Equity prices jump on vaccine discovery, glove shares plunge


KUALA LUMPUR: The FBM KLCI jumped on strong buying interest on Tuesday as news of a safe and effective vaccine being rolled out lent hopes of a global economic recovery.

At 12.30m, the Malaysian index was up 31.02 points to 1,555.34. A surge in trading activity saw 7.77 billion shares exchanging hands for a value RM4.9bil.

Financial counters were bolstered by prospects that the worst was over for the global economy. Public Bank climbed RM1.68 to RM16.98, Hong Leong Bank jumped RM1.14 to RM15.84, Maybank racked up 42 sen to RM7.54, CIMB rose 23 sen to RM3.29 and RHB added 35 sen to RM4.73.

Energy major Tenaga climbed 58 sen to RM10.84.

As investors moved into recovery plays, there was also sharp selling in glove stocks, which offset some of the gains seen on the key index.

Top Glove lost 60 sen to RM7.88 and Hartalega dove RM2.14 to RM16.08 as investors worried that demand for latex gloves would fall as the pandemic gradually eases.

"A consolidation beckons owing to the positive signs of vaccine development by Pfizer and BioNTech which could be a boon for economic recovery, but a bane for glove maker stocks," said Malacca Securities Research.

Aviation counters were clear winners with Malaysia Airports spiking 87 sen to RM520 and AirAsia surging 13.5 sen to 67 sen as a vaccine could mean a resumption of flight operations.

Oil and gas-related counters meanwhile were supported by a rise in crude oil prices, given the improved prospects for energy.

Crude oil prices spiked 8% yesterday on the vaccine announcement, but retraced by over 1% lower today on reports of rising new cases of coronavirus in the US and Europe.

Observers say oil prices will recover when the demand and supply imbalances return to normal, although this process is expected to be gradual as economies continue to face fresh lockdowns.

Hibiscus Petroleum, seen to be a proxy for oil prices, jumped 3.5 sen to 51 sen while Bumi Armada gained one sen to 25 sen and Serba Dinamik climbed nine sen to RM1.61.

Top active counters were AT Systemization down 3.5 sen to 18 sen, AirAsia X up 2.5 sen to 6.5 sen and Kanger up 0.5 sen to 19.5 sen.
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Bursa Malaysia , FBM KLCI , equities , vaccine , recovery

   

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