KUALA LUMPUR: Healthcare stocks on Bursa Malaysia gained today following reports of a potential Human Metapneumovirus (HMPV) outbreak in China.
Bursa's healthcare index, which is made up of glove, hospital and healthcare product stocks, edged up as much as 1.50 per cent at midday even as most other indices were down.
Adventa Bhd rose almost five per cent, while Careplus Group Bhd and Top Glove Corp Bhd were both gained more than three per cent at midday break.
The index subsequently ended the day with a 1.26 per cent gain, or 29.80 points, to 2,391.83.
Despite the market enthusiasm, analysts believe the development is unlikely to significantly benefit Malaysian glove manufacturers.
This is given the seasonal nature of the virus and China's sufficient domestic production capacity.
Tradeview Capital fund manager Neoh Jia Man believes the recent respiratory disease outbreak in China is a seasonal occurrence triggered by winter.
Neoh said the firm does not observe any consistent historical seasonal trend in the price movements of Malaysian glove counters.
"This could be due to investors being less sensitive to such outbreaks before the Covid-19 pandemic and the persistence of social distancing norms in China in recent years. In our view, the excitement surrounding glove counters due to the HMPV outbreak is likely to be short-lived," he told Business Times.
MIDF Research has a "Neutral" call on the local glove sector, citing China's Union health ministry's comments that the outbreak is an annual occurrence during winter and that it is safe to travel to China.
"Premised on this, we view that the seasonal influenza cases would not lead to a surge in glove demand inside and outside of China," it said in its note.
Given that the recent rise in HMPV is not an outbreak, MIDF Research said it should not lead to a surge in demand for gloves both in China and globally.
Nonetheless, the firm said should it lead to an increase in demand in China, although it does not not think that the Malaysian glove manufacturers would benefit from it.
China's glove players should have ample capacity to cater for the surge, if any, as its export of gloves to the US would be severely impacted from 2025 following the heightened tariff imposition by the latter, it said.
The US raised its tariff against China-made medical gloves from 7.5 per cent in 2024 to 50 per cent in 2025 and 100 per cent in 2026, making China's gloves uncompetitive compared to its global peers.
"That said, should HPMV or other virus lead to a pandemic, we believe that the supply demand dynamics would turn favourably towards our local glove players," the firm added.
HPMV was reportedly discovered in 2001 with symptoms like that of the common cold including cough, fever, stuffy or runny nose, sore throat, wheezing, shortness of breath and rashes.
In 2024, 327 HMPV cases were reported in Malaysia, a 45 per cent increase compared to 225 cases in 2023.
This increase comes amid reports of rising respiratory illnesses in other countries, including China.