Why I buy Glove counter.
Glove manufacturers are skyrocketing their production during this pandemic period. There are some new players as well joining the mega companies. The small penny companies are making their presence and are doing better than the other new players.
Here are teh Malaysian rubber glove related companies in Malaysia
The Stock Market Sentiments
Noticed the market nowadays, it has been much more on sentiments in general rather than being rational in most cases. There’s a lot more trading activities today where even the large funds are taking part.
The emergence of retail players the “Robin Hood” investors is allowing much more purchases based on sentiments.
For example Berjaya Corp appoint a new group CEO and following that news the group related stocks were active and stock price increased. The construction company Mahsing mentioned in the media that the company is jumping on the band wagon to manufacture gloves and the stock price jumped the next following 2 days.
Another example is UCREST that is in MOU with Russia to distribute the Russian vaccine Sputnik. The stock price also did well the following days after the announcement. I did follow this news and make some profit.
These are people “robin hood” who lost their jobs and putting their money in the stock market for leveraging their income.
There are possibly tonnes of Facebook ads, Telegram groups and YouTube channels advising people where and how to invest. Switching on YouTube channels on investments, you will see many celebrity faces in partnership with investors advisor are involved.
With this I would deem that there’s opportunities to search for value. The rubber gloves companies do not need any more introduction as there are just too much “noise” out there. Many parts of the media I see that although vaccine is on the way and few countries (Israel, UK, maybe US) have shown good progress from the vaccination program, I believe it will take another two years or more before COVID will be fully addressed.
In the past I was just too optimistic. Even as at now, many countries are seeing fresh highs such as in India as people get more agitated due to the length of the pandemic and they just take less precautions.
Even most economies could not bear the brunt of inactivity’s and they just have to open up. One do not need to look far but at Malaysia. Many governments’ agencies are taking the stand that they just need to allow certain economies to work for its money (with conditions).
The first round of MCO, there was money being ditched out to people (Makcik Kiah), Second round there were more funds but lesser amount. Moratorium for loans were introduced and practiced during the first six months. Those have stopped. Now, it is much more targeted assistance and even then they are in small bits and pieces.
I believe those similar situations are being practiced in many other countries which are developing when the virus is still rampant. In India, I was expecting the collapse of the health situation many month ago but it seems that they were contained – possibly because of people were willing to adhere to SOPs – and human beings especially from the democratic block were only willing to adhere to so as much. Now we see a different story from the brunt of what COVID can do to a country like India (with 1.3 billion people), poor developing country and with lack of basic discipline.
Hence, COVID is here to stay for a while even with vaccines.
For gloves, there is no doubt there will be more companies starting to produce more. But the demand will still be outstripping supply until to a point when COVID is addressed. Even then, let’s think through – with a pandemic this scale, many countries would be looking at relooking at their capacity to address the next pandemic. I do not think gloves will be much oversupplied for a while because of this. The Covid19 virus variants are developing and spreading globally. Vaccines alone will not help to stop the spreading of the virus not until a cure for it have been developed.
We just need to stay vigilant and discipline ourselves when walking outside our house.
Some countries would be looking at gloves self-sufficiencies at some of point of time but there are just few countries which are manufacturing scale developed – which is why Malaysia is one of the beneficiaries from the gloves manufacturing capabilities.
Disclaimer: My investment strategy is not for others to follow. Do your own homework.