Extended rubber glove selldown

Positive developments surrounding the vaccine for the coronavirus (Covid-19) and the commitment by the United States to fast-track the experimental vaccine before the presidential polls sent rubber glove counters in Malaysia tumbling.

All the seven glove makers listed on Bursa Malaysia tanked on the extended selldown yesterday, which wiped out RM15.55bil of their market capitalisation as investors shifted their interest towards pharmaceutical-related stocks.Top Glove Corp Bhd and Hartalega Holdings Bhd were among the two largest casualties yesterday, after shaving off RM2.50 and RM1 to close at RM25.40 and RM16.50, respectively.

The two glove makers were also the main heavyweights dragging down the FBM KLCI yesterday, which closed 13.62 points or 0.87% lower at 1,554.96 points despite seeing 15 gainers against nine losers in the 30-stock index.

The benchmark index has been more sensitive towards the share price movements of Top Glove and Hartalega due to their high valuations.

Fortress Capital Asset Management chief executive officer Thomas Yong said while they believe that the glove sector will enjoy an extended period of new-normal demand for disposal glove usage, a potentially earlier than expected development of widely available vaccines would certainly dampen investor exuberance in the already great run in the sector’s stock prices.

The Financial Times reported yesterday that an option being considered by the Trump administration to speed up availability of the vaccine through an “emergency use authorisation” by the US Food and Drug Administration in October to a vaccine being developed by Oxford University and AstraZeneca.This led to a domination of pharmaceutical-related counters on Bursa Malaysia yesterday. All of them were in the positive region, led by top gainers Pharmaniaga Bhd, which jumped 69 sen or 13.09% to RM5.96 and Duopharma Biotech Bhd, which closed 34 sen or 10.06% higher at RM3.72.

Science, Technology and Innovation Minister Khairy Jamaluddin said last month that the government had agreed that the facilities of the two companies be used for the bottling of the vaccine.

Penny stock Bintai Kinden Corp Bhd was the second most active counter yesterday with a volume of 515.16 million shares, adding 30 sen or 74.07% to 70.5 sen.

The engineering services provider, which has been loss-making over the past three quarters up to March 2020, had on Aug 17 announced that it had entered into a memorandum of understanding (MoU) with Nugenerex Immuno-Oncology, a US-based vaccine research firm for the funding, launching and management of a synthetic peptide vaccine for Covid-19.

Solution Group Bhd was the third most heavily traded counter yesterday and almost hit limit up after it rose 18.5 sen or 29.37% to 81.5 sen. The technology investment company stated on its website that it had subsidiaries involved in two core activities - engineering and biopharma and healthcare.

Like Bintai Kinden, it entered into an MoU with Chinese vaccine company CanSino Biologics on the potential vaccine co-developed by it on Aug 3. A fortnight later, Solution incorporated a new wholly owned subsidiary – Solution Biologics Sdn Bhd – of which its intended principal activities are the establishment of a vaccine fill and finish facility, marketing and distribution of any type of biological drugs.

Across Bursa Malaysia, market breadth was negative, with losers outnumbering gainers 843 to 323, while 344 counters closed unchanged. Trading volume stood at 10.22 billion shares, valued at RM7.63bil.

The technology sector was the worst hit after the Technology Index lost 1.23 points to 55.71 points as most counters were in the red. KESM Industries Bhd shed 39 sen to RM8.53, Mi Technovation erased 24 sen to RM4.24 while Notion VTEC Bhd dropped 21 sen to RM1.12.

The FBM KLCI was the worst performer in the region yesterday, as compared to the other laggards being Thailand’s SET Index that declined 0.09% and Hong Kong’s Hang Seng Index, which dipped 0.26%. South Korea’s Kospi rose 1.58%, followed by Japan’s Nikkei 225 at 1.35%, the Jakarta Composite Index at 1.17% and Singapore’s STI at 0.8%.