KUALA LUMPUR (Aug 10): Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd led Bursa Malaysia's top decliners in morning trade today on profit-taking after these companies’ share prices rose substantially in recent days as a resurgence in global Covid-19 infections led to expectation of higher demand for rubber gloves.
At 11:16am today, top decliner Kossan fell RM1.34 or 7.06% to RM17.64, Top Glove was RM1.14 or 4.05% lower at RM27, Supermax fell RM1.12 or 4.89% to RM21.80 while Hartalega dropped RM1.10 or 5.75% to RM18.04.
At the time of writing, these counters pared losses after plunging to their lowest prices so far today. Kossan’s share price fell to its lowest so far today at RM17.10, Top Glove dropped to RM26.08, Supermax declined to RM20.30 while Hartalega fell to RM17.50.
Top Glove and Hartalega are KLCI constituents, hence, their share price drop had partly dragged the broader market lower. At 11:45am, the KLCI fell 8.11 points or 0.51% to 1,570.03 after plunging to its lowest so far today at 1,558.07.
CGS-CIMB Securities Sdn Bhd analysts Ivy Ng Lee Fang and Nagulan Ravi wrote in their latest Malaysia strategy note that the research firm estimates Top Glove and Hartalega’s combined weightage in the 30-stock KLCI had risen to 14.6% as at July 31, 2020 from 3.2% as at December 2019
They said Supermax and Kossan could qualify for inclusion in the KLCI if they maintain their current market capitalisation positions as the 16th and 21st largest among Bursa-listed companies by end-November 2020.
"The KLCI comprises the Main Market’s largest 30 companies by full market capitalisation which meet eligibility requirements stated in the FTSE Bursa Malaysia Ground Rules. The index constituents are reviewed semi-annually in June and December. The next review is due to take place in December (2020) using data from the close of business on Nov 23, based on the ground rules.
"The outcome of the next KLCI review will be announced on Dec 3 and is effective on Dec 21,” they said.