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KUALA LUMPUR (Dec 29): FBM KLCI closed down 8.91 points or 0.54% at 1,634.99 today, in part due to falling stock prices for rubber glove manufacturers , although news of US President Donald Trump’s approval of the US $ 2.3 trillion (about RM9.32 trillion) stimulus package to counter the effects of the coronavirus pandemic supported market gains. world.
In Bursa Malaysia at 5pm, 9.17 billion securities were traded for RM4.22 billion, as KLCI-linked glove makers ended up among the major declines on the stock market.
Hartalega Holdings Bhd’s share price closed 52 sen or 4.17% at RM11.94, Supermax Corp Bhd fell 33 sen or 5.16% at RM6.06, while Top Glove Corp Bhd fell 25 sen or 3, 99% at RM6.01.
The most active and highest-earning shares were Sarawak Cable Bhd after the share price closed up 17.5 sen or 50.72% at 52 sen, with some 168 million shares traded.
Fortress Capital Asset Management CEO Thomas Yong said market sentiment has turned bearish in glove stocks since the announcement of the availability of the Covid-19 vaccine despite strong earnings performance achieved by companies. glove companies so far.
“Although glove company valuations have fallen significantly from a very high level earlier this year, news of the vaccine launch will continue to weigh on market sentiment around glove stocks.
“A sharp rally in the share price is unlikely, but there could be an opportunity when the valuation of glove shares gradually normalizes to its historical average,” Yong said.
According to Kenanga Investment Bank Bhd head of research Koh Huat Soon, it was noted that the sale of glove makers’ shares started in November 2020 when Covid-19 vaccines were approved globally.
“Many institutional funds have had overweight positions in these [shares]so perhaps I suspect that some of these funds may want to trim their overweight positions before the end of the year, ”Koh told theedgemarkets.com today.
He said the main question among investors now is the sustainability of glove makers’ earnings beyond the supernormal conditions driven by Covid-19 to justify their stock price levels.
“I think more clarity on this will emerge over time, possibly in the middle of next year,” he said.
Globally, Asian stocks were reported to have risen on Tuesday, and Japanese stocks hit a 30-year high as investor risk was encouraged by a Brexit trade deal and expected to extend the long-awaited aid package. for the US pandemic.
MSCI’s broader Asia-Pacific equity index outside of Japan was reported to rise 0.45% after Trump’s approval of the $ 2.3 trillion stimulus package to counter the effects of the coronavirus pandemic. .
“While the package has yet to be approved by the Senate, Trump’s approval on Sunday sent Wall Street stocks to all-time highs on Monday amid increased optimism about an economic recovery,” Reuters reported.
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