Glove mania drives record volumes on Bursa
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A meteoric rally in the shares of rubber-glove makers has helped Malaysia's stock exchange jump 59 per cent this year, eclipsing even the 43 per cent gain by Hong Kong Exchanges and Clearing. More than $1 of every $10 invested in Malaysia's stock market now is a bet on gloves amid the pandemic.
PHOTO: REUTERS
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KUALA LUMPUR • Amateur traders and a spectacular rally in rubber-glove stocks are driving record volumes on Malaysia's stock exchange, helping the bourse operator outperform its major global peers this year.
Bursa Malaysia has jumped 59 per cent this year, eclipsing the 43 per cent gain by Hong Kong Exchanges and Clearing - the world's biggest exchange by market value - even as the latter surged 10 per cent on Tuesday, after billionaire Jack Ma's Ant Group announced plans to seek a dual listing in Hong Kong and Shanghai.
Shares of the Malaysian exchange rose 0.9 per cent to close at RM9.80.
Similar to the trend in many other countries, individual investors have piled into the South-east Asian stock market to scoop up battered shares in the wake of the coronavirus pandemic, spurred by government stimulus and record-low interest rates.
An unprecedented rally in glove-maker shares also fuelled the fevered buying, sending overall trading volumes to a record 12.5 billion shares on Monday.
"Retail participation continues to chalk up new highs, and their net buying momentum hasn't diminished," said Mr Jeremy Goh, an analyst at Hong Leong Investment Bank, in a recent note.
The exchange will deliver a record profit of RM80 million (S$26 million) in the second quarter, Mr Goh said, adding that average daily trading value has jumped 86 per cent in that period.
A big part of the trading frenzy in Malaysia has been helped by the meteoric rally in the shares of glove makers.
More than $1 of every $10 invested in the nation's stock market now is a bet on gloves, due to the supernormal demand for hygiene products during the pandemic.
That has, in a way, shielded the exchange's shares from the volatility seen in equity markets globally and at home this year.
While liquidity can evaporate as fast as it came, Mr Goh said there are encouraging signs it may be sustained for the rest of the year.
He has raised his earnings estimates for Bursa Malaysia for this year by 10 per cent ahead of the company's results due late this month, and expects the bourse to report a record quarterly profit.
BLOOMBERG
