Coronavirus: Investors in mask makers see scrips surge

Coronavirus: Investors in mask makers see surge in scrips

Chinese face mask manufacturers have reported that they’re running factories through the Lunar New Year holiday break to keep up

Chinese authorities have been encouraging people to wear face masks covering their mouths and noses, which has led to a surge in demand. (AP Photo)

Even as global indices witness a heavy sell-off amid growing concerns of Coronavirus, there is one group of investors who have seen their holdings more than triple in the wake of the situation: the ones who own the scrips of face mask-makers have seen a surge globally.

The shares of Japanese medical equipment manufacturer Kawamoto Corporation have more than tripled in just seven trading sessions since the deadly virus started spreading in the world's most populous country -- China -- on hopes of increased demand for the masks and various other medical equipment.

On Tuesday, the shares of the company closed at JPY 2,091, up 23.65% from the previous close -- 3.5 times more than what they were trading seven trading sessions ago on January 17 (JPY 591).

Similarly, yet another American disposable protective apparel and infection control products manufacturer, Alfa Pro Tech Ltd, has seen its shares jump 2.2 times since January 17. The shares of the company closed at $7.7 apiece on Monday, up 28.33% from the previous close. On January 17, the shares of the company were trading at $3.51 apiece.

The Coronavirus has engulfed the world's most populous country, China, which accounts for more than one-sixth of the global population. Officially, the Chinese government has said that the spread of Coronavirus has been accelerating in the past week and has now touched 4,500 cases, with 106 death. However, a whistleblower nurse from Wuhan -- the epicenter of the virus -- has alleged that the government has been under-reporting the impact of the virus and that the cases of the virus have gone as high as 90,000.

Analysts believe that this will lead to a tremendous surge in the demand and sales of the masks, as people have been trying to save themselves from the deadly virus.

Chinese authorities have been encouraging people to wear face masks covering their mouths and noses, which has led to a surge in demand.

"As the spread of the virus is believed to be akin to that of viruses causing cold, people are increasingly using protective gear," said Kavita Chacko, Senior Economist, CARE Ratings.