KUALA LUMPUR (June 15): Glove stocks were the selling targets on Bursa Malaysia today with many of them plummeting more than 10%, although the rising risk of a second wave of infections in China could mean another boost to rubber glove demand.

Those still bullish took the sell-off as glove stocks entering a "consolidation phase", saying it was a healthy pullback after the strong march to record highs.

Leading the decline was Supermax Corp Bhd, which slid 13.15% or RM1.04 to RM6.87, followed by Careplus Group Bhd, shedding 13% or 19 sen to RM1.27, while Rubberex Corp (M) Bhd was down 12.42% or 39 sen at RM2.75.

Comfort Gloves Bhd dived 12.3% or 36 sen to RM2.57 and Top Glove Corp Bhd dropped 10.06% or RM1.70 to RM15.20.

The other glove counters fell by less than 10%, with Hartalega Holdings Bhd down 6.71% or 84 sen at RM11.68 and Kossan Rubber Industries Bhd was down 8.8% or 79 sen at RM8.19.

A quick glimpse of the glove stocks' performances shows that the biggest falls were recorded by the counters that had gone up the most on a year-to-date basis.

Areca Capital Sdn Bhd chief executive officer Danny Wong Teck Meng said, "Today's price performances for glove stocks are considered very normal."

"It is in fact healthy in nature, as most investors involved in glove counters would have made handsome gains throughout the rally," he told theedgemarkets.com.

Given the strong outlook issued by most glove companies during the latest quarterly disclosures, Wong said, "Today's decline could present an entry opportunity for those who missed the boat previously."

Rakuten Trade Sdn Bhd research vice president Vincent Lau concurred that without a functional vaccine in sight yet in the fight against Covid-19, glove stocks would continue to attract interest as the strong demand for gloves would sustain for a prolonged period of time.

"The market has been on a hyperbolic uptrend in the last few weeks, which is a sign of overheating, and one could expect the market to be poised for a healthy pullback," Lau said.

Nevertheless, Areca's Wong expects market volatility to increase in the near term. He advised investors to consider diversifying their stock holdings across a few sectors, and avoid overexposure to a single sector.