HARTALEGA Holdings Bhd and Kossan Rubber Industries Bhd could be dealt a similar fate as Top Glove Corp Bhd judging by the systematic and rampant pace of disposal by the Employees Provident Fund (EPF) of its shareholding in both Big-Four glove makers.
The move which is consistent with a potential portfolio switch as pandemic-driven demand for gloves normalises is believed to be instrumental in dragging down Hartalega’s share price to a 52-week low of RM3.15 (from a 52-week high post-bonus issue high of RM8.50) this morning (June 14).
Hartalega closed the mid-day trading session down 13 sen or 3.93% at RM3.18 with 7.89 million shares traded, thus valuing the company at RM10.9 bil.
Since April 4, EPF has been on a disposal spree of Hartalega shares which led to its shareholding reduced gradually from 279.11 million shares or 8.143% to 262.46 million shares or 7.657%.
Recall that EPF has ceased to be a substantial shareholder of Top Glove on May 23 following the disposal of ‘a big chunk’ of 9.78 million shares which brought the retirement fund’s stake in the company to below the 5% threshold to be a substantial shareholder.
Meanwhile, Kossan slipped 4 sen or 2.8% to a 52-week low of RM1.39 (vs a 52-week high of RM3.65) at the close of today’s mid-day trading with 5.23 million shares transacted, thus giving the glove maker a market capitalisation of RM3.55 bil.
Since its disposal exercise commenced on May 12 with the selling of of 3.03 million shares which brought its shareholding to 221.47 million shares (8.68% stake) the retirement fund has further dumped 3.48 million Kossan shares on June 8 which left its shareholding to 197.72 million shares or a 7.749% stake.
At the rate of consistency and quantum of disposal, it will not be surprising that share price of both Hartalega and Kossan can be further eroded in the near-term or at least until EPF stops its disposal exercise in its entirety which is very likely the case.
Interestingly, however, both the head honchos of Hartalega (executive chairman Kuan Kam Hon) and Kossan (founder and managing director/CEO Tan Sri Lim Kuang Sia) are less eager compared to their Top Glove counterpart Tan Sri Lim Wee Chai to lend support to the share prices of their companies by raising their own stakes.
In fact, the last time Hartalega was indulged in a share buyback exercise was on June 17 last year when the company paid RM2.91 mil to acquire 350,000 shares between RM8.29/share and RM8.33/share.
As for Kossan, the exercise was last traced to March 31 last year when the glove maker bought 500,000 of its own shares for RM1.59 mil. – June 14, 2022
