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Coronavirus outbreak: Facemask-maker Kawamoto Corp sees sharp spike in stock price amid soaring demand

Demand for face masks and hand sanitisers have been on the rise in the affected region, with mask-making companies reportedly working round-the-clock to increase production to cope with the sudden rise in demand.

January 29, 2020 / 08:55 PM IST

The coronavirus outbreak in China has the markets spooked, with businesses across the world advising against travel to China and airlines suspending flights to and from the country.

According to economic research firm AdMacro which was quoted by CNBC, global markets have been complacent in their reactions to the sudden outbreak of the virus, which the research firm called a potential "Lehman-type" moment for the global economy.

However, even as the deadly virus infected global stock markets and stocks that have exposure to China in particular, there are some healthcare stocks and those of pharma companies that have soared due to the impact of the coronavirus. One such stock is that of a Japanese mask-maker Kawamoto Corporation, which saw an almost five-time jump within the current month.

This company, which manufactures masks and other medical products, saw its share price go up from JPY 447 on December 30, 2019 to JPY 2,591 on January 29, 2020. In percentage terms, the price of the stock zoomed by 479 percent in a month.

Image credit: Reuters terminal Image credit: Reuters terminal


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Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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Demand for face masks and hand sanitisers has been on the rise in the affected region, with mask-making companies reportedly working round-the-clock to increase production to cope with the sudden rise in demand.

Earlier last week, the municipal government of the Chinese city of Wuhan made wearing face masks mandatory in light of the recent spread of the coronavirus infection.

Retailers in the US are also quickly running out of masks amid panic buying from consumers after five confirmed cases came to light in the country.

Azearth, a company involved in the making of protective clothing, also saw its scrip value go beyond double from JPY 593 to JPY 1,451 during the same period.

With the death toll following the coronavirus outbreak in the Chinese city of Wuhan having gone beyond 130, the World Health Organisation has also stepped in and advised countries against the relocation of their nationals from China.
Moneycontrol News
first published: Jan 29, 2020 08:45 pm
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