Glove maker shares plunge as pandemic fears subside

LONDON—Malaysian glove makers have seen a dramatic fall in share values over the recent months as the COVID-19 pandemic peak subsides.

Shares of the world's No. 1 rubber glove manufacturer Top Glove hit a two-year low on the Kuala Lumpur Stock Exchange (KLSE) on July 8, closing at $0.15 (RMB 0.98)—down almost 90 percent on the $1.39 (RMB 9.38) 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 $328 million (RM 1.46 billion), down 64 percent from $934 million reported last year.

Profit before tax for the three months to end of May fell more than 98 percent to $5.6 million, down from $385 million, the group also reported.

The downward trend is being followed by Top Glove's peers on the Bursa Malaysia since the beginning of the year, when COVID-19 restrictions eased globally.

Hartalega, another major gloves manufacturer, saw its share price dip to a two-year low on July 8, closing the day at $0.39. At the peak of trade in late July 2020, Hartalega shares were valued at $3.00.

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

Supermax shares closed $0.12, down from the peak of $1.70 on Aug. 7, 2020, while Kossan stocks traded at $0.19, down 86 percent from the $1.41 peak traded Aug. 7, 2020.