KUALA LUMPUR (Aug 21): Top Glove Corp Bhd and Supermax Corp Bhd's share prices rose among Bursa Malaysia top gainers in morning trades today after erasing intraday losses on bargain hunting and as investors continue to see rubber glove manufacturers as key beneficiaries of strong global demand for gloves due to the Covid-19 pandemic.

At 10:43am, Top Glove rose 44 sen or 1.62% to RM27.58 after falling to its lowest so far today at RM26.70.

Supermax climbed 32 sen or 1.53% to RM21.26 after falling to its lowest so far today at RM20.60.

Malaysian markets resumed trading today after markets were closed yesterday for a holiday in conjunction with Awal Muharram. 

Investors are bargain hunting for rubber glove manufacturers' shares after their share prices fell following analysts prediction of a potential Malaysia windfall tax levy on the glove sector and amid updates on the discovery of Covid-19 vaccines.

Maybank Investment Bank Bhd analyst Anand Pathmakanthan wrote in a strategy note that the "market faces a difficult and uncertain economic and earnings recovery path, with 2H20 downside risks including a potential windfall tax levy on the gloves sector”.

Anand said the powerful year-to-date share price rally in glove manufacturers is fundamentally grounded in sharply higher volume demand and average selling prices.

Top Glove and Supermax's share prices today could have taken cue from these companies' latest filings with Bursa Malaysia.

On Wednesday, Top Glove said in a filing that executive chairman Tan Sri Dr Lim Wee Chai and executive director Lim Hooi Sin intended to deal in the securities of Top Glove during the closed period prior to the release of its financial results for the fourth quarter ending Aug 31, 2020.

In a separate filing on that day, Top Glove said its securities would be traded and quoted ex-bonus issue from Sept 3. Top Glove said the corporate exercise involved a bonus issue of up to 5.48 billion (5,476,974,322) new shares in the company on the basis of two bonus shares for one existing share held as at 5pm on Sep 4, which is the entitlement date for the exercise.

Meanwhile, Supermax, which is also undertaking a bonus issue, said in a filing that the company's securities will be traded and quoted ex-bonus issue from Sept 4. Supermax said its bonus issue involves up to 1.36 billion (1,360,309,760) new shares in the company on the basis of one bonus share for every one existing share owned.