KUALA LUMPUR (May 8): Glove stocks appear to come under selling pressure after one of the sector’s largest producers Hartalega Holdings Bhd announced plan to decommission its Bestari Jaya production facility to weather through tough market landscape.

Hartalega itself fell as much as 8.1% to an intraday low of RM1.81 following the announcement, before paring losses to close at RM1.87, down 10 sen or 5.1% on Monday (May 8), valuing it at RM6.41 billion.

Top Glove Corp Bhd declined by 6.5 sen or 6.44% to 94.5 sen, giving it a market capitalisation of RM7.76 billion.

Year-to-date, shares of both glove producers still recorded a gain of 4.4% for Top Glove and 10% for Hartalega.

Supermax Corp Bhd also settled lower by four sen or 4.44% to 86 sen on Monday, while Kossan Rubber Industries Bhd closed unchanged at RM1.22.

The glove sector, once the darling of the stock market during the peak of the pandemic, has been struggling operationally as softening demand weighs on selling prices, which led to margin squeeze amid rising raw material prices.

Most of them have been taking steps to rationalise previously announced aggressive plans to ramp up production capacity as expansion by peers in China worsen the industry’s supply and demand dynamic.

Top Glove, for one, had decided to let its Hong Kong initial public offering application to lapse last year, a fund-raising round originally planned to fund the group’s expansion and to tap market demand from China.