KUALA LUMPUR, Oct 8 (Bernama) -- Rubber glove stocks rose in early trade on Wednesday, driven by a positive sector outlook, Kenanga Investment Bank Bhd said, amid ongoing US-China geopolitical tensions.
At 10.34 am, Top Glove and Hartalega gained one sen each to 58 sen and RM1.10, with 6.59 million and 2.23 million shares traded, respectively, while Kossan Rubber added two sen to RM1.15 on one million shares.
The investment bank said the current US-China tensions, which could lead to trade restrictions and tariffs, make American buyers less likely to source supplies, including gloves, from China.
“We expect a 25 per cent tariff to lift Malaysian gloves' average selling price (ASP) from US$19–US$20 per 1,000 pieces to US$23.75–US$25 per 1,000 pieces (US$1 = RM4.21).
“In comparison, a combined 50 per cent plus 30 per cent tariff on Chinese gloves is expected to raise Chinese producers’ ASP to US$27–US$28.8 per 1,000 pieces, making Malaysian gloves around 12 per cent cheaper,” it said in a note today.
The bank added that Malaysian glove makers’ stock prices are likely to re-rate once concerns over ASP subside and demand shifts back to Malaysia.
“Accordingly, we maintain an ‘overweight’ call on the sector,” it said.
-- BERNAMA
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