Friday 29 Mar 2024
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KUALA LUMPUR (June 15): Supermax Corp Bhd’s share price, which closed down at 98.5 on Friday (June 10), fell below 90 sen on Wednesday (June 15) as investors weighed the impact of the Covid-19 vaccine-led economic recovery on the rubber glove manufacturing industry and amid broader market weakness ahead of the US Federal Reserve’s (Fed) interest rate decision.

At Bursa Malaysia on Wednesday, Supermax’s share price closed unchanged at 91 sen after falling to its intraday low at 89.5 sen. A total of 6.63 million shares changed hands at the 5pm market close.

Supermax shares were traded at between 89.5 sen and 93 sen on Wednesday.

Last Friday, Supermax’s share price closed down at 98.5 sen from RM1.01 a day earlier (Thursday June 9).

Since the beginning of 2022, Supermax’s share price has fallen to current levels from the stock’s closing price of RM1.43 on January 3, 2022.

Looking back, Supermax was closely watched as a beneficiary of the Covid-19 outbreak which started in early 2020, as demand for rubber gloves, seen as a crucial piece of personal protective equipment, surged to curb the global spread of Covid-19.

However, Covid-19-driven demand for gloves is now seen normalising as global vaccination progress leads to anticipation that the Covid-19 outbreak can be curbed.

Such sentiment is reflected in Supermax’s share price, which has been adjusted for the company’s one-for-one bonus share issue under which 1.36 billion bonus shares were listed and quoted on Bursa on September 8, 2020, according to Supermax’s Bursa filing then.

Supermax’s current share trade dynamics are also seen against broader market weakness ahead of the US Fed’s Wednesday interest rate decision, which could see the largest US rate hike in 28 years after the US reported last Friday that its May 2022 inflation accelerated at a faster-than-expected month-on-month pace of 1%.

Compared to a year earlier, US inflation, as measured by the Consumer Price Index, rose 8.6%. Such sentiment led to anticipation of more aggressive US interest rate hikes to fight inflation.

At Bursa on Wednesday, the FBM KLCI closed down 22.23 points or 1.5% at 1,459.05.

Supermax is a constituent of Bursa’s Health Care index, which ended down 1.78%.

Supermax, when approached by theedgemarkets.com, did not immediately comment on its share price and the company's outlook.

The company however directed theedgemarkets.com to Supermax’s June 2, 2022 press statement, which was filed with Bursa then.

"Supermax is continuously making efforts to elevate its human resource practices to be aligned with International Labour Organization (ILO) standards and the expectations of international regulatory bodies, such as (the) US Customs and Border Protection (CBP),” Supermax said then.

Supermax is contending with forced labour allegations.

Forced labour allegations against Supermax stemmed from among others, an October 20, 2021 statement by the CBP, which indicated that effective October 21, 2021, CBP officers at all US ports of entry would detain disposable rubber gloves produced by Supermax’s wholly-owned subsidiaries which included Maxter Glove Manufacturing Sdn Bhd and Supermax Glove Manufacturing.

"CBP issued a Withhold Release Order (WRO) against Supermax Corp Bhd and its subsidiaries based on information that reasonably indicates their use of forced labour in manufacturing operations," the CBP said.

The CBP said it identified 10 of the ILO indicators of forced labour during its investigation on Supermax.

 

Edited ByChong Jin Hun
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