(Updated)

Top Glove, Hartalega offer fillip to Bursa after S&P 500's record high

Top Glove, Hartalega offer fillip to Bursa after S&P 500's record high
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KUALA LUMPUR (Dec 3): Top Glove Corp Bhd and its rival Hartalega Holdings Bhd both saw their share prices jump in morning trade on Bursa Malaysia today to partly contribute to the broader market’s rise after the S&P 500 closed overnight at a record high in the US and as global investors continued to weigh the economic impact of the Covid-19 pandemic

At 10.47am today, Hartalega’s share price had risen 24 sen or 1.67% to RM14.60. Later at 10.48am, Top Glove had added 13 sen or 1.95% to RM6.81.

Hartalega has risen as the stock trades ex-dividend today. The rubber glove manufacturer earlier declared a dividend of 3.85 sen a share for the second quarter ended Sept 30, 2020 (2QFY21).

Top Glove rose after the company announced yesterday a share buy-back, and that the group will release its financial results for the first quarter ended Nov 30, 2020 (1QFY21) next Wednesday (Dec 9).

At RM14.60, Hartalega had a market value of about RM50.08 billion, while Top Glove’s share price of RM6.81 gave it a market capitalisation of around RM55.84 billion.

MIDF Amanah Investment Bank Bhd analysts wrote in a note today that the rubber glove “shortage is likely to persist into 2021 as supply is unlikely to keep up with demand yet” as the world contends with the Covid-19 pandemic.

The analysts said 2020 had been an exceptional year for glove companies due to a surprise surge in demand for rubber gloves following the Covid-19 outbreak.

According to them, the glove industry as a whole is expected to increase production, but that may be constrained by raw material, production line contractor and foreign labour shortages.

"As such, we expect demand to outstrip supply by 30 billion pieces in 2020, 45.8 billion pieces in 2021 and 33.4 billion pieces in 2022. 

"In 2021, demand will continue to be supported by mass testing and administration of Covid-19 vaccines when they are available,” the analysts said.

On Bursa today, glove manufacturers' share price gains partly contributed to the broader market’s rise, which also benefited from an equity price rise in the banking sector.

Top Glove and Hartalega, being members of the 30-stock FBM KLCI, are also constituents of Bursa’s Healthcare Index.

The Healthcare index includes hospital operators and pharmaceutical firms.

At 10.46am, the KLCI was 1.05% higher, while the Healthcare Index had climbed 0.22%.

Reuters reported that in US stock markets overnight, the S&P 500 climbed to a record high close, while the Nasdaq Composite Index dipped, as investors weighed upbeat vaccine developments and a potential US coronavirus fiscal package against a bleak private jobs report.

The Dow Jones Industrial Average reportedly rose 0.2% to end at 29,883.79 points and the S&P 500 gained 0.18% to 3,669.01, while the Nasdaq slipped 0.05% to 12,349.37, dragged by a 2.7% slide in Tesla Inc.