By Chester Tay
KUALA LUMPUR, Malaysia--Shares of Malaysia's Top Glove Corp. soared in Monday trading as global concerns mount over the Covid-19 Omicron variant, though analysts said the boost could be short-lived.
Shares of the world's largest glove maker by capacity rose by as much as 30% to MYR3.43, hitting the Malaysian bourse's maximum limit and briefly putting Top Glove on pace for its biggest one-day gain since listing 20 years ago. The company's shares were last up 20%, trimming year-to-date losses to 48%.
Other regional glove companies rallied as well, with Hartalega Holdings Bhd. climbing 21%, Kossan Rubber Industries Bhd. up 11% and Supermax Corp. gaining 22% in late afternoon trading. Singapore-listed Riverstone Holdings Ltd. rose 15%.
Malacca Securities senior analyst Kenneth Leong said buying interest in glove stocks may not be as sustainable as it was during the first global outbreak last year.
"Pharmaceutical companies have indicated that they are capable of producing large amount of vaccines against this new variant, while governments have been quick to impose containment measures," he said.
TA Securities added that although news of the variant could increase speculative interest in healthcare stocks--especially in what it described as undervalued Kossan Rubber and Hartalega--it doesn't expect the global economic recovery to be derailed given vaccinations that could minimize the chances of hospitalization or death. TA has buy ratings on both Kossan and Hartalega.
Top Glove's stock soared multiple times over in 2020 but has fallen this year on concerns about waning demand for protective wear and middling average selling prices, as the pandemic appeared to be coming under control.
Write to Chester Tay at firstname.lastname@example.org
(END) Dow Jones Newswires