Speculative buying on news of a new strain of bird flu virus in China has reinforced the upside potential of shares of Malaysia’s top medical glove-makers such Supermax and Top Glove, which have already rose four to six percent over the past two weeks on strong expansion plans.

Heavy buying and selling were seen on the companies’ shares.

Top Glove saw over 2.4 million of its shares exchanged on Tuesday by midday, nearly twice its four week’s average volume. It was trading at RM5.91, down 6 sen.

Meanwhile, Supermax saw volumes of over 8.5 million changing hands, about four times more than usual. Supermax was trading at RM2.09 at midday on Bursa Malaysia, also down by 6 sen.

“Four new cases of H7N9 bird flu have been confirmed in China in 24 hours by Monday evening, bringing the total number of infections to 24, while seven patients have died so far,” Chinese health authorities said in the latest news reports.

'Purely speculative'

Analysts have said that it was too early to quantify the economic impact on glove-makers.

“We think the sharp run-up in share prices of rubber glove stocks on news of an outbreak of the H7N9 flu strain last week is purely speculative, as the virus has yet to have any material impact on demand,” Maybank IB Research noted.

AMInvestment Bank Research, however, said that based on past experience, a flu pandemic would boost glove demand.

The last three pandemics (SARS in 2003, H5N1 avian flu in 2007, and H1N1 swine flu in 2009) saw the worldwide glove demand rise by between 11-24 percent in the year they occurred, it added.

The demand then had outstripped supply in 2009.

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