(Updated)

Glove makers rebound as Omicron concerns linger

Glove makers rebound as Omicron concerns linger
-A +A

KUALA LUMPUR (Dec 2): Share prices of rubber glove makers including Top Glove Corp Bhd and Hartalega Holdings Bhd rebounded on bargain hunting on Thursday (Dec 2) after investors took profit in recent days and as they assessed updates on the Omicron variant of Covid-19.

At 10.16am, Top Glove shares were traded 11 sen or 4.01% higher at RM2.85, while Hartalega’s share price had risen seven sen or 1.11% to RM6.36.

Top Glove’s share price had risen to current levels from its closing price of RM2.25 last Thursday (Nov 25), while Hartalega had climbed to present levels from its finishing price of RM5.13.

Rakuten Trade Sdn Bhd head of equity sales Vincent Lau told The Edge on Thursday: “For the last two days, we have seen investors booked their profits on glove stocks and today (Thursday), they’re coming back with bargain-hunting activities [following] the selling pressure previously.”

“I think this rotational play will stay, especially for glove maker stocks, as investors are still assessing the latest developments surrounding the Omicron variant,” Lau said.

Glove makers have been closely watched since the Covid-19 pandemic started in early 2020 due to gloves being crucial personal protective equipment to curb the spread of the outbreak.

Looking back, share prices of glove makers rose substantially during the onset of Covid-19 in anticipation that the companies will register higher earnings from stronger demand for their products.

However, news of global Covid-19 vaccination progress tempered such sentiment on stronger demand for gloves in recent months before the current Omicron variant rekindled investors' enthusiasm for glove manufacturers.

As for the broader stock market, Hong Leong Investment Bank Bhd (HLIB) analyst Ng Jun Sheng wrote in a note on Thursday that HLIB expects "wild swings” for Bursa Malaysia-listed shares after the 30-stock FBM KLCI closed down below 1,500 points on Wednesday as factors including the Omicron variant drove sentiment.

"Sentiment will remain fragile as investors digest the renewed selling spree by foreign investors, hawkish comments from the Fed (US Federal Reserve) and heightened worries that the more transmissible Omicron variant raises the likelihood of stricter restrictions and extends disruptions to the supply chain and accelerates further inflation,” Ng said.

KLCI components Top Glove and Hartalega are also members of Bursa’s Health Care index.

At 10.56am on Thursday, the KLCI had risen 1.15 points or 0.08% to 1,498.08, while the Health Care index had climbed 123.65 points or 0.53% to 2,387.05.

Chong Jin Hun