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Rubber Glove Makers’ Stock Outpacing Tesla

  • In Southeast Asia, rubber glove makers attract more enthusiasm from investors than even electric cars from Tesla do.
  • It is due to the glove market boom thanks to the coronavirus pandemic, backed by a short-selling ban in Malaysia until the end of the year.
  • The meteoric rise has been unparalleled by Malaysian standards, with this year’s top three glove makers gaining a total market cap of about RM109 billion (US$25.5 billion).
  • Visit The Financial Today’s homepage for more stories.

Kuala Lumpur • A fairly low-tech stock makes the dizzying rally of Tesla look like an underperformance.

In Southeast Asia, rubber glove makers attract more enthusiasm from investors than even the electric cars and flamethrowers from Elon Musk do.

Supermax Corporation has jumped more than 1,000 percent, compared to Tesla’s 259 percent. On the other hand, Top Glove Corporation—dual-listed in Singapore and Malaysia—is up 389 percent this year in Kuala Lumpur, the largest in the MSCI Asia-Pacific Index.

It is due to the glove market boom thanks to the coronavirus pandemic, backed by a short-selling ban in Malaysia until the end of the year.

The meteoric rise has been unparalleled by Malaysian standards, with this year’s top three glove makers gaining a total market cap of about RM109 billion (US$25.5 billion).

More than $1 out of every $10 invested in the nation’s stock market right now is a glove bet—a feat that makes the Southeast Asian nation a global hygiene match, just as South Korea and Taiwan are for semiconductors.

The short-selling ban allowed a marginal contribution to the rally while, Ross Cameron, a fund manager at Northcape Capital said that they, “expect the sector to report significantly more than 100 percent earnings growth next year.”

Fund managers at Northcape and Samsung Asset Management have raised their bets this year on the sector, claiming the change in demand for gloves is systemic and other market participants are still behind the curve.

Still, faster-than-anticipated progress of a COVID-19 vaccine is putting the brakes on the spectacular rally in the shares of glove makers.

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