(Bloomberg) -- The emergence of a new coronavirus variant in South Africa is giving a new lease of life to shares of Southeast Asian glove makers, which had slumped this year after becoming one of the hottest pandemic trades in 2020.
Producers of medical gloves surged Friday on the possibility the new virus strain causes a jump in demand for protective gear, just like Covid-19 did last year.
Sector bellwether Top Glove Corp. jumped as much as 15% in Malaysia, the most since September 2020. Smaller peer Supermax Corp. climbed as much as 16%, while Hartalega Holdings Bhd. rose more than 11%. Similar stocks listed in Singapore and Thailand also jumped.
The magnitude of the bounce was biggest in months for some of the cohort, which had given up most of their pandemic gains this year amid vaccine rollouts, the economic reopening and forced labor allegations. An equal-weighted basket of the Malaysian manufacturers more than halved this year, with the three becoming the worst performers in the MSCI Asean Index.
The rally was powerful enough to make the FTSE Bursa Malaysia KLCI benchmark outperform the MSCI Asia Pacific Index. It saw a modest 0.5% decline compared to a 1.9% slump in the regional benchmark.
At one point last year, more than $1 of every $10 invested in the Malaysian stock market was a bet on gloves -- a feat that makes the Southeast Asian nation a play on global hygiene, much like South Korea and Taiwan are for semiconductors.
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