KUALA LUMPUR (July 19): Bursa Malaysia said on Tuesday (July 19) the net outflow from the bourse's Health Care sector almost doubled to RM291 million in June 2022 from RM158 million a month earlier as the disposal of rubber glove manufacturers' shares by local institutional investors gained momentum.

"Local institutions increased their momentum in disposing [of] glove stocks. Outflow from (Bursa's) Health Care sector almost doubled to RM291 million in June (2022) from RM158 million a month earlier.

"Three out of five of the top net selling stocks were glove counters, with a combined outflow of RM357 million," analysts from Bursa's research arm Bursa Digital Research wrote in a note.

The Malaysian rubber glove sector is closely watched as a beneficiary of the Covid-19 outbreak which started in early 2020, as demand for rubber gloves, seen as a crucial piece of personal protective equipment, jumped to curb the global spread of Covid-19.

Covid-19-driven demand for gloves is, however, now seen normalising as global vaccination progress leads to anticipation that the Covid-19 outbreak can be curbed.

Such sentiment is already reflected in share prices of major glove manufacturers — Top Glove Corp Bhd, Hartalega Holdings Bhd, Supermax Corp Bhd and Kossan Rubber Industries Bhd.

Shares prices of Top Glove, Hartalega, Supermax and Kossan, which have been adjusted for their respective bonus share issues, have fallen sharply to current levels from levels seen during the critical phase of the Covid-19 outbreak.

On Aug 21, 2020, Top Glove closed at RM9.33, Hartalega finished at RM17.74, Supermax ended at RM10.95 and Kossan settled at RM8.20.

On Tuesday (July 19, 2022), Top Glove's share price closed down two sen or 1.92% at RM1.02, Hartalega rose five sen or 1.85% to RM2.75, Kossan fell one sen or 0.78% to RM1.28 while Supermax ended unchanged at 81.5 sen.

CGS-CIMB Securities Sdn Bhd analyst Ivy Ng Lee Fang wrote in a note on Tuesday that CIMB Group Holdings Bhd, Top Glove and Supermax were the top three short-selling targets in terms of trading value on Bursa last week (July 11 to 15).

"The total trading value of short-selling fell 30.2% wow (week-on-week) to RM77.3 million.

"The top three short-sell sectors in terms of value were financial services, technology and healthcare," Ng said.

In securities trading terminology, short selling involves the sale of borrowed securities at higher prices by the borrower, in anticipation that prices of the securities will fall.

The borrower will subsequently buy back the securities at a lower price to make a profit, based on the prices the securities were sold and bought back.

Top Glove and Hartalega are also constituents of the 30-stock FBM KLCI, which had on Tuesday closed down 0.78 point or 0.05% at 1,428.76.

For the July 11 to 15, 2022 trading week, Ng said the KLCI's average weekly trading value fell 7% week-on-week to RM1.26 billion — its lowest since the trading week ended Dec 28, 2019.

"The worst-performing sectors last week were energy, industrial and technology.

"[Based on the KLCI's closing prices,] KLCI fell 0.5% wow due to foreign labour woes and China’s weak 2Q GDP growth," she said.

Across Bursa during the July 11 to 15, 2022 trading week, Ng said local institutional investors became the largest net sellers of local equities after five weeks of being net buyers.

"They were net sellers of RM62 million worth of equities last week vs. net buyers of RM40 million two weeks ago.

"Local institutions were net sellers of [shares in] the financial services and healthcare sectors; their top three net sell stocks were CIMB, FGV Holdings Bhd and Malayan Banking Bhd," she said.