SUCH is the key question facing Malaysia’s Big-Four glove makers and their smaller industry rivals after almost all glove-related counters which shot up yesterday (Nov 29) slumped across the board (industry) today.
Recall that glove stocks rallied on concerns over the Omicron variant which originated in South Africa affecting global communities. Since then, the virus strain has been detected in several countries across Europe and Australia.
At the close of today’s mid-day trading, Top Glove Corp Bhd was down 37 sen or 11.6% to RM2.82 with 71.92 million shares traded, thus valuing the company at RM23.14 bil. The world’s largest glove maker saw its share price climbed to a four-week high (intraday) of RM3.43 yesterday (Nov 29).
Fellow Big-Four glove maker Hartalega Holdings Bhd dipped 39 sen or 6.09% to RM6.01 with 10.22 million shares traded which gave the company a market capitalisation of RM20.6 bil. Hartalega had surged to a four-week high (intraday) of RM7.01 yesterday.
Supermax Corp Bhd edged down 21 sen or 9.77% with 41.36 million shares traded, thus valuing the company at RM5.28 bil while Kossan Rubber Industries Bhd slipped 12 sen or 5.11% to RM2.23 with 14.07 million shares exchanged hands, thus giving the company a market capitalisation of RM5.7 bil.
In all fairness, the current state of glove stock pricing is probably a subject of profit taking following yesterday’s massive share price hike rather than having factored in the mid- or long-term health concerns as espoused by the World Health Organization (WHO).
In a statement, WHO has pointed out an increased risk in reinfection from the Omicron variant versus other already known variants.
In fact, health experts have recommended that governments resort to travel bans and movement restrictions as stop-gap measures to protect more people from contracting this new variant, thus overwhelming local medical facilities.
Above all else, the WHO statement reminded individuals to continue to take preventive measures such as wearing mask, maintaining hand hygiene, maintain physical distancing and getting themselves inoculated.
Therefore, it remains to be seen if the share price of glove makers will rebound after the profit taking activity has subsided.
In a related development, it is astonishing to observe that in the case of smaller/newer market players like AT Systematization Bhd whose order books have been filled up long before the Omicron variant was prevalent, their stock prices have not moved in tandem with the broader sector.
AT Systematization has been running on full steam with its 13 lines of glove dipping facilities in Chemor (Perak) and is set to switch on 10 more lines as its new facility commences operations in December.
AT Systematization closed near its 52-week low at 5 sen at the close of today’s mid-day trading, down 0.5 sen or 9.09% with 11.27 million shares traded, thus valuing the company at RM259 mil. – Nov 30, 2021
Photo credit: Nikkei Asia
