THE stock market is such a bizarre place where fortune can transform from hay to gold or vice versa within a short time span.
Just four days ago (Nov 25), UOB Kay Hian Research reiterated its “underweight” outlook on the glove sector, arguing that the sector’s 3Q 2021 average selling price (ASP)-led dismal earnings were compounded by curtailed volume output during the national lockdown (during the June-August period).
“Our earnings projections already suggest 32% downside to consensus’ 2023 expectations. Should these pressure points be realised, there could be further downside to both our and consensus’ projections,” projected analyst Philip Wong in a sector update.
“We do not expect investor interest to be piqued until a bottom is found. Given the uncertainty and unfavourable reward-to-risk payoff, we suggest investors minimise their exposure to the sector.”
Obviously, the research house did not err in its outlook for nobody saw the Omicron COVID-19 variant going to pose such a major impact to the recovery theme or prospect of re-opening of the economy.
Top Glove Corp Bhd which was hovering near its 52-week low just a week ago surged to a four-week high of RM3.43 (limit up level) before consolidating at RM319, up 55 sen or 20.83% at the close of today’s trading with 210.74 million shares traded thus making it the day’s third most active stock.
Fellow Big-Four glove maker, Hartalega Corp Bhd, was the day’s biggest gainer, jumping 75 sen or 13.27% to RM6.40 with 36.39 million shares traded, thus valuing the company at RM21.94 bil.
Supermax Corp Bhd edged up 30 sen or 16.22% to RM2.15 with a hefty volume of 156.04 million shares, thus valuing the company at RM5.785 bil.
Kossan Rubber Industries Bhd surged 16 sen or 7.31% to RM2.35 with 65.95 million shares traded, hence giving the company a market capitalisation of RM6.01 bil. – Nov 29, 2021
