Glove share bargain hunt nudges Health Care Index to become top percentage gainer

Glove share bargain hunt nudges Health Care Index to become top percentage gainer
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KUALA LUMPUR (April 6): Bursa Malaysia's Health Care Index settled up 30.01 points or 1.03% at 2,951.59 at the local bourse’s afternoon break today to become the top percentage gainer among the exchange gauges, partly helped by rubber glove manufacturers’ share price rise on bargain hunting and as investors weighed news of still-high numbers of Covid-19 cases in certain countries.

At a glance during Bursa’s 12:30pm break, top gainers included rubber glove manufacturers Hartalega Holdings Bhd, Supermax Corp Bhd, Kossan Rubber Industries Bhd and Top Glove Corp Bhd.

Hartalega’s share price settled up 30 sen or 3.35% at RM9.25, Supermax rose 16 sen or 4.18% to RM3.99, Kossan added 10 sen or 3.13% to RM3.29 while Top Glove was 10 sen or 2.14% higher at RM4.78.

Glove manufacturers are among constituents of the Health Care index, which also tracks share prices of hospital operators and pharmaceutical companies.

Top Glove, Hartalega and Supermax are also members of the 30-stock FBM KLCI.

Share prices of glove manufacturers have risen today on apparent bargain hunting after these stocks’ prices fell due to perception that the progress in global Covid-19 vaccination to curb the spread of the pandemic will lead to less demand for gloves and as investors evaluated forced labour allegations against the glove manufacturing industry.

However, news on the rise in the number of Covid-19 cases in certain countries like India and Japan could have reversed such perception on glove demand as the global community continues to contend with the impact of the pandemic.

It was reported today that many Indian state leaders have asked Prime Minister Narendra Modi to open up vaccinations to most of the country's hundreds of millions of adults, following a second surge in infections that has eclipsed the first wave. 

News reports indicated that India breached the grim milestone of 100,000 daily infections for the first time yesterday, and cases are likely to stay high again when fresh figures are released later today. 

"With 12.6 million cases, India is the worst affected country after the United States and Brazil,” Reuters reported.

For comparison, Malaysia’s cumulative number of Covid-19 cases stood at 352,029 as of yesterday after the nation reported 1,070 newly-infected individuals, according to health director-general Tan Sri Dr Noor Hisham Abdullah’s statement.

Dr Noor Hisham said the country also reported yesterday 1,294 persons who recovered from Covid-19.

The figure brought the nation's cumulative number of individuals who have recovered from the pandemic to 336,456 so far, he said.

CGS-CIMB Securities Sdn Bhd analyst Ivy Ng Lee Fang wrote in a note today that last week (March 29 to April 2), local institutional investors were net sellers in Bursa Malaysia's healthcare sector, while local retail investors were net buyers in the sector. 

"Healthcare was the key drag to KLCI performance last week. Top Glove was the largest net sell by local institutions, but largest net buy by retail and foreign investors,” Ng said.

Today, TA Securities Holdings Bhd analysts wrote in a note that there was selling pressure on key rubber glove stocks yesterday on Bursa. 

"Bursa Malaysia blue chips stayed range bound on cautious trade Monday (April 5), with strong gains in the construction sector, which rose 2.2% following the government approval of MRT Line 3 offset by selling pressure on key rubber glove stocks. The KLCI slipped 1.11 points to settle at 1,584.24, off an early high of 1,590.67 and low of 1,582.20, as gainers edged losers 542 to 532 on moderate turnover of 7.84 billion shares worth RM2.8 billion,” they said.