Glove maker shares slump after new Malaysian curbs at worker dorms, vaccine news

Roughly 15 per cent of Top Glove's total factory workforce will be affected by the two-week curbs. PHOTO: REUTERS

KUALA LUMPUR (REUTERS) - Shares in Top Glove companies tumbled on Tuesday (Nov 17) after Malaysia tightened movement curbs in an area where the group's dormitories are located to enable targeted coronavirus screenings of workers and residents.

Top Glove Corp Bhd in Kuala Lumpur fell as much as 10 per cent and was trading down 55 sen or 7.6 per cent at RM6.65 at 1.45pm. In Singapore, the dual-listed stock lost 22 cents or 9.3 per cent to $2.15.

The world's largest latex-glove maker said it was seeking clarity on the lockdown on worker dorms where Covid-19 cases are rising. It did not respond to an email from Reuters asking whether production would take a hit.

Covid-19 cases in Malaysia have risen sharply since October, with the daily count hitting its highest this month since the pandemic started. The country had a total of 48,520 infections on Monday.

Roughly 15 per cent of Top Glove's total factory workforce, or about 2,500 workers, will be affected by the two-week curbs, analysts said.

The curbs are likely to add to Top Glove's woes after it was hit by an American import ban on two of its subsidiaries earlier this year, though some analysts said the impact was likely not big yet.

"Based on our rough estimate, with 15 per cent of workforce affected by the 14-day quarantine, the impact to Top Glove's bottom line is less than 1 per cent, which is insignificant," AmInvestment Bank analyst Thong Pak Leng said in a research note.

Shares in other Singapore-listed glove makers fell as well, likely affected by news that US vaccine maker Moderna's experimental vaccine is 94.5 per cent effective in preventing Covid-19 based on interim data from a late-stage trial.

Riverstone Holdings dropped 11 cents or 7.6 per cent to $1.34, while UG Healthcare was down 0.55 cents or 7.4 per cent to 68.5 cents.

The news also hit the shares of PPE maker Medtechs International, which sank 11 cents or 11.1 per cent to 88 cents.

With additional information from The Straits Times

Join ST's Telegram channel and get the latest breaking news delivered to you.