A lot of investors choose to remain invested in glovemakers because they expect earnings to be very strong in the coming quarters
by SHAZNI ONG/ pic by MUHD AMIN NAHARUL
NEW clusters of the Covid-19 pandemic in the country and spread abroad keep investors invested in rubber glovemakers which hit new highs as Top Glove Corp Bhd and Supermax Corp Bhd announced bonus issues.
The exchange also reached a new milestone as trading volumes of securities hit a record high of 12.5 billion units worth RM6.6 billion as traders churned penny stocks, while the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 6.88 points to 1,589 points at close after hitting a high of 1,609 and low of 1,580 in intraday trade yesterday.
Prime Minister Tan Sri Muhyiddin Yassin announced the government is mulling the idea of making it compulsory to use face masks in all public places as the Covid-19 threat persists.
Consumer products and services, banking and telecommunication companies stocks such as Nestle (Malaysia) Bhd, Public Bank Bhd and DiGi.Com Bhd were among the top losers that dragged the index down.
Nestle’s shares dipped 1.21% or RM1.70 lower to RM139.30, whereas Pubic Bank dropped 3.5% or 64 sen to RM17.64, while DiGi was down 3.35% or 15 sen to RM4.33.
ACE Market Lambo Group Bhd was the most actively traded with 1.2 billion shares.
Supermax, which saw its share price rise 70 sen to close at a record high of RM18.40 yesterday, proposed a bonus issue of up to 1.36 billion new bonus shares on the basis of one bonus share for every one existing share held on an entitlement date to be determined later.
Similarly, the world’s largest glovemaker Top Glove also proposed a bonus issue of up to 5.48 billion new ordinary shares on the basis of two bonus shares for one existing ordinary share held in Top Glove on an entitlement date to be determined later. Top Glove rose RM1.84 to RM24.82 at close.
Shares of the bourse operator Bursa Malaysia Bhd hit an all-time high of RM9.75. The company is expected to release its financial results for the second quarter ended June 30, 2020, on July 28, 2020.
“A lot of investors chose to remain invested in glovemakers because they expect earnings to be very strong in the coming quarters. Analysts have also been quoting higher price targets for the big counters,” said a trader.
Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the two glove players, Top Glove and Hartalega Holdings Bhd which are constituents of the top 30 FBM KLCI remained as top gainers fuelled by the recent surge in Covid-19 cases worldwide, indicating another phase of infections. He expects trading volumes to remain healthy for the immediate future.
“Retail participation has risen in recent months and with the latest cut in Overnight Policy Rate, more people would want to allocate a portion of their money in equities via trading.
“We believe there is still more room for trading volume to heighten in the near term,” he told The Malaysian Reserve yesterday.
Adam added that Bursa Malaysia has taken the necessary steps to prevent a breakdown in trading that occurred last Thursday.
Bank stocks fell as investors feared a potential slowdown in economic growth if the Covid-19 situation prolongs or worsens including possible movement restrictions imposed again.
Hong Leong Investment Bank Bhd said the market benchmark is likely to witness a choppy pattern this week due to volatility in stocks and markets and heightened US-China geopolitical tensions.
“Key supports are situated at 1,563-1,544, while resistances are pegged at 1,617-1,629 levels,” the firm said.