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KUALA LUMPUR (March 17): Glove stocks came under renewed selling pressure in the first hour of trading on Friday morning (March 17) after Top Glove Corp Bhd, the world’s largest glove producer, reported a third loss-making quarter, weighed down by the existing glut in stocks, and continued decline in average selling prices, compounded by rising production costs.

Top Glove, which reported a net loss of RM164.67 million for the second quarter ended Feb 28, 2023, was down 1.5 sen or 1.8% at 82 sen a share, giving it a market capitalisation of RM6.64 billion at the time of writing. It was the second most active stock, with five million shares traded. 

Among other major glove companies, Kossan Rubber Industries Bhd fell two sen or 1.61% to RM1.22, Hartalega Holdings Bhd dropped three sen or 1.69% to RM1.75, and Supermax Corp Bhd fell 2.35% to 83 sen. 

Top Glove, Careplus and Hartalega were among the top 11 active counters in early trade.

Rakuten Trade Sdn Bhd vice-president of equity research Thong Pak Leng said selling pressure may continue as the glove industry is currently undergoing a phase of inventory adjustments signaling acceleration in normalisation of average selling prices in the overall market.

“Meanwhile, China’s manufacturers are still undercutting by selling as low as US$15 to US$17 per 1,000 pieces, compared with US$18 to US$20 for local players.  

“We do not expect to see any good news till the end of the year,” Thong told The Edge when contacted.  

Later at 10.50am, the share prices of the four major glove makers had recovered. Top Glove rose half a sen to 84 sen, with its trading volume rising to 105.85 million shares, making it the most active stock on Bursa. Hartalega rose two sen to RM1.80, with a trading volume of 2.54 million shares. Supermax also rose two sen to 85 sen, while Kossan gained one sen to RM1.23. 

Thong told The Edge that the rebound in glove share prices was only "short-term". "Basically, we do not recommend [investors] to buy in at the moment," he added.

Edited ByIsabelle Francis
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