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Wednesday, November 25, 2020 – 4:52 PM
NEWS from thousands of Top Glove Corp workers who tested positive for Covid-19 and expected delays in the delivery of their closed operations continued to weigh on the company’s share price.
Shares of the world’s largest rubber glove maker sank to a 2.5-month low on Wednesday, falling 2.9 percent or 6.5 Singaporean cents to 2,185 Singaporean dollars as of 9.32 a.m., a not high level. Seen since September 10.
As of 4.50 pm on Wednesday, the stock was down 2.7 percent or S $ 0.06 to trade at S $ 2.19, with nearly four million shares changing hands.
The Malaysian government has ordered a full investigation into Top Glove’s living and working conditions, The Star reported. The newspaper also stated that Human Resources Minister M Saravanan described the employees’ housing conditions as deplorable.
News of the investigation followed a coronavirus outbreak among more than 2,400 workers at the company’s factory, which also led the government to say it would temporarily shut down 28 of its manufacturing facilities in the Klang area in stages to screen and quarantine workers. The government did not specify when the closures would begin.
The conglomerate around Top Glove’s dormitory and factory areas in the city of Meru only contributed 1,511 of the 1,623 cases recorded in Selangor state on Tuesday, according to the Malaysian Ministry of Health. This is the largest active Covid-19 cluster in the country.
After Top Glove announced the temporary stoppages on Monday night, its share price fell 4.9 percent or S $ 0.14 to settle at S $ 2.25 on Tuesday.
The company also said Tuesday after the market closed that some of its deliveries could be delayed four weeks and that new orders could take longer to process due to the factory closure.
Meanwhile, sales could fall 3% below their projections for fiscal 2021, Top Glove added.
The company said in Tuesday’s filing that it is assigning sales orders to unaffected factories and rescheduling deliveries when possible to minimize the impact on customers.
Separately, Top Glove spent about RM42.6 million (S $ 13.9 million) on Tuesday to buy back 6.2 million of its shares. And last Friday, it also announced a share buyback of some 85.2 million shares for a total of RM629.1 million.
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