KUALA LUMPUR (June 5): After the knee-jerk reaction to news on stockbrokers tightening margin financing two days ago, the glove makers are back on their climb to fresh peaks.
Top Glove Corp Bhd and Supermax Corp Bhd marched to record highs this morning.
Top Glove opened at RM16.18, substantially higher than yesterday's closing of RM15.44, and soared to RM16.70. As at noon, the stock was trading at RM16.62, a big leap of RM1.18, or 7.64% with 12.96 million shares traded.
Analysts have been revising their earnings forecasts for Top Glove ahead of its quarterly earnings announcement next week. The highest target price is RM23, pegged by Credit Suisse.
Likewise, Supermax also started the trading on a high note. The stock opened at RM8.50, higher than yesterday's closing of RM8.20. As at noon, Supermax was trading at RM8.80, up 60 sen or 7.3%.
The buying spree continues across the rubber glove sector.
Hartalega Holdings Bhd was up 30 sen or 2.55% at RM12.08, while Kossan Rubber Industries Bhd climbed 18 sen or 2.05% to RM8.96.
Smaller-cap companies like Rubberex Corp (M) Bhd rose 12 sen to RM3.83 after it hit a day's high of RM4.05 and Comfort Gloves Bhd was up 10 sen to RM3.77 while Careplus Group Bhd jumped 16 sen to RM1.70.
Adventa Bhd, which does not own any glove manufacturing business, also joined the rally. Its share price gained 19 sen or 9.9% to RM2.11.
Some analysts believe the craze for rubber glove shares will not abate just yet, as they think it is not just a simple cyclical phenomenon but a structural shift in demand that could last for some time as people become more health-conscious.
Speaking at Maybank Kim Eng's Invest Asean 2020 virtual conference yesterday, Maybank Kim Eng head of regional equity research Anand Pathmakanthan said he expected a multi-year story for the glove makers.
He noted that the ongoing Covid-19 pandemic had fundamentally changed the world, especially healthcare, and gloves would play an important part in ensuring that contagion does not happen again.