Thanks to the meteoric gain in glove-maker stocks, Malaysia’s equity market capitalization is close to surpassing that of its richer neighbour Singapore.

Malaysia’s market value has surged 41% since a March low to hit US$379 billion ($524.87 billion) as the coronavirus pandemic supercharged demand for medical gloves and shares of the manufacturers. That puts Malaysia about US$4 billion away from surpassing Singapore’s market capitalization for the first time in more than 16 years, according to data compiled by Bloomberg that only include actively traded primary listings.

glove glory

“This is a reflection of the relative fortunes of the two economies and this divergence may continue for a while,” said Nirgunan Tiruchelvam, head of consumer equity research at Tellimer who has been tracking the region’s markets for decades. “Malaysia has integrated manufacturing industries like glove makers,” while Singapore’s economy is based on finance and property, he added.

The pandemic has sparked a reshuffle in Asia’s largest stocks with the likes of technology and health-care firms growing bigger than ever. While Singapore’s market lost $113 billion this year as it grapples with a slump in global trade, Malaysia’s capitalization bounced back due to huge gains in glove shares.

In fact, Top Glove Corp. on Thursday (July 23, 2020) unseated Public Bank Bhd. to become the second most valuable stock on Malaysia’s equity benchmark, after the former’s stock surged more than 450%. Another glove producer Supermax Corp. has leaped more than 1,100% this year.

The scorching rally in the sector has also fueled fevered trading in Malaysia’s equity market, with the number of shares changing hands reaching a record high this week.

Malaysia, whose gross domestic product was US$365 billion by end-2019, has been supported by the booming global demand for gloves and its bigger pool of domestic consumers. Meanwhile Singapore’s US$372 billion economy is heavily linked to trade and tourism, and it holds the grim distinction of having the one of the highest number of virus cases in Southeast Asia.