'Big 3' glove makers down after running ahead of fundamentals

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KUALA LUMPUR (Dec 21): Shares of Malaysian rubber glove makers fell this morning, signalling a correction after surging to record highs yesterday.

Several glove makers have run ahead of fundamentals, especially as the Malaysian ringgit is strengthening, said Frank Lin, a dealer's representative with Hong Leong Investment Bank Bhd.

"The big counters are already oversold, thus any minor correction is normal," he told theedgemarkets.com in an email response.

Hartalega Holdings Bhd, which had risen to a record high of RM11.40 yesterday, declined 34 sen or 2.98% to RM11.06. It remains the biggest glove maker by market value at RM18.27 billion.

Meanwhile, Kossan Rubber Industries Bhd dropped as much as 31 sen or 3.66% this morning to RM8.15 after hitting a one-year high of RM8.46 yesterday. It later pared losses to trade at RM8.36 as at 11.05am.

Top Glove Corp Bhd had fallen as much as 20 sen or 2.48% to RM7.86 on heavier trades, seeing 2.95 million shares crossed as at 11.05am. It had also reached a record high yesterday of RM8.05.

However, Lin highlighted that the correction in share prices did not happen across the board as smaller players such as Comfort Gloves Bhd had continued to climb.

Comfort Gloves appeared to be playing catch-up today, rising as much as 4 sen or 3.7% to RM1.12 as at 11.15am.

In a note today, RHB Research Institute Sdn Bhd raised its target price for the stock to RM1.46 from RM1.28, noting that the company's latest financial results had surprised on the upside.

Yesterday, Comfort Gloves posted a 44% increase in its net profit for its third quarter ended Oct 31, 2017 to RM11.9 million on the back of cost savings and capacity upgrades.