As Covid-19 continues to spread across the globe with countries reporting new cases daily, interest in glove producers correspondingly rose. Bullish investors who are keen to gain leveraged exposure to glove counters such as Hartalega, Supermax and Top Glove may consider call warrants HARTA-C36, SUPERMX-C82 and TOPGLOV-C69.

Covid-19 Updates

Just yesterday evening (4 Mar), Director-General of Health Datuk Dr Noor Hisham Abdullah said that 14 new Covid-19 infections were confirmed in Malaysia, bringing the total number of cases in the country to 50 as at noon yesterday (The Edge Markets, 4 Mar).

According to the same article, these cases are part of the second wave of outbreak in the country that began on 27 February – totaling 28 new infections to date, out of which 16 involve persons who were in close contact with Patient No. 26, the chairman of UDA Holdings, Hisham Hamdan. Dr Noor Hisam said, “We have identified 215 close contacts, 16 tested positive [for] Covid-19, 19 were negative, while 180 more [are] still pending for results," as investigations into this cluster of cases continue.

Outside of Malaysia, the infection cases and death toll continue to rise. Italy reported that all schools and universities will be closed through 15 March as its death toll jumped to 107 yesterday, while the number of infected rose to 3,089 (CNN, 4 Mar). Italy is currently the worst-affected country outside of China, having overtaken Iran in terms of the number of deaths and infections as at early Wednesday (CNBC, 4 Mar). The outbreak has centered on Italy’s wealthy northern regions of Lombardy, Veneto and Emilia-Romagna, but has spread throughout the country; currently only one out of Italy’s 20 regions, Valle D’Aosta, has yet to record a case.

Across the world in the United States, California reported its first death, also the first outside of the Washington state, bringing the US death toll to at least 11, with authorities saying that this person was on the Grand Princess cruise between San Francisco and Mexico from 11 to 21 February (CNN, 4 Mar). The same article on CNN said that another death was reported in Washington state’s King County on Wednesday; 9 out of Washington’s 10 deaths happened in King County. There are currently at least 149 known coronavirus cases across 13 states in the United States, including 39 in Washington state and at least 33 in California. New York City also confirmed new cases yesterday, bringing the state’s total to at least 11 (CNBC, 4 Mar).

Gain Leveraged Exposure to Glove Counters

While most of the market are in the red, the shares of glove producers have generally outperformed the market as glove demand is expected to continue rising. Yesterday, Hartalega shares were up 3.5% to RM6.24, Supermax shares surged 5.6% to RM1.70, while Top Glove shares closed unchanged at RM5.70.

Source: Macquarie Research - 5 Mar 2020