KUALA LUMPUR (June 14): Bursa Malaysia’s Health Care Index rose the most today in percentage terms at about 2% in morning trade, partly helped by rubber glove manufacturers’ share price jump as investors weighed lingering Covid-19 pandemic concerns and such sentiment’s impact on glove demand.

Besides glove manufacturers, a rise in share prices of pharmaceutical companies and hospital operators also contributed to the Health Care Index’s increase as investors evaluated the progress of Covid-19 vaccination schemes and the impact of such initiatives on pharmaceutical companies' and hospital operators' earnings.

At 10.23am today, the Health Care Index had risen 54.87 points or 1.81% to 3,080.88 as share prices of glove manufacturers, including Hartalega Holdings Bhd and Top Glove Corp Bhd, climbed among the top gainers on Bursa.

At 10.38am, Hartalega’s share price had risen 21 sen or 2.53% to RM8.51, while Top Glove leapt 20 sen or 4.24% to RM4.92.

Among other Health Care Index components, Pharmaniaga Bhd’s share price had climbed five sen or 0.97% to RM5.19 at 10.39am, while hospital operator IHH Healthcare Bhd was three sen or 0.55% higher at RM5.51.

Hartalega, Top Glove and IHH are also components of the 30-stock FBM KLCI.

At 10.55am, the KLCI had climbed 9.2 points or 0.58% to 1,584.36.

"Given the more negative readings of momentum and trend indicators of the KLCI in the past two weeks, further profit-taking correction can be expected this week. Pending confirmation of a ramp-up in the daily vaccination pace by the government in coming months, recovery plays should dissipate amid fading economic reopening optimism,” TA Securities Holdings Bhd analysts wrote in a note today as investors weighed the economic impact of Malaysia’s Covid-19-driven total lockdown to curb the spread of the pandemic.

On May 28, the Prime Minister’s Office (PMO) said in a statement that the National Security Council (NSC) had decided to implement Phase 1 of the total lockdown across the country from June 1 until today.

The PMO said that during the total lockdown, all industries are not allowed to operate except the "essential economic and service sectors” listed by the NSC.

However, last Friday, Senior Minister (Security Cluster) Datuk Seri Ismail Sabri Yaakob said in a statement that the total lockdown will be extended for another two weeks until June 28.

Ismail Sabri said the government had decided on the extension of the total lockdown after taking into account the nation’s daily number of new Covid-19 cases at above 5,000 recently.

Today, CGS-CIMB Securities Sdn Bhd analysts Ivy Ng Lee Fang and Michelle Chia wrote in a note that the extension of the total lockdown under the third movement control order (MCO 3.0) will raise the risk of corporate earnings disappointment from the gaming, retail, automotive, real estate investment trust (REIT), property, construction and tourism industries for the second quarter of 2021 (2Q21).

"The sectors least affected are export-oriented (tech, glove makers, petrochemicals and plantations) and utilities (including Tenaga Nasional Bhd [TNB], telecommunications companies and gas players), which are allowed to operate during the MCO,” Ng and Chia said.

Sumber : The Edge Markets