THERE is nothing wrong in Employees Provident Fund’s (EPF) decision to invest in Top Glove Corp Berhad as the former needs to diversify its portfolio.
Speaking to FocusM, Crewstone International chairman Datuk Jalilah Baba said EPF would have scrutinised the matter thoroughly before making the decision.
“Not only EPF but many others are also buying up Top Glove’s shares. I don’t have the actual figures but I see nothing unusual about it,” she said.
Two days ago, an online news portal reported that one of Top Glove’s directors, Lim Cheong Guan sold 200,000 of his shares at RM8.79 on Oct 26, and 30,000 shares at RM8.98 the following day.
While Lim was selling off his shares, EPF did the opposite. The retirement fund bought an additional 51.35 million shares, raising its stake in Top Glove to 5.67% as at Oct 27, compared with 5.05% as at Sept 21.
Top Glove and other glove manufacturers have been raking in the moolah due to the COVID-19 pandemic, as demand for glove surged across the globe.
So far, Top Glove has had its value surge more than five times, with RM1.57 per share at the start of the year and reaching a peak at RM9.60 on Oct 19.
However, the glove manufacture was dealt with a setback when the US Customs and Border Protection (CBP) issued a suspension on the former in July, on allegations that the company was using forced labour.
Later, CBP acknowledged that Top Glove was taking the allegations seriously and was taking the necessary steps to remedy the situation.
On CBP’s suspension, Jalilah believed it would not have much impact on Top Glove’s profitability as many were still keen to invest in it.
“Besides, we all know that the United States has this habit of imposing its views on others,” she said.
On how Top Glove would sustain itself post COVID-19, Jalilah, who spent decades formulating government policies on trade, said demand for gloves would be positive in the future.
“Demand may reduce a little but it’s still a good investment. Many are becoming more health conscious so the business will continue,” she noted.
Jalilah added that many will start investing in the healthcare industry in the future, by buying up shares or set up more factories to meet the sector’s demand.
“I think it’s good for EPF to look into the healthcare sector but just be a little cautious,” she advised.
Top Glove recorded its best-ever quarterly net profit of RM1.29 bil for the fourth quarter ended Aug 31, 2020, which was almost 18 times the RM74.17 mil it posted a year ago.
Many have speculated that Top Glove may takeover Malayan Banking Berhad’s place as the biggest company on Bursa Malaysia, in terms of market capitalisation soon. – Nov 1, 2020
