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KUALA LUMPUR (Sept 24): Rubber glove stocks soared again today, continuing their uptrend as global Covid-19 infections continue to rise to 7.43 million cases as of yesterday.
Hartalega Holdings Bhd was the main winner among its peers, rising 9.66% to close at RM 15.90, followed by Kossan Rubber Industries Bhd (up 9.24%), Supermax Corp Bhd (up 7.41% ) and Top Glove Corp Bhd (up 6.61%)).
The increase in glove stocks translated into a 3.98% increase in Bursa Malaysia’s Health Index, which closed at 3,685.92. For comparison, the KLCI rose 0.29% to close at 1,500.80.
Some analysts said that today’s rally followed a month-long correction in glove stocks after touching their respective peaks in early August.
JF Apex Research How Chi Hoong analyst noted that stock prices for rubber glove counters have dropped significantly from their peaks, which could have played a role in today’s surge, amid continued rise in cases. of Covid-19 around the world.
However, he told theedgemarkets.com that there were no obvious catalysts to justify the sudden surge in stocks today.
“In addition to the continuation [rising] cases and some concerns about an accelerated spread of Covid-19, there really wasn’t a strong catalyst for the spike today. This is likely to be a short-term increase, “How said.
Another analyst also noted that there have been many recent vaccine trial reports, which should be negative for rubber glove companies, although these reports apparently have no effect on their stock price.
On the other hand, Public Investment Bank Research said in a note today that glove stocks will continue to attract commercial interest “given the lack of fundamentally stronger alternatives.”
Despite the recent sell-off, glove makers are still in positive territory so far this year, led by Supermax, which has gained 1,110% since the start of the year at 70 sen / share.
Meanwhile, Top Glove increased 446% during the same period, followed by Kossan and Hartalega, which increased 212% and 190% respectively.
In terms of market capitalization, Top Glove leads with RM69.52 billion, making it the second largest component of the KLCI, and Bursa Malaysia as a whole, after Malayan Banking Bhd, valued at RM79.7 billion.
It should be noted that Top Glove moved the ex date for its final 8.5 sen dividend forward to October 19 from the previous November 17, with the payment date moved to November 3 from December 1. The group did not explain the reason behind the change and only issued an amendment to its previous dividend announcement dated September 17.
Meanwhile, the Employees Provident Fund (EPF) has been increasing its holdings in the rubber glove players, and the fund has re-emerged as a substantial Top Glove shareholder following the acquisition of 13.69 million shares, which raises its stake in the group to 5.051%.
EPF has also been accumulating Kossan shares, and the fund acquired 8.45mn net shares since early September, bringing its stake to 8.093% as of September 18.
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