Risk of Top Glove and Hartalega being excluded from KLCI component stocks remains, says Citi Research
KUALA LUMPUR (Oct 19): Top Glove Corp Bhd and Hartalega Holdings Bhd are at risk of being excluded from the list of 30 component stocks of the FBM KLCI in the upcoming review, according to Citi Research.
On Wednesday (Oct 19), both Top Glove’s and Hartalega’s market cap rankings were below the top 30 stocks, with Top Glove ranking 48th and Hartalega at 43rd place.
If this trend does not change heading into the year-end, Top Glove and Hartalega will be booted out from the 30 component stocks of the KLCI list.
Based on FTSE Russell’s rules, a stock would be removed from the KLCI if its market cap ranking drops to 36th place or lower, while one will make it to the list if its ranking rises to 25th or above.
Hartalega was added as part of the 30 component stocks of the KLCI in June 2018, while Top Glove followed suit six months later in December 2018.
Top Glove, the most actively traded stock of the day, which saw 73.01 million shares transacted, lost 1.5 sen or 2.03% to settle at 72.5 sen, valuing it at RM5.81 billion.
Despite the stock having gained nine sen or 14.17% over the past week (from Oct 12), it has fallen 72.01% year-to-date (YTD), from RM2.59 at the end of December last year.
Similarly, Hartalega’s shares also took a nosedive YTD, as it has plunged 67.89% to RM1.84, from RM5.39 on Dec 31, 2021. The stock has risen 11 sen or 6.36% over the past week. On Wednesday, it fell eight sen or 4.17% to RM1.84. At RM1.84, it is valued at RM6.29 billion.
Both Supermax Corp Bhd and Kossan Rubber Industries Bhd also posted gains over the past week, where Supermax rose 19.01% and Kossan saw modest gains of 2.63%.
YTD, Supermax has lost 42.52% to 84.5 sen, from RM1.47 on Dec 31, 2021. It currently has a market capitalisation of RM2.30 billion.
Meanwhile, Kossan has shrunk 40.63% to RM1.14, from RM1.92 during the same period. At RM1.14, Kossan has a market capitalisation of RM2.92 billion.
Despite the glove sector regaining some of its lost ground over the past week, Citi Research analyst Megat Fais said recent conversations with industry players suggest that the challenging operating landscape remains unchanged.
“The spread of the new and sub-variants [of Covid-19] could lead to a surge in new cases, but a corresponding spike in demand is far from guarantee,” said Megat, adding that with current utilisation at 40% to 50%, demand for gloves has to pick up substantially before the pricing leverage returns to manufacturers.
While the weakness in the ringgit will provide some margin buffer, albeit still outweighed by challenges in pricing, low utilisation and rising costs with risks of KLCI/MSCI exclusion remain for Top Glove and Hartalega.
Against this challenging backdrop, Megat said he remains cautious about the glove sector, despite share prices being well below pre-Covid-19 levels.
“The growing uncertainty on profitability and negative earnings momentum will cap any buying interest,” he observed.
http://www.theedgemarkets.com/article/risk-top-glove-and-hartalega-being-excluded-klci-component-stocks-remains-says-citi-research
Singapore Investment
-
-
-
All that Glitters Is Gold2 hours ago
-
-
Portfolio (March 30, 2024)5 hours ago
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5 Singapore Stocks Under Pressure15 hours ago
-
-
QAF #77 - 2023 Annual Report17 hours ago
-
-
-
-
-
The Secret To Investing1 day ago
-
-
-
-
-
-
-
-
-
-
-
The Green U-Turn3 days ago
-
-
-
Week Ahead3 days ago
-
Burnt out!3 days ago
-
-
-
-
Feb 2024 Expenditure4 days ago
-
-
-
-
-
-
-
Not Worth It5 days ago
-
Trip to Legoland5 days ago
-
-
-
-
-
-
-
-
Starting Our Second Property Cycle1 week ago
-
-
-
Position Update1 week ago
-
-
Finance Investment Movement 431 week ago
-
-
-
-
MAS Singapore Gold Vault2 weeks ago
-
-
Gaining And Holding2 weeks ago
-
-
-
-
Book Giveaway- Winners2 weeks ago
-
-
ICYMI: Corporate Connect with Singpost2 weeks ago
-
-
Just sold at record high!3 weeks ago
-
-
-
-
-
-
-
-
-
Monthly IBKR Update – Feb 20243 weeks ago
-
-
Feb 2024 Portfolio3 weeks ago
-
Rethinking my financial targets for 20243 weeks ago
-
-
-
-
Summary of February 20244 weeks ago
-
Portfolio -- Feb 20244 weeks ago
-
The Market Is A Scam!4 weeks ago
-
-
-
-
-
-
-
-
-
-
-
Today’s Deal of the day – Max Miles5 weeks ago
-
-
Options Trading Journal Jan 20241 month ago
-
-
-
-
-
-
-
-
-
-
-
End of 2023 Review2 months ago
-
-
Year 2023 DIYQuant Portfolio Performance Report2 months ago
-
Monthly Summary of November 20233 months ago
-
3 Simple Poker Strategies for Beginners3 months ago
-
Migration of website4 months ago
-
-
Abandon REITS?4 months ago
-
-
-
-
-
-
-
-
-
August 2023 Portfolio Updates6 months ago
-
-
-
-
Hello SP Group, I'm Back!9 months ago
-
-
-
-
I am in debt9 months ago
-
A New Light10 months ago
-
-
-
-
-
-
-
Demoralized1 year ago
-
2022 Thoughts, Hello 2023!1 year ago
-
Series of Defaults for Maple Finance1 year ago
-
Takeaways from “Sea Change”1 year ago
-
-
Greed is Coming Back1 year ago
-
-
-
-
-
-
-
-
-
-
-
What is Overemployment1 year ago
-
-
-
-
-
-
-
-
-
-
-
Home
HARTA
TOPGLOV
Risk of Top Glove and Hartalega being excluded from KLCI component stocks remains, says Citi Research