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PETALING JAYA: When the first person in the UK received their Covid-19 vaccine, the increase in the share price of the seven glove players listed in Malaysia came as a surprise.
However, analysts believe that the sudden movement in the stock price after two months of continuous decline could simply be a “bounce”, rather than a short-term bullish reversal.
With the increasing flow of positive news about Covid-19 vaccines, the position of glove stocks as the favorites of the Malaysian stock market may be further affected.
The UK had started distributing the Pfizer-BioNTech vaccine for mass inoculation.
Within the region, Indonesia has received the first batch of Sinovac Biotech vaccines from China as the government prepares a mass vaccination program.
Going forward, analysts expect investors to focus more on recovery stocks while reducing their exposure to glove stocks.
This is despite the fact that domestic Covid-19 infections remain high, with daily cases mostly in the four digits in recent weeks.
Yesterday, Careplus Group Bhd
and Rubberex Corp (M) Bhd they were the ones that gained the most in percentage terms among the players with rubber gloves, 18.93% and 12.2%, respectively.
Rubberex Glove Factory
Top Glove Corp Bhd linked to FBM KLCI it also rose 7.42%, ignoring its recent losses after its operations were affected by the closure of its Meru plants due to quarantine restrictions imposed on its workers.
Another component of FBM KLCI, Hartalega Holdings Bhd, saw its share price rise by 1.52%.
Meanwhile, Supermax Corp Bhd, to be included in the KLCI FBM, increased by more than 7%.
Speaking to StarBiz, Inter-Pacific Securities head of research Victor Wan said stronger glove share prices yesterday could be a slight rally, considering that share prices have largely been in a downtrend or have stalled in recent weeks.
“It could also be due to the positive market outlook ahead of Top Glove’s earnings announcement for the first quarter of financial year 2021,” he said.
A quick review on the Top Glove website shows that the first quarter results will be announced today.
“Over the next few weeks, the glove stock share price movement would be more choppy as we see more vaccine-related developments,” according to Wan.
Another analyst told StarBiz that he did not see yesterday’s stock price movement as a “comeback” signal for glove stocks.
“Perhaps investors are raking in glove stocks as they have fallen from their highs and valuations are more palatable. That said, vaccine developments will create more volatility for glove stocks despite their anticipated good results for next year, ”he said.
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