Seoul: A fresh wave of COVID-19 cases sweeping across Asia has triggered a sharp rally in shares of companies producing test kits and vaccines, particularly in major financial hubs such as South Korea, Japan, and Hong Kong.
On Monday, South Korean diagnostic kit maker Sugentech Inc. surged 29%, making it one of the region's top performers. Similarly, shares of Daiichi Sankyo, a prominent vaccine producer in Japan, rose 7.4% following UBS's bullish revision in its price target.
In Hong Kong, Shanghai Junshi Biosciences Co., which also manufactures COVID-19 vaccines, saw a 4.3% gain. This stock movement comes amid rising COVID-19 cases in densely populated cities like Hong Kong and Singapore. Local health authorities have warned of a significant spike, with Hong Kong's Centre for Health Protection noting that COVID-19 activity is expected to remain elevated for several weeks. Edwin Tsui, the center's controller, attributed the recurring outbreaks to cyclical patterns that emerge every six to nine months.
Meanwhile, according to the Chinese Center for Disease Control and Prevention, China's latest data suggests the country is on course to reach last summer's infection peak. The Korea Disease Control and Prevention Agency (KDCA) has extended its seasonal vaccination campaign until the end of June. The KDCA urges high-risk groups, including those over 65, immunocompromised individuals, and patients in medical facilities, to get vaccinated with the JN.1 shot developed by Pfizer Inc. and BioNTech SE.
The agency emphasized the increasing year-round prevalence of COVID-19 over the past three years and stressed the importance of timely vaccinations. South Korean pharmaceutical stocks broadly benefited from the surge, with Humasis Co., LabGenomics Co., Seegene Inc., SD Biosensor Inc., and SK Bioscience Co. all posting notable gains, the latter climbing as much as 7.2%. Market analysts like Gary Tan from Allspring Global Investments pointed to retail investor enthusiasm as a key driver behind the gains, particularly in Korea's small-cap pharmaceutical sector.
