Top Glove Rebounds With Record Surge Defying Analyst Downgrade
Top Glove Rebounds With Record Surge Defying Analyst Downgrade
(Bloomberg) -- The rout in Malaysian glove-maker shares is showing signs of easing after Top Glove Corp. rebounded with its biggest two-day jump on record.
After a four-day drop last week exacerbated by Macquarie Bank Ltd.’s downgrade of the stock, the world’s biggest maker of rubber gloves jumped as much as 13% Monday after a 20% gain on Friday, helped by a 200 million ringgit ($48 million) share buyback. Macquarie had cited concerns earnings may have peaked. Hartalega Holdings Bhd. has rebounded 11% over two days, while Supermax Corp. soared 37% in the same period to snap an eight-day, 45% plunge.
“Concerns on a decline in average selling prices remain unwarranted at this juncture,” said Walter Aw, an analyst at CGS-CIMB Securities Sdn. in a note dated Sept. 11 “Signs are showing that ASPs may stay elevated for a longer period up to the end of 2021. The acute global shortage of gloves is likely to worsen as Covid-19 cases worldwide show no signs of slowing down.”
Buoyed by a surge in demand for their products in the wake of the coronavirus pandemic, Malaysian glove makers almost single-handedly drove a rally in the country’s shares. But the meteoric rise has also led to extreme swings in the market, as worries grow over valuations and the prospects of a coronavirus vaccine that could bring an early end to the pandemic.
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