(Bloomberg) -- Health care stocks in emerging markets -- many of them in Asia -- have managed to skirt much of the fallout from a coronavirus that has killed thousands and sent MSCI Inc.’s benchmark gauge skidding to a 16-month low.
The shares are down just 5.3% since Jan. 17, when fears the virus would clobber global growth overwhelmed optimism about a U.S.-China trade deal. That’s far better than the 16% slide in MSCI index, outstripping a 35% tumble for energy stocks, the worst-performing industry group, data compiled by Bloomberg show.
It helps that health care makes up only about 3.4% of the index, and that most of those stocks are in Asia, “where markets have been recovering quickly,” said Malcolm Dorson, whose $563 million fund at Mirae Asset Global Investments has outperformed 97% of peers in the past three years. Moreover, “It is a sector whose products and services should see more demand in a global health crisis,” he said.
Wuhan Guide Infrared Co., a company based in the virus’s ground zero that makes products used in medical inspection equipment, has outperformed every other equity in the index to return 59.3% since Jan. 17. Jiangsu Yuyue Medical Equipment & Supply Co, another Chinese medical equipment company, jumped 51.2% in the same period.
Other top performers include medical software maker Winning Health Technology Group Co., which advanced 50.3% in the past eight weeks. Alibaba Health Information Technology Ltd., one of China’s leading internet health companies, is up 46.5%.
“I personally think the trend extends as long as there is unmet medical needs, such as cancers, HIV and Alzheimer’s disease,” said Mia He, a senior analyst at Bloomberg Intelligence in Hong Kong. “People will always see the demand for new drugs, technology, etc.”
All told, slightly less than a fifth of the MSCI index’s 1,401 companies are still in the green since mid-January. The gauge climbed by the most in more than a month on Tuesday, paring some of Monday’s rout.
©2020 Bloomberg L.P.
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