KUALA LUMPUR (Jan 2): Hartalega Holdings Bhd's share price fell as much as 16 sen or 2.92% to RM5.32 in afternoon trades today while Top Glove Corp Bhd dropped nine sen or 1.91% to RM4.61 as a stronger ringgit versus the US dollar generated concerns about Malaysian glove manufacturers' income.

Export-based Malaysian glove manufacturers sell their products in US dollars; hence, a stronger ringgit leads to anticipation of lower income when their US dollar-denominated incomes are converted to ringgit.

At about 3:20pm today, Hartalega shares were traded at RM5.32 for a market capitalisation of RM17.98 billion while Top Glove was transacted at RM4.64 for a market value of RM11.96 billion.

Among other glove manufacturers, Supermax Corp Bhd's share price fell one sen or 0.72% to RM1.38 for a market worth of RM1.79 billion.

In currency markets, the ringgit appreciated to its strongest point so far today against the US dollar at 4.0813. At the time of writing, the exchange rate was 4.0885.

Over the last one year, the ringgit had strengthened to current levels against the US dollar after depreciating to its weakest point at 4.2280.

Bloomberg reported today the ringgit appreciated to its strongest level against the US dollar since April 2019 with sentiment buoyed by an improving global trade outlook and data suggesting Malaysian manufacturing may be on the mend.

In a rubber glove sector note today, Kenanga Investment Bank Bhd analyst Raymond Choo Ping Khoon said Kenanga maintained its 'overweight' call on the Malaysian rubber glove industry while its top pick in the sector is Hartalega.

"Maintain overweight (on the sector). Our investment case is based on: (i) nascent signs from industry leaders pointing towards a strong rebound in volume growth, (ii) nitrile gloves market share to gain further momentum, potential 30% growth in nitrile, and (iii) expected earnings growth driven by new capacity expansion.

"We like Hartalega for: (i) its 'highly automated production processes' model, which is moving from 'good' to 'great' as they are head and shoulders above peers in terms of better margins and costs reduction, (ii) constantly evolving via innovative products development, and (iii) its nitrile gloves segment, which is booming," Choo said.

Choo said Kenanga has an outperform call on Hartalega shares with a target price (TP) of RM6.

He said Kenanga has an underperform recommendation on Top Glove with a RM4.25 TP, as well as an outperform call on Supermax with a RM1.75 TP.