KUALA LUMPUR (Aug 13): Rubber glove manufacturers Top Glove Corp Bhd and Kossan Rubber Industries Bhd were among the top gainers as investors expected the manufacturers to benefit from the weakening of ringgit against the US dollar.  

Top Glove rose as much as 45 sen or 6.25% to RM7.65, while Kossan climbed 30 sen or 4.62% to RM6.79 in the earlier session.  

At 11.24am, Top Glove was traded at RM7.55, up 35 sen or 4.86%, while Kossan was traded at RM6.75, up 26 sen or 4%.  

For comparison, the KLCI was up 11.96 points or 0.74% to 1,621.88.

Alliance Investment Bank remisier Raymond Foo told theedgemarkets.com that these counters have followed the rebound of the overall stock market today.

“These export-based manufacturers are definitely going to benefit from the weaker ringgit against US dollar,” he said via phone.

A weaker ringgit versus the US dollar bodes well for export-based rubber glove manufacturers as their US dollar-denominated income will be higher when converted into the ringgit.

Top Glove (fundamental: 2.5; valuation: 1.1) and Kossan (fundamental: 2.1; valuation: 0.5) have been the “darling” of investors and have been on an upward trend following the weakening of the ringgit against the greenback.

Year-to-date, Top Glove shares have risen more than 60% while Kossan shares have climbed near to 50%.

The ringgit has weakened past the 4.0000 level against the US dollar yesterday.

However, the ringgit has strengthened today and was traded at 3.9967 against the US dollar as at 11.33am.

AmBank FX Research expects the US dollar and the ringgit to trade in the range of 3.9800 to 4.0250 today.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)