A relatively low-tech stock trade is making Tesla Inc.’s dizzying rally look like an underperformance. In Southeast Asia, makers of rubber gloves are attracting more investor fervour than even the electric cars and flame throwers of Elon Musk. Top Glove Corp. is up 389 per cent this year in Kuala Lumpur, the most on the MSCI Asia-Pacific Index, while Supermax Corp. has leapt more than 1,000 per cent, compared with Tesla’s 259 per cent. That is due to the boom in glove demand thanks to the coronavirus pandemic, aided by a short-selling ban in Malaysia till year-end. The meteoric rise has been unprecedented by Malaysian standards, with the top three glove makers adding about 109 billion ringgit (US$26 billion) in combined market value this year. More than US$1 of every US$10 invested in the nation’s stock market right now is a bet on gloves – a feat that makes the Southeast Asian nation a play on global hygiene, much like South Korea and Taiwan are for semiconductors. Top Glove resumed its rally Friday even after the US moved to block imports from two of its units. Which Hong Kong stocks have skyrocketed during the coronavirus pandemic? Hint: one makes toilet paper “The rally in glove makers reminds many of Tesla but the sector’s earnings outlook is more certain than that of Tesla,” said Ross Cameron, a fund manager at Northcape Capital, which overseas about US$7 billion in assets globally. The short-selling ban has had a minor contribution to the rally while “we expect the sector to report significantly more than 100 per cent earnings growth next year,” he said. Fund managers at Northcape and Samsung Asset Management have increased their bets on the sector this year saying the shift in glove demand is structural and many market participants are still behind the curve. Hong Kong third wave: more than 100 confirmed Covid-19 cases recorded, sources say, as city faces grim record-high Still, a faster-than-expected development of a vaccine to treat Covid-19 risks putting the brakes on the spectacular rally in glove makers’ shares. The US Customs and Border Patrol has placed a detention order on disposable gloves made by Top Glove. Top Glove said in a statement on Thursday that the issue may be linked to foreign labour and it is reaching out to US Customs to seek to resolve the matter within two weeks. Fund managers and analysts said the company could still ship their gloves to the US using other units. Also any cancellation of orders would be offset by demand from other countries due to the acute shortage. For now, the order books have swollen, glove prices have skyrocketed and companies are aggressively expanding their capacity to meet orders.