Roller-coaster ride for glove makers continues

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KUALA LUMPUR (Aug 18): The sharp swing in Malaysian glove makers' shares continued today, with the counters staging a strong rebound following the recent fierce sell-off, encouraged by some positive news for heart-strong investors.

Despite a dip into the red in early trading, all eight listed glove makers took the leading spots on Bursa Malaysia's top gainers as investors chased for the shares in the afternoon session.

The Big Four led the pack, with Supermax Corp Bhd up RM4.10 or 24.55% to RM20.80, Top Glove Corp Bhd up RM3.66 or 16.32% to RM26.08, Kossan Rubber Industries Bhd up RM2.32 or 16.96% to RM16, and Hartalega Holdings Bhd up RM2 or 12.85% to RM17.56.

Investors also scrambled for Supermax and Top Glove warrants — which also emerged as among the top gainers today.

Gains in Top Glove and Hartalega shares were the main contributor to the 1.1% rise in the FBM KLCI. Overall, among the index's component stocks, decliners outnumbered gainers by 20 to 10 with all banks in the red.

Meanwhile, all four small-cap glove makers hit limit-up of 30% gain, with Rubberex Corp (M) Bhd up RM1.29 to RM5.61, Comfort Gloves Bhd up RM1.08 to RM4.68, Careplus Group Bhd up 93 sen to RM4.03 and HLT Global Bhd up 39 sen to RM1.71.

Top Glove shareholders today approved the company's two-for-one bonus issue. The entitlement and target completion dates for the issue are Sept 4 and 7.

Across the sector, investors were also encouraged by news earlier today that only one stockbroking firm had imposed a curb on contra trading on "certain counters", which was done independently of other firms.

Earlier reports of a contra-trading ban on glove counters had contributed to the latest series of sell-offs in the last few days.

Also today, The Edge quoted Top Glove chairman Tan Sri Dr Lim Wee Chai as saying that neither Top Glove nor the Malaysian Rubber Glove Manufacturers Association had been consulted by the authorities about a windfall tax.

Yesterday, the Dewan Rakyat was told that the government had not decided on whether to impose a windfall tax on industries that have been outperforming during the pandemic.

Speculation had been rife about an additional tax by Putrajaya on glove makers, which have seen profits jump between three times and 25 times in their latest quarter as sales volume and selling prices soared amid the Covid-19 pandemic.

Despite today's rebound, shares in all glove makers are still some way off their peaks that were seen in the first week of August by between 8.17% and 46.23%. From their peaks up until today, the eight glove makers have shed off a combined RM27.49 billion in market capitalisation.