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KUALA LUMPUR (Dec 16): At a glance, Bursa Malaysia’s top winners list was littered with rubber glove manufacturers in the morning trade today after the recent drop in their share price. The stock price surge today could be seen against the dynamics of value trading as investors capitalized on the Covid-19 vaccine-driven weakness in glove-related stocks to buy these stocks in anticipation of demand. glove world still robust due to pandemic.
At 10:44 am today, Hartalega Holdings Bhd had risen 60 sen or 5.01% to RM12.58, Top Glove Corp Bhd added 33 sen or 5.15% to RM6.74, Supermax Corp Bhd rose 34 sen or 5.01% to RM7 .13 and Kossan Rubber Industries Bhd was 25 sen or 5.1% higher at RM5.15.
“[It is] value in trade at this juncture, ”CGS-CIMB Securities Sdn Bhd analyst Walter Aw wrote in a note.
Meanwhile, Hong Leong Investment Bank (HLIB) research analyst Farah Diyana Kamaludin wrote in a note today that gloved players’ share prices had seen weakness lately due in large part to news flows. on the development of the Covid-19 vaccine.
“[But] With the global Covid-19 count still marking new daily highs, we believe the risk-reward ratio looks favorable [for the rubber glove sector] at current levels, “said Farah Diyana.
The impact of the rising glove share price in Bursa today was evident in the broader market.
As of 10.45 a.m., the Bursa Health Index, which tracks the prices of stocks of companies including rubber glove makers and pharmaceutical companies, was up 1.65%, while the 30-share FBM KLCI was up one. 0.97%.
Top Glove and Hartalega are components of KLCI.
On the other hand, Aw said that due to the Covid-19 pandemic, there is a huge shortage of rubber gloves globally due to increased use in the medical field as well as non-medical industries.
“Although we expect massive launches of Covid-19 vaccines in 2021, we believe the glove shortage will persist; glove manufacturers [have] continued to highlight that its capacity is fully occupied until at least 1TCY22 (the first quarter of calendar year 2022).
“Due to the current supply shortage, we also understand that certain glove buyers are willing to block large volume orders priced above current average selling prices (ASP) to ensure a sufficient supply of gloves next year.” said.
Meanwhile, Farah Diyana said that HLIB remains “overweight” in Malaysia’s rubber gloves sector.
She said Top Glove is HLIB’s first pick in the industry.
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