Top Glove, Hartalega surge as global demand soars

Shares of Top Glove Corp Bhd and Hartalega Holdings Bhd hit their all-time highs as demand for rubber gloves spikes amid the Covid-19 pandemic.

Top Glove’s share price hit as high as RM6.83, or 5.1 per cent higher, from Monday’s closing of RM6.50.

Hartalega’s share price hit a high of RM7.57, or 1.3 per cent, from RM7.47 on Monday.

At closing yesterday, Top Glove ended 17 sen, or 2.62 per cent higher to RM6.67, while Hartalega settled 0.5 sen, or 0.67 per cent higher to RM7.42.

According to a note by CGS-CIMB, Top Glove’s weekly order had more than doubled (prior to February 2020) due to Covid-19.

The group saw strong orders from Asian countries such as China, Hong Kong, Singapore and South Korea.

Top Glove, said CGS-CIMB, had expected sequentially stronger results from early of third quarter (Q3) 2020 onwards due to sales volume rising 15 per cent to 20 per cent quarter-on-quarter (qoq), due to higher global glove demand as a result of the Covid-19 pandemic.

RHB Research, in a report, said demand for Hartalega’s gloves was much higher than usual, with aorders for the next four months were pretty much secured.

Its analyst Alan Lim said it was not surprising given the extreme shortage of personal protective equipment (PPE) globally.

“As gloves are an essential component of PPE, Hartalega is an important contributor to protect healthcare workers from Covid-19,” he said.

On March 3, the World Health Organisation (WHO) director general Dr Tedros Adhanom Ghebreyesus said the industry must increase glove production by 40 per cent to meet rising global demand to protect healthcare workers from the virus.

He said demand for masks, gloves and other protective gear had risen up to 100-fold and prices had soared due to Covid-19, producing a “severe” disruption in global supply.

He said demand was up to 100 times higher than normal and prices were up to 20 times higher.

The rush had created supply backlogs of four to six months, he added.

Source: NST

Posted on : 14 April 2020