KUALA LUMPUR (Dec 18): Glove maker counters jumped in morning trades today following the strong quarterly results reported by major glove manufacturers including Top Glove Corp Bhd.
Analysts said they anticipate more favourable results forthcoming.
At 12.07pm, Careplus Group Bhd rose 1.5 sen or 2.61%, after paring gains at two sen, to 59 sen with 8.79 million shares done for a market capitalisation of RM213.6 million.
At the same time, Supermax Corp Bhd grew 12 sen or 4.05%, after paring gains at 15 sen, to RM3.08 with 12 million shares changing hands and a market capitalisation of RM1.98 million.
Top Glove, which saw a 164% hike in its net profit for the first quarter ended Nov 30, 2015 (1QFY16) to RM128.35 million on higher glove sales volume, went up 10 sen or 0.74% to RM13.70 with 5.05 million shares traded giving it a market capitalisation of RM8.48 billion.
It pared losses at two sen or 0.15% drop to RM13.58 with 5.67 million done at 12.05pm.
An analyst told theedgemarkets.com that apart from the strong performance by glove makers, which has inspired investors to buy, the interest rate hike by the US Federal Reserve also indicated that the US dollar will strengthen further.
"According to our technical analysis, most glove players have been cashing out on Dec 15 and 16. With the interest rate increase, investors expect the (US) dollar to strengthen.
"Since glove manufacturers are export-oriented and transact in US dollar, market traders are moved by such sentiments," she said.
On Wednesday, the US Federal Reserve announced the much-anticipated rise in interest rates to 0.25% after almost a decade.
At 12.21pm, the ringgit had declined 0.002 points or 0.05% to 4.3150 against the US dollar.
Interpacific Securities remisier Sam Ng said Top Glove's exceptional 1QFY16 results has set the theme for glove makers' quarterly performance.
"Investors are looking at Supermax, for which its second quarter will end on Dec 31, 2015. They are confident that the results will be good especially now because of the strengthening dollar," he said.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)