Glove makers rebound

Latex glove makers, which had been hammered down in recent weeks over recent concerns about over expansion and the stronger ringgit, staged a rebound in the morning session on Monday, Oct 4.

The FBM KLCI rose 8.3 points ti 1,474.62. Turnover was 111.21 million shares valued at RM97.54 million. There were 231 gainers, 70 losers and 114 stocks unchanged.

Top Glove rose 21 sen to RM5.56, Latexx 16 sen to RM2.86, Supermax 15 sen to RM4.18 and Latexx-WA 14 sen to RM2.29.

CIMB Research said on Oct 1 that despite considerable headwinds encountered by the sector this year, demand for rubber gloves continues to grow at a healthy clip.

With continued technological advancement of glove products and facilities, we believe Malaysian rubber glove manufacturers will maintain its leadership in the global market.

“In light of the positive long term prospects of the industry, we maintain our OVERWEIGHT call. All the glove stocks under our coverage remain as Outperforms.

“Potential re-rating catalysts include the continuing uptick in demand from the healthcare industry, ongoing capacity expansion and strong earnings growth. The recent sharp pullback in share prices has made the sector even more attractive with undemanding average P/Es of 7-8x. Supermax and Latexx remain our top picks,” it said. - by Joseph Chin