Sector Focus Several glove stocks rise on news of US flu outbreak

by **Cals** Mon 06 Jan 2014, 16:03

Sector Focus Several glove stocks rise on news of US flu outbreak

Business & Markets 2013

Written by Ahmad Naqib Idris Adzman Shah of theedgemalaysia.com

Monday, 06 January 2014 15:55

KUALA LUMPUR (Jan 6): Shares of companies in the rubber glove sector such as Supermax Corporation Bhd, Kossan Rubber Industries Bhd, and Hartalega Holdings Bhd rose today on speculation that the current flu outbreak in the US will spur demand for gloves, analysts said.

At 3.00pm today, Supermax was trading at RM2.89, up 10 sen or 3.6% from RM2.79 with some 4.7 million shares done. It had earlier risen as much as 13 sen or 4.7% to RM2.92.

Kossan Rubber rose 3 sen or 0.7% to RM4.13 and had earlier risen as much as 8 sen to RM4.18, while Hartalega’s share price increased by 0.8% to RM7.29.

Wei Siang, analyst from JF Apex Securities, told theedgemalaysia.com that the rise in share price of Supermax may be related to widespread flu in the US.

“The rise in Supermax’s share price may have some relation to the flu outbreak, as the group is in a better position to capitalise on the situation compared to its peers Kossan and Hartalega,” said Wei.

But Top Glove Corporation Bhd fell 2 sen to RM5.71, which Wei attributed to its disappointing annual results.

He added that Top Glove is currently going through a transition from latex to a more balanced product mix.

Currently, JF Apex has a “hold” rating on Supermax, Hartalega and Top Glove, with target prices (TP) of RM2.67, RM7.55 and RM6.14 respectively, and maintains a “marketweight” call on the rubber glove sector.

Ian Wan, an analyst from Alliance, told theedgemalaysia.com that the flu outbreak may have some effect on share prices across the rubber glove sector, but will not be very significant as it is not a major outbreak.

“The flu outbreak in the US may have some effect for shares across the board, but we may not see 10% or 20% increases in share prices as this is only a typical seasonal flu outbreak,” said Ian.

Last week, a report by CNN said that there was widespread seasonal flu in 25 states in the US.

Dr. Michael Jhung, a medical officer of the Centers for Disease Control and Prevention (CDC), said that it’s a typical influenza season that begins in the winter months and peaks in January or February, with the most common strain of influenza this year being H1N1, or formerly known as the swine flu in 2009.

Two paediatric flu deaths were reported last week, according to a report by CDC where one was attributed to the H1N1 virus, while the other was associated to an influenza A strain.