30 November 2021
Once again, the world is thrown into disarray over the new Omicron variant of the Covid-19 virus, which has ravaged the world over the past two years. With fear and confusion over this new variant, many countries such as Japan, is closing off its borders to foreigners while others imposing bans on travellers from South Africa and its neighbouring countries. The financial markets were also rattled last Friday (26th of Nov 2021), with the Dow Jones Industrial Average (DJIA) suffering its biggest one day drop since October 2020. Amidst the sell off, one sector moved strongly against the trend. And that is the rubber glove sector.
When Covid-19 virus hits the world last year, the demand for rubber gloves went through the roof. Coupled with tight supply, the average selling price for both rubber and nitrile gloves shot up by several folds. As a result, glove shares surged exponentially with some counters gaining over 1000% by the 3rd quarter of 2020. However, interest in the sector waned as vaccines started to roll out and companies stepped up on glove production to meet the rising demand. Share prices of most glove companies have been on the downtrend ever since.
With the current Omicron variant hitting the headlines, it rekindles significant interest for glove shares such as Top Glove, UG Healthcare and Riverstone (listed on the Singapore Exchange). Top Glove rose from $0.725 on the 25th of Nov 2021 to $1.08 on the 29th of Nov 2021. UG Healthcare rose from $0.255 on the 25th of Nov 2021 to $0.455 on the 29th of Nov 2021. And Riverstone rose from $0.685 on the 25th of Nov 2021 to $0.825 on the 29th of Nov 2021.
But only in time to come, shall we be able to see a clearer picture on the interest in glove sector; whether it will continue to remain high or take the downward trend again. And for those who bought into glove counters before the recent price spike? They would have probably made some quick gains just within matter of days.