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Glove makers dominate list of top losers as vaccine roll-out begins

KUALA LUMPUR (Dec 14): Glove makers continued to dominate the list of top losers as investors took profit amid the rolling out of Covid-19 vaccines.

Hartalega Holdings Bhd topped the list, falling as much as RM1.16 or 8.45% to RM12.56. At 11.02 am, the counter had pared some losses at RM12.62, still down RM1.10 or 8.02%.

Supermax Corp Bhd, meanwhile, fell as much as 68 sen or 8.99% to RM6.88. At 11.03am, the counter stood at RM6.94, still down 62 sen or 8.2%, making it the second top loser.

Kossan Rubber Industries Bhd, the fourth top loser this morning, lost as much as 54 sen or 10.02% to RM4.85. At 11.04 am, the counter had pared some losses at RM4.96, still down 43 sen or 7.98%.

Top Glove Corp Bhd and Comfort Gloves Bhd were also among the top losers. At 11.04 am, Top Glove had shed 39 sen or 5.65% to RM6.51, while Comfort Gloves slipped 23 sen or 6.52% to RM3.30.

Reuters reported that the development of coronavirus vaccines cheered risk sentiment, with the first shipments speeding across the US as part of a historic mission to inoculate more than 100 million people by the end of March.

Last Friday, JPMorgan analysts Jeffrey Ng and YY Cheah said they expect glove prices to weaken in the second half of next year (2H21) as supply tightness eases.

The foreign research house reinstated its coverage of Top Glove, though with an "underweight" recommendation and a fair value (FV) of RM3.50.

It also initiated coverage of Hartalega and Kossan, also with "underweight" ratings, with FVs of RM8.50 and RM3.80 respectively.

Local research houses, however, remained positive on the glove sector's outlook.

Maybank Investment Bank (IB) Research analyst Lee Yen Ling said in a report today she expects all glove players to report stronger earnings for the fourth quarter of 2020 (4Q20) and 1Q21 on average selling price (ASP) hikes, which would be more than enough to offset raw material cost increases as well as a weaker US dollar against the ringgit.

She maintained her "buy" calls for Hartalega, Kossan and Top Glove, with respective target prices (TPs) of RM20.60, RM10.05 and RM8.65.

http://www.theedgemarkets.com/article/glove-makers-dominate-list-top-losers-vaccine-rollout-begins

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