Supermax tops Bursa gainers as bargain hunting on glove stocks returns

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KUALA LUMPUR (Sept 11): Supermax Corp Bhd, Top Glove Corp Bhd, Kossan Rubber Industries Bhd and Hartalega Holdings Bhd surged to settle among Bursa Malaysia's top gainers at afternoon break today on bargain hunting.  

Earlier, the share prices of the rubber glove manufacturers fell on factors including news on the development of Covid-19 vaccines to curb the outbreak.

At 12:30pm, top gainer Supermax settled up RM1.15 or RM18.85% at RM7.25 while Top Glove climbed RM1.11 or 17.21% to RM7.56.

Kossan rose 74 sen or 7.63% to RM10.44 while Hartalega was up 62 sen or 5.22% at RM12.50.

From a fundamental viewpoint, glove manufacturers in recent days saw their share prices drop on profit taking after rising substantially as the Covid-19 pandemic had led to expectations of higher demand for gloves to curb the spread of the coronavirus.

However, news on the development of Covid-19 vaccines do not augur well for rubber glove manufacturers on expectations that such sentiment will curb demand for rubber gloves.

Investors are also weighing the technical aspect of rubber glove share trades. Despite rubber glove manufacturers’ share price rise today, analysts are mindful that the sharp correction of their share prices may continue.

"The sharp correction should extend following the breakdown of their immediate uptrend support before bargain hunters return at lower retracement support,” TA Securities Holdings Bhd analysts wrote in a note today.

Rubber glove manufacturers are constituents of Bursa’s Healthcare Index, which includes hospital operators and pharmaceutical companies. Top Glove and Hartalega are also members of the 30-stock FBM KLCI.

At 12:30pm today, the healthcare index settled up 7.01% to become the largest percentage gainer among Bursa indices.

The KLCI added 0.31%.

Chong Jin Hun