- In its latest update on the H7N9 bird flu outbreak, the World Health Organisation (WHO) said that the new strain of bird flu is “more lethal” and “more easily transmissible” to humans than previous strains.

- Since its discovery in March, the virus has infected 108 people in China, killing 22 of them. This virus has racked up more human infections in a single month than the previous wellknown avian flu strain, H5N1, recorded in most years. The latter took a period of 4 years, from 2003 to 2006 for the number of cases to surpass 100. The mortality rate for H7N9 stands at 20% vs. H5N1’s 60% (over a 10-year period).

- For the first time since the outbreak started, no new cases were reported in China yesterday. Nonetheless, the relief was marred by Taiwan’s confirmation yesterday that it had diagnosed a case in a man there. This is the first infection recorded outside mainland China.

- Given that the patient had contracted it while working in Jiangsu/Shanghai, the WHO has assured that the risk assessment for the virus does not change and stressed that there has been no further spread of area of infection. It added that concerns over the possibility of him infecting others during his flight are unfounded since he was asymptotic at that time.

- A top WHO official, who is in China conducting investigations into the outbreak, was quoted as saying that it is still unsure if the reported human clusters were caused by common exposure to a source of virus or due to limited human-to-human transmission. However, WHO did highlight that there have been no evidence of sustained H2H H7N9. This would have made the virus deadlier and spark a pandemic.

- WHO had also made clear that vaccines would take much longer than the initially expected 6 weeks. The potential timeframe to do so is 4 to 6 months. However, there has been no firm decision yet on whether any vaccine would even be manufactured.

- We maintain our OVERWEIGHT recommendation on the rubber gloves sector as investigations are still on-going. Recent checks with management have also revealed that purchases are status quo, despite rising interests. This concurs with WHO’s conclusion that the situation remains under control.

- Our stock picks remain as Top Glove (BUY, FV: under review) and Kossan (BUY, FV: RM4.60/share) as they are most well-positioned to ride on any upsurge in demand. Following the recent run-up in their share prices, Top Glove and Kossan are trading at PEs of 18x and 10x their respective FY13F EPS. These are above their 5-year averages.

Source: AmeSecurities