KUALA LUMPUR (July 18): Glove counters have stayed resilient this past week, despite some knee-jerk share-dumping driven by some negative news earlier in the week.

The most recent one was the news involving the world's biggest rubber glove maker, Top Glove Corp Bhd. News about a detention order being placed by US Customs on gloves manufactured by two of its subsidiaries sent its stocks on a dive on Thursday, prior to a one-hour trading suspension from 2.30pm to make way for its confirmation of the news. 

Before the suspension, Top Glove was the exchange's largest decliner after having sunk RM2.10 or 9.63% to RM19.70. Its scheduled trading resumption, however, didn't happen as it coincided with a exchange-wide trading halt on Bursa Malaysia, which the bourse operator later said was due to a 'technical issue'. 

When trading finally resumed on Friday, Top Glove's shares, which gapped down on opening to a low of RM19.60, rebounded 16.65% or RM3.28 — its biggest share price jump in a day in terms of value — to finish the day at RM22.98, as investors appeared to shrug off the US detention order. 

On the Singapore Stock Exchange, the dual-listed Top Glove also rebounded 15.87% to close at S$7.52, more than regaining the 11.09% it lost when it sank to S$6.49 from S$7.3 a day earlier. 

Prior to this incident, rising hopes that a vaccine had been found for Covid-19 sparked a heavy selldown on Wednesday on the four biggest glove companies on the local stock exchange — Top Glove, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd — which cost them a collective RM10.5 billion worth of market cap in a single day.

Hartalega, Supermax and Kossan all rebounded thereafter. Hartalega, which sank to RM15.60 on Wednesday, soared to RM17.1 yesterday, to finish the week with a 0.23% gain. 
Supermax climbed 29.96% throughout the week to close at RM17.7 yesterday, while Kossan ended the week at RM13.5, up 9.05%.

Their smaller glove counterparts, namely Careplus Group Bhd (up 21.48% week-on-week to close at RM1.81), Comfort Glove Bhd (up 8.33% to RM3.9), and Rubberex Corp Bhd (up 0.85% to RM3.57) also finished the week stronger.  

Meanwhile, in line with the recovery of the component glove stocks, which have increased weightage on the FBM KLCI, the benchmark index reversed its losses yesterday to close 2% or 31.33 points higher at 1,593.33, from Thursday's 1,565.

Indeed, the continued rally of the glove stocks also helped lift the KLCI to close the week on a stronger note, compared to last Friday's close of 1,591.84.

Analysts have remained bullish on Top Glove, despite news that its subsidiaries' gloves have been detained by the US Customs.

According to Bloomberg, 21 out of 23 analysts covering the stock kept their 'buy' calls on it while two have it on 'hold', with a 12-month consensus target price of RM26.56. This suggests a potential upside of 15.6% from today's closing price of RM22.98. 

Seven research houses penned in a TP of over RM30, with Credit Suisse leading with the highest TP of RM37, followed by Kenanga Investment Bank Bhd's RM32, TA Securities Holdings Bhd's RM31.66, Hong Leong Investment Bank Bhd's RM31.31 , BIMB Securities Sdn Bhd's RM31.30, Nomura's RM30.65, and Macquarie's RM30.4. 

Year-to-date, Top Glove shares price has soared 388.94%, Hartalega has spiked 212.04% and Supermax has skyrocketed 1173%, while Kossan jumped 224%. Careplus also recorded an impressive growth of 1031%, while Comfort gloves and Rubberex gained 394% and 561%, respectively.