- The Wall Street Journal, citing a frontline health worker, highlighted the shortage of basic medical supplies as a key obstacle in the fight against the ongoing Ebola outbreak in West Africa.

- According to the article, dozens of healthcare facilities had to be closed due to the lack of medical provisions as well as the absence of staff due to fear and strikes.

- Many frontline healthcare workers in Liberia, for example, are demanding personal protective equipment (PPE) including rubber gloves, safety goggles and protective suits. They also want life insurance and a fivefold pay rise before heading back to work. The Liberian government is understood to have agreed to the conditions.

- Latest figures from the WHO show that the total number of Ebola cases in the four countries – Guinea, Liberia, Nigeria and Sierra Leone – has now climbed to 2,127 with 1,145 fatalities. To put things into perspective, the cumulative number of Ebola cases recorded prior to 2014 was 2,388. The actual number of cases is also likely to be much higher than the official records.

- On 8 August 2014, the WHO had declared the Ebola outbreak a public health emergency of international concern. Global health experts also believe that it may take at least 6 months for a turnaround to be registered.

- While there is no licensed vaccine for Ebola currently, some success have been achieved by one of the names in the clinical trial pipeline - ZMapp. WHO had stated that a fully tested and licensed vaccine would only be available in 2015, at the earliest.

- We opine that a prolonging of the outbreak may lead to a step-up in demand for rubber gloves, especially the latex variants. Our view is underpinned by:- (1) the African continent’s relatively low glove usage; (2) an acceleration in healthcare and hygiene awareness among the population following the current spread of Ebola; and (3) financial assistance from both the affect countries’ governments and the World Bank.

- That said, the higher demand may only serve as a new base for the region’s glove consumption unless the outbreak manifests into a global pandemic. The manufacturers have yet to experience any significant uptick in demand.

- No change to our NEUTRAL stance on the rubber gloves sector at this juncture. Our top pick remains Kossan Rubber Industries (BUY, FV: RM5.00/share). However, should the situation take a turn for the worse, we believe that the prime beneficiaries would be Top Glove Corp (HOLD; FV: RM4.80/share) and Supermax Corp (HOLD; FV: RM2.65/share) given their low utilisation rates, appropriate product mix and existing exposure in Africa. 

Source: AmeSecurities