Glove stocks dominate list of top losers as investors take profit on vaccine news

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KUALA LUMPUR (Oct 21): Glove stocks dominated the list of top losers today as investors took profit following the recent rally and fresh progress in the development of a vaccine for Covid-19. 

Hartalega Holdings Bhd, Supermax Corp Bhd, Top Glove Corp Bhd, Kossan Rubber Industries Bhd and Comfort Gloves Bhd were among the top 10 losers today.

During the day, Hartalega plunged as much as 7.37% or RM1.40 to RM17.60, Supermax dropped as much as 8.31% or 79 sen to RM9.51, Top Glove declined as much as 10.36% or 89 sen to RM8.59, Kossan fell as much as 65 sen or 8% to RM7.48, and Comfort Gloves decreased by 44 sen or 9.02% to RM4.88.

“Investors are taking profit on the vaccine news. But this is a short-term movement,” Areca Capital Sdn Bhd chief executive officer (CEO) Danny Wong Teck Meng said when contacted.

“Their fundamentals remain intact. They can deliver earnings and dividends. The [share] prices are still decent, we are still holding them,” he said.

Phillip Capital Management Sdn Bhd chief investment officer Ang Kok Heng, meanwhile, also told theedgemarkets.com that the profit taking was not surprising as the glove stocks had done very well recently.

However, as global new Covid-19 cases remained high and demand for gloves remained strong, he was still positive on the glove sector’s medium-term outlook.

On the other hand, MIDF Research analyst Ng Bei Shan also said in a note today that it is still too early to conclude that the discovery of a vaccine could negatively impact average selling prices (ASPs) of gloves.

“Recall that the news flow of vaccine development had dampened the performance of glove stocks. We opine that demand for gloves should remain high due to the mass administration of the vaccination required,” she said.

American pharmaceutical company Eli Lilly earlier this month said that it was pausing enrolment of its antibody treatment. Separately, Johnson & Johnson (J&J) said it was halting all trials of its experimental Covid-19 vaccine after one participant developed an adverse reaction.

In September, AstraZeneca, which works with the University of Oxford, stalled its vaccine trials but has since resumed the trials again.

China, meanwhile, was reported to have pledged that Malaysia, Thailand, Cambodia and Laos will be among the “priority” recipients of Chinese vaccines. 

At the market close today, the glove counters ended above their intraday lows, with Hartalega closing down RM1.20 or 6.3% at RM17.84, Supermax down 86 sen or 8.3% at RM9.50, Top Glove down 60 sen or 6.33% at RM8.88, Kossan down 9.96% or 81 sen at RM7.32, and Comfort Gloves down 8.4% or 41 sen at RM4.47. 

S Kanagaraju