove Corp., the world’s biggest glove maker, surged on Monday to lead an advance in medical wear companies for a second session amid bets the emergence of the omicron coronavirus variant will boost demand for the industry’s products.
Top Glove Corp. jumped 21% in Malaysia, adding to Friday’s gains of 17%. Its peer Hartalega Holdings Bhd. advanced 13%, the most since January. Similar stocks listed in Singapore and Thailand also soared.
The two-day gains in glove makers are reminiscent of the eye-popping rallies seen by medical wear companies last year before vaccine rollouts, the economic reopening and forced labor allegations weighed on their outlook.
The sector was one of the hottest pandemic trades in 2020 but many of the glove producers more than halved in their market value this year.
“Demand growth and pricing won’t go back to 2020 levels but there will be some improvement especially if virus cases rise,” said Danny Wong, chief executive officer of Areca Capital Sdn.
Still, Wong warned that only smaller individual investors might be chasing glove stocks and the institutional money is yet to come in with conviction. He remains neutral on the sector.
The FTSE Bursa Malaysia KLCI benchmark, which counts Top Glove and Hartalega as its members, outperformed the MSCI Asia Pacific Index on Monday for a second session in a row.
At one point last year, more than $1 of every $10 invested in the Malaysian stock market was a bet on gloves -- a feat that makes the Southeast Asian nation a play on global hygiene, much like South Korea and Taiwan are for semiconductors.