Tuesday 19 Mar 2024
By
main news image

KUALA LUMPUR (May 13): Bursa Malaysia’s healthcare index settled up 171.34 points or 10.69% at 1,773.99 at the bourse’s afternoon break today as concerns of a second wave of Covid-19 infections led to buying of shares in healthcare-related companies, including rubber glove manufacturers and hospital operators.

At 12:30pm, Bursa’s top three gainers were glove manufacturers Top Glove Corp Bhd, Hartalega Holdings Bhd and Supermax Corp Bhd. Other notable gainers included hospital operator IHH Healthcare Bhd.

Top Glove’s share price settled up RM1.31 or 16.4% at RM9.30, Hartalega rose RM1.09 or 14.48% to RM8.62 while Supermax climbed RM1.05 or 16.67% to RM7.35. IHH added 23 sen or 4.46% to RM5.39.

Top Glove, Hartalega and IHH are FBM KLCI stocks. The KLCI rose 18.54 points or 1.34% to 1,398.47.

On Top Glove, CGS-CIMB Securities Sdn Bhd analyst Walter Aw wrote in a note today that as the largest glove maker globally in terms of production capacity at 73.8 billion pieces a year, Top Glove is viewed by CGS-CIMB as the key beneficiary of the glove sector’s favourable supply and demand dynamics, which allow Top Glove to capitalise on pent-up demand for gloves due to Covid-19.

Aw said CGS-CIMB has raised its Top Glove earnings per share (EPS) forecast for financial years ending Aug 31, 2020 (FY20) to FY22.

"We raise our FY20-22F EPS by 42.2%-56.4% to account for: (1) increase in glove sales volumes, (2) rise in ASPs (average selling prices), and (3) better profit margins from higher economies of scale and lower raw material prices.

"Following our EPS hikes, our TP (target price) is raised to RM10.40, still based on 32x CY21 PER . Our ‘add’ call is retained,” he said.

Globally, it was reported that stocks and oil prices fell on Wednesday as fears about a second wave of coronavirus infections gripped financial markets.

Reuters reported that investors, many facing steep losses due to the pandemic-driven shakeout in assets over the past few months, have also had to contend with renewed US-China trade tensions.

It was reported that Asian shares tumbled on Tuesday on growing worries about a second wave of coronavirus infections after the Chinese city where the pandemic originated reported its first new cases since its lockdown was lifted. The central Chinese city of Wuhan reported five new cases on Monday, casting doubts over efforts to lower coronavirus-related restrictions across the country as businesses restart and individuals go back to work.

      Print
      Text Size
      Share