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KUALA LUMPUR (Dec 14): Glove makers continued to dominate the list of top losers as investors made a profit amid the launch of Covid-19 vaccines.
Hartalega Holdings Bhd topped the list, falling to RM1.16 or 8.45% to RM12.56. At 11:02 am, the counter had cut some losses at RM12.62, still below RM1.10 or 8.02%.
Supermax Corp Bhd, meanwhile, fell as low as 68 sen or 8.99% at RM6.88. At 11:03 am, the counter stood at RM6.94, still down 62 sen or 8.2%, making him the second biggest loser.
Kossan Rubber Industries Bhd, the fourth biggest loser this morning, lost as much as 54 sen or 10.02% at RM4.85. At 11.04am, the counter had trimmed some losses to RM4.96, still below 43 sen or 7.98%.
Top Glove Corp Bhd and Comfort Gloves Bhd were also among the top losers. At 11.04 a.m. M., Top Glove had lost 39 sen or 5.65% to RM6.51, while Comfort Gloves fell 23 sen or 6.52% to RM3.30.
Reuters reported that the development of coronavirus vaccines encouraged risk sentiment, with the first shipments accelerated in the US as part of a historic mission to inoculate more than 100 million people by the end of March.
Last Friday, JPMorgan analysts Jeffrey Ng and YY Cheah said they expect glove prices to weaken in the second half of next year (2H21) as supply shortages decrease.
The foreign research house reinstated its coverage of Top Glove, albeit with an “underweight” recommendation and a fair value (FV) of RM3.50.
He also began hedging Hartalega and Kossan, also with “underweight” ratings, with FVs of RM8.50 and RM3.80 respectively.
Local research houses, however, remained optimistic about the prospects for the glove sector.
Maybank Investment Bank (IB) research analyst Lee Yen Ling said in a report today that she expects all glove players to report stronger earnings for the fourth quarter of 2020 (4Q20) and 1Q21 on average sales price increases. (ASP), which would be more than enough to offset increases in raw material costs, as well as a weaker US dollar against the ringgit.
It maintained its “buy” calls for Hartalega, Kossan and Top Glove, with respective target prices (TP) of RM 20.60, RM 10.05 and RM 8.65.
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