Glove makers see shares plunge as pandemic fears wane

London – Malaysian glove makers have seen a dramatic fall in share values over the recent months as Covid-19 pandemic peak subsides.

Shares of the world’s number one rubber glove manufacturer Top Glove hit a two-year low on the Kuala Lumpur Stock Exchange (KLSE) on 8 July closing at RMB0.98 – almost 90% down on the RMB9.38 high reached in August 2020.

The drop in share prices, estimated at $16 billion in market value, comes amid concerns over lower average selling price (ASP) for gloves as well as an oversupply caused by recent capacity expansions.

Earlier in June, Top Glove reported third quarter sales of RM1.46 billion (€316 million), down 64% from RM4.16 billion reported last year.

Profit before tax for the three months to end of May fell more than 98% to RMB38 million, down from RMB2.6 billion, the group also reported.

The downward trend is being followed by all of Top Glove’s peers on the Bursa Malaysia since the beginning of the year, when Covid restrictions eased globally.

Hartalega, another major gloves manufacturer, saw it share price dip to a two-year low on 8 July, closing the day at RMB2.65. At the peak of trade in late July 2020, Hartalega shares were valued at RMB20.28.

Tracking a similar trend, Kossan Rubber Industries and Supermax Corp. also saw share values plunge to lowest in over two years at the close of business 8 July.

Supermax shares closed RMB0.82, down from the peak of RMB11.46 on 7 Aug 2020, while Kossan stocks traded at RMB1.29, down 86% from the RMB9.49 peak traded 7 Aug 2020.