Lim Wee Chai ups direct stake in Top Glove to 26.91% as share price tumbles

Top Glove Corp Bhd executive chairman Tan Sri Dr Lim Wee Chai

Top Glove Corp Bhd executive chairman Tan Sri Dr Lim Wee Chai

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KUALA LUMPUR (June 25): Top Glove Corp Bhd executive chairman Tan Sri Dr Lim Wee Chai has raised his shareholding in the rubber glove manufacturer, as the group’s share price sank in the past one month.

In a Bursa Malaysia filing yesterday (June 24), Lim raised his direct shareholding in the company to 26.91%, comprising 2.15 billion shares, after he acquired 6.18 million shares for three consecutive days from June 22 to 24.

He also has an indirect stake of 8.50% in Top Glove, comprising 680.19 million shares, according to the company.

According to Top Glove's filing, 2.15 million shares were bought at RM4.6538 per share, 1.85 million were acquired at RM4.4403 per share, and 2.18 million were acquired at RM4.3377 per share. In total, Lim roughly spent RM27.66 million on the share purchase.

Top Glove shares, which closed at RM4.35 today, has fallen 15.04% from RM5.18 recorded on May 31.

The group’s share price has been trending downward, as Malaysia continues to ramp up its vaccination plan amid rising Covid-19 cases in the country.

On the vaccination front, as of June 24, cumulatively 6.82 million Covid-19 vaccine doses had been administered across the nation so far.

Follow our Covid-19 vaccination tracker to see where we are in the race to herd immunity.  

In a research note on Thursday, MIDF Research downgraded the glove sector to "neutral" from "positive", as it noted that the upcycle of the sector is coming to a tail end.

Its analyst Ng Bei Shan said the diminishing spot rates and lower average selling prices (ASPs) show that urgent demand has peaked.

Compared with the end of 2020, Ng said spot ratios for rubber gloves have eased, which means that the urgent orders for rubber gloves may be subsiding.

"Although we expect prices to stay above pre-pandemic level, we opine that as the urgency for gloves subsides, ASPs for gloves are likely to tilt lower," she said.

She also noted that the improving situation of the pandemic in developed countries has shifted the urgent demand for rubber gloves.

The high vaccination rate in the UK, the US and EU would also imply that the urgency for rubber gloves in these countries may slow down and put further pressure on ASPs, going forward, she added.

Top Glove shares, which settled unchanged at RM4.35 today, gave the world's largest rubber glove manufacturer a market capitalisation of RM35.70 billion. Year to date, the stock has fallen 20.91%. 

Tan Choe Choe