KUALA LUMPUR (April 3): Malaysian glove stocks rallied strongly following initial declines on Thursday as investors spotted advantages from the sweeping US reciprocal tariffs.

Hartalega Holdings Bhd (KL:HARTA), the world’s largest maker of nitrile gloves, surged nearly 12% to RM2.08 while smaller rival Supermax Corporation Bhd (KL:SUPERMX) was up as much as 15% to 82.5 sen. The gains lifted Bursa Malaysia Healthcare Index by more than 3%.

By market close, the glove stocks surrendered part of their morning gains, but remained up between 5% and 9.8%, while Bursa Malaysia Healthcare Index's increase eased to 2%.

Even with a 24% tariff on Malaysian gloves, the average selling price would still be lower by up to US$6 per 1,000 pieces than Chinese-made gloves, said Apex Securities’ analyst Chelsea Chew. Malaysian manufacturers could retain a sizeable US market share of 45-55% or higher, she said.

Overnight, President Donald Trump announced in an executive order a 24% tariff on goods imported from Malaysia effective April 9, in a sweeping trade policy hitting all of its trading partners. China, Malaysia’s biggest trading partner, will be slapped with a 34% levy for imports into the US.

Malaysian glove manufacturers have been under pressure from Chinese rivals at a time of global oversupply. In response to escalating US pressure, Chinese glovemakers have responded by diverting production and competing aggressively in other markets.

Higher reciprocal tariffs faced by other Malaysia’s neighbours could create challenges for Chinese glovemakers looking to diversify their operations in Southeast Asia, said Malacca Securities head of research Loui Low.

Technology stocks, meanwhile, surrendered their morning gains and shifted downwards, making the sector the biggest loser of the day. By market close, the Bursa Malaysia Technology Index had fallen 1.62%, settling at 49.32 points.

Among the sector's biggest losers were Greatech Technology Bhd (KL:GREATEC), which has significant exposure to the US market. It dropped 8.24% to close at RM1.56. Other major decliners included Genetech Technology Bhd (KL:GENETEC), down 5.98% to RM1.10, and Vitrox Corporation Bhd (KL:VITROX), which fell 5.74% to RM2.79.

Even though semiconductors are spared from the reciprocal tariffs for now, “we remain mindful” of potential separate US tariffs on semiconductors with Trump still considering a 25% levy down the road, Hong Leong Investment Bank said in a note to clients.

Malaysia’s key competing nations — China, Taiwan and South Korea — are all subjected to steeper US reciprocal tariffs ranging from 25%-34%. Vietnam, a major exporter to the US and key beneficiary of diversion away from China, is now staring at a steep 46% tariff.

For Apex Securities’ Jayden Tan, the high cost of relocating backend processes to the US likely outweighs the tariff impact, making large-scale near-term onshoring by US tech giants improbable.

Malaysia will continue to hold its position as a vital backend semiconductor hub, he said but flagged potential pressure on Malaysian tech companies' margins.

Further, uncertainties surrounding trade policies under the Trump administration could deter investment decisions and potentially delay capacity expansion plans by global tech firms in Malaysia, Tan cautioned.

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