Eye-popping rally in Asian glove-maker stocks will continue, Citi says

malaysia news lab

SINGAPORE : The astonishing rally in Asian glove-maker stocks will extend further, as the coronavirus-led boom in demand shows no sign of abating, according to Citigroup Inc.

Malaysia’s Top Glove Corp Bhd and Kossan Rubber Industries Bhd can each climb by about 75% over the next 12 months as the pandemic drives unprecedented growth in sales and profits for the sector, Megat Fais, an analyst, wrote in a note on Tuesday.

Glove makers are among the top gainers in a number of global equity indexes this year, outperforming many stay-at-home stocks, gold and even Tesla Inc. Shares of Top Glove, the world’s largest maker, have risen more than 400% this year while those of smaller rival Supermax Corp Bhd have jumped over 1,300%.

The stocks remain highly sensitive to any news about the virus. Top Glove and its Malaysian peers fell about 5%-10% Wednesday after President Vladimir Putin said Russia cleared the world’s first Covid-19 vaccine for use and Moderna Inc reached a deal with the Trump administration to supply its own experimental vaccine to the US.

Citi’s Fais isn’t concerned by such blips, noting that the lead time on orders to Asian glove makers have lengthened to about 12 months from pre-Covid levels of 1-2 months.

“Even with a vaccine, a structural step-up in glove usage is on the cards as the pandemic may well accelerate the narrowing of the gap between emerging-market and developed-market glove consumption,” the analyst wrote.–The Edge

What's your reaction?

In Love
Not Sure

You may also like

Leave a reply

Your email address will not be published. Required fields are marked *

More in:Economics


TPB 2030

Kerajaan amat menitikberatkan pencapaian keseimbangan dan kesaksamaan di kalangan rakyat ⁣ Status sosioekonomi Bumiputera masih ...