Top KLCI gainers add RM108b to market cap

11 of the top 30 companies under FBM KLCI saw their market cap increase YTD, with glove manufacturers registering the highest jump

by NUR HANANI AZMAN / Pic by MUHD AMIN NAHARUL

SHARES of top performers on Bursa Malaysia added RM108.86 billion in combined market valuation over the past 12 months, despite the broad challenges brought about by the Covid-19 pandemic.

Data compiled by Bloomberg showed 11 of the top 30 companies under the FTSE Bursa Malaysia KLCI (FBM KLCI) saw their market capitalisation (cap) increase year-to-date (YTD), with glove manufacturers registering the highest jump in valuation.

Top Glove Corp Bhd’s share price rose 76.9% or RM5.18 YTD to RM6.73 at close yesterday, adding RM41.75 billion to its market cap as the resurgence in Covid-19 cases continues to fuel global demand for rubber gloves.

Trailing behind is Hartalega Holdings Bhd, with a share price increase of 137.8% or RM7.37 YTD to RM12.72 at close yesterday, bringing its market valuation to RM25.13 billion.

Supermax Corp Bhd also added RM16.72 billion to its market cap over the same 12-month period, with its share price rising by 936.8% or RM6.37 YTD to close at RM6.92 yesterday.

Other major gainers are Press Metal Aluminium Holdings Bhd, which saw its market cap increase to RM12.36 billion on higher steel prices, and Telekom Malaysia Bhd added RM5.54 billion to its valuation, driven by a shift towards working from home amid the pandemic.

The benchmark index also saw RM97.58 billion erased from 18 companies — mainly in the plantation, telecommunications and banking sectors.

IOI Corp Bhd led the decline, with its share price falling by 5.6% or 26 sen YTD to RM4.39, which cancelled RM24.83 billion from its valuation.

Tenaga Nasional Bhd also saw its shares trade lower at RM10.68, down 19.7% or RM2.62 YTD, wiping off RM15.28 billion from its market cap.

CIMB Group Holdings Bhd, MISC Bhd and Genting Bhd also saw their market valuation decline by RM26.55 billion in total. Sime Darby Bhd is the only stock trading flat on a YTD basis.

In a recent research note, Maybank Investment Bank Bhd stated it expects the FBM KLCI to see a sharp recovery in earnings in 2021 after three straight years of earnings contraction.

The research house has recommended a mix of value and growth picks for the upcoming year with a continuing yield focus.

“Our end-2021 KLCI target is 1,830 points. Pullbacks in growth stocks such as gloves and technology are an opportunity to re-enter, while value stock picks are guided by cashflow visibility and strong balance sheets.

“We are selective on telecommunications companies, property, real estate investment trust and consumer. We are ‘Underweight’ on aviation,” it said in a note.

Singapore-based DZT Research Private Ltd believes Top Glove will remain a value stock as gloves will continue to be in high demand from the healthcare sector despite progress made on vaccines.

DZT Research has revised Top Glove’s financial year 2021 estimated earnings per share up by 28% due to the high average selling price (ASP) from December 2020 to May 2021, in a recent research note.

“We expect longer visibility of the ASP trend due to excess lead time and demand in the market, and Top Glove’s abilities to ramp up production capacities among the factors,” the research firm stated.