Shares in the healthcare sector have surged globally as the World Health Organization declared the mpox outbreak in Africa a global health emergency. This has prompted renewed investor interest in medical stocks, particularly those involved in vaccines and virus detection.
In Japan, Precision System Science Co saw its stock rise by as much as 36%, while Shanghai ZJ Bio-Tech Co, a virus detection kit manufacturer, experienced a more modest gain of over 5% in China. In the US, Bavarian Nordic A/S, which has an approved mpox vaccine, saw its shares close up 33% in New York on Wednesday.
The recent surge in Covid-19 cases across Asia has heightened investor focus on healthcare stocks. The mpox outbreak, caused by a mutated strain of the virus known for its painful rashes and lesions, has infected around 15,000 people across six African countries, with more than 500 deaths reported in the Democratic Republic of Congo this year alone. This strain was first detected in the DRC less than a year ago.
Manish Bhargava, a fund manager at Straits Investment Holdings in Singapore, noted that the emergence of the mpox virus in Africa could evoke memories of the Covid-19 pandemic. Investors are expected to stay cautious, awaiting more data before making further moves.
In addition to the global reaction, Chinese companies involved in virus detection have also seen their stocks rise. Daan Gene Co, based in Guangzhou, saw its shares approach the 10% daily trading limit, while Assure Tech Hangzhou Co, which makes rapid test devices, saw its stock increase by up to 5.3%.
Despite the strong market reaction, some analysts, such as Tony Ren of Macquarie Capital, believe the impact on the healthcare sector and broader economy may be limited. Ren suggests that the WHO’s latest declaration may not have a significant long-term effect on biopharma stocks or the wider market.
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