CHONG Kong Hui, thank you for your comment.

That's not necessarily going to be the case, although the downward pressure is likely to subside.

CCCL, oh sorry I might have misunderstood your comment. Yes, free float certainly results in higher volatility. This might be one of the reasons why Bursa is considering lowering the public shareholding requirement: https://www.theedgemarkets.com/article/bursa-consider-application-lower-public-shareholding-spread-15

CCCL, kelvin5349, thank you for your comments.

CCCL, I would say the problem is a lot more basic. The Malaysian market by design encourages short-term gambling-like behaviour due to small number of market participants, imperfect information availability, low public financial literacy, and lack of any tax on capital gains or dividends. The difference between now and the situation at other times is that since last year liquidity has been available more readily to a larger number of retailers due to cash handouts, low interest rates, and a limited number of options on disposable income allocation (for instance, people couldn't go on holiday abroad).

kelvin5349, we are running quite off-topic here, but thank you for letting me know about the basics of investment. I am yet to read about Warren Buffett using charts, let alone chartists' advice.

Zachzach, thank you for your comment. I don't see glove companies declaring bankruptcy, so I believe the answer is clear.

arv18, this sort of baseless insinuation is an ugly display of a low and sad individual. I will be disengaging hereafter.

arv18, I am happy to see your interest in myself runs deep, but my portfolio management runs a bit too far from the topic of this blog post.

arv18, I am glad to hear you have an image of myself built in your mind. I hope it helps.

goldenluck16, BeLikeBuffett, thank you for your comments.

BeLikeBuffett, indeed it appears that this is what JPM (or whoever else the short seller is) have been looking at. Interestingly though, they started covering their shorts quite urgently the last couple of weeks at a significant loss. It is possible they might have gotten some of the shares recalled by the borrowers, it is also possible that they have not been expecting this deep sell-off either.

arv18, herein lies the difference between our understanding of what investments represent. My goal when buying part of a business is not to find a bigger fool who would pay more for the same piece of the business. This is what traders/speculators try to do.

While I appreciate your well thoughts, "hoping" and "an uncle said something last week" are not, and must never be, a part of the process of investing. They are usually what you would do when you play mahjong over CNY or when you try your luck in Genting.

arv18, I humbly disagree. You seem to not understand where I am coming from.

Based on business prospects, a wise (to use your term) entry price on certain stocks I have written about, occurred during the period I mentioned. Extra market price manipulation, such as enormous short positions (biggest in the history of Bursa by value) or mispricing of derivative products, are neither something that can be predicted, nor something that has any relevance to the prospects of the business. I hope this explains things better.

arv18, thank you for your comment.

It seems like we have very different understanding of what investment means. Which is perfectly fine of course - different people have different understanding of things.

It appears that your asset allocation plan is a lot closer to what I would call trading/speculating rather than investing. As mentioned, this is fine and it appears that this is something many active participants in the Malaysian stock market (especially nowadays) consider a viable strategy.

From my perspective the market price is the last thing I look at once I have verified that the prospects of a business are good/great. If I am late, or if for some other reason I estimate that based on the business prospects the market price is too expensive, I won't invest. On the other hand, if I believe the market price is justified based on the business prospects, I am happy to buy a part of that business at the offered price. In my analysis, certain companies I have written a few times in the last few months about, became attractively priced around late November/early December last year, based on their business prospects.

In a properly functioning market, there won't be significant discrepancies between the true value of a company and its market price. An investor would be happy to find a bargain at 15-20% discount. The case is very different here, hence my quick post.

linheng, thank you for your comment.

"Proprietary" refers to Proprietary Trading Investment (IVT) traders. These are predominantly local institutions as far as I know.

Mtrade, FCTITAN, thank you for your comments.

FCTITAN, I doubt they have left. I think everybody is just speechless and dumbstruck right now. The current market prices of the Malaysian glovemakers literally make no sense. For comparison, Intco's and Sri Trang's prices have both doubled over the last 4 months.

https://klse.i3investor.com/blogs/bursainvestments/2021-02-25-story-h1541261214-Supermax_Quick_Data_Checks.jsp

It's shocking how misinformed some people are.

At the current rate of 6.44 million doses administered per day (based on the quoted Bloomberg article), vaccinating 60% of the world population (4.6 billion people) with two doses of the vaccine (a total of 9.2 billion doses) will take 1430 days, or almost 4 years.

Hi observatory, thank you once again for your detailed notes.

Just to make it perfectly clear - I am certain the world will find a way to go through the crisis, there is no two opinions about it. Israel, and of course other countries, will find a way to push through and vaccinate as many people as possible, even if that might require certain heavy-handed tactics to be employed.

However, it seems like a difference in our opinions lies in our estimation of how bad the economies of the world will look like once the major phase of the crisis is over. My firm opinion is that the world economy was in decline at least since late 2018, and it was due for a recession in 2020 anyhow. When the pandemic hit, it further scarred the world economy and left no choice to governments around the world but to take on record levels of extra debt while using every available tool to pour liquidity. There is very little (if any) further space for interest rate cuts, which currently stay at historically record low levels. Velocity of money, which as of 2017 was already at record low level (1.45, at historical average around 1.7) since we've had data on the metric, is now at the stagnation (if not complete halt) level of 1.1, with almost no difference between the level at Q2 2020 and Q4 2020. Additionally, at least since the Global Financial Crisis, the governments of the major countries had to take on record levels of extra debt to fuel further GDP growth (i.e. the public debt growth to GDP growth ratio was at its historical record low before 2020).

All of this means that most governments of the world did not have the sustainable capacity to bridge the gap between the beginning and the eventual end of the pandemic, but they were forced to do it. So I am strongly pessimistic on how quickly the economies of the world will return to the right path, even as they undoubtedly will learn to live with the virus.

Another difference in opinions seems to exist in regards with the danger of the virus turning endemic, similarly to the flu and other coronaviruses throughout human history. You seem to be of the opinion that this will generally be fine. In the long run (3+ years from now), I agree. Unfortunately COVID-19 is, at least at present, a pathogen a lot more dangerous than the common flu the world experiences every year. The reason why things won't be as good as with the Spanish Flu scenario hides in the speed with which COVID-19 mutates, which is approximately 4 times slower than the flu. This makes it harder for a variant of the virus to establish itself, which is less lethal or less damaging to the host (humans). It will take longer than with the flu before this happens.

Regarding the technicalities of measuring how far each country is in its vaccination campaign, the most accurate way to report on that is to find out how many people have been inoculated with one dose, and how many with two doses. If you view it from a healthcare system point of view (as you seem to be doing), the one dose stats itself is more important. However, if you view it from an economic and general vaccination campaign completion point of view (as I am viewing it), you will have to calculate how many doses have been administered, out of the total number of doses that will have to be administered before the campaign is completed. I like to measure it this way, because it is a lot more conservative and it gives us the opportunity to more accurately estimate how fast the vaccination campaign is going and when the vaccination campaign will actually be completed.

Jimmy07, jasonred79, iswara, thank you for your comments.

jasonred79, as explained in the article, the demand estimates are not mine. They come from two independent researches - Margma (2021) and Frost & Sullivan (2020). Both of them are linked to in my article.

zzzz52, Flying Fox, thank you for your comments.

Flying Fox, the mechanics of the business with surgical masks and the business with rubber gloves are thoroughly different. The process of mask production is simple and inexpensive, there are even people buying mask production machines and doing it in their garages. The business with rubber gloves requires an established network of suppliers with specialized technical know-how and it is specifically constraint due to raw material unavailability. It is no coincidence that masks are not on FDA's medical device shortages list, whereas gloves (including nitrile, latex, and vinyl gloves) are on top of the list with a designation on the estimated shortage duration reading: "estimated for duration of the COVID-19 Public Health Emergency."

https://www.fda.gov/medical-devices/coronavirus-covid-19-and-medical-devices/medical-device-shortages-during-covid-19-public-health-emergency

Honesty, it would appear from your activity that you are particularly interested in the business of glove companies. Yet, time and again you show lack of even basic understanding of the business.

To answer your latest question - Sri Trang is responsible for approximately 10% of the global supply of rubber (nitrile + latex) gloves (they are a supplier, not a "demander"). They are the fourth largest producer in the world.

Hi observatory, thank you once again for your detailed response.

My preferred strategy for Malaysia is that cases are reduced by a meaningful amount before any relaxation of the SOPs is imposed. Unfortunately, from a practical point of view it is impossible for Malaysia to reduce the cases to zero, the way China or Australia are doing it. However, finding as many clusters as possible during these movement control order episodes is imperative, so from this point of view the increase in testing by almost 3 times over the past 6 weeks is commendable. Extra budget must be (or rather - must have been) allocated for this task, because the corresponding economic damage from prolonged movement control restrictions far outweighs any costs for extra testing.

In terms of the vaccination program, I actually believe Malaysia has done surprisingly well. I don't necessarily agree that paying a significantly higher premium for getting a few batches of vaccines 1 or 2 months earlier would have changed much. For instance, Singapore has apparently paid 5 times more per vaccine on average than Malaysia. However, they have only administered 4.38 doses per 100 people so far, or the equivalent of 2.2% of the population (if we assume 100% coverage). Malaysia has managed to secure a diverse range of vaccines from different providers, which is imperative having in mind the geographic diversity of Malaysia. Again, setting up this program in a place like Singapore is an infinitely less complicated task than doing it in Malaysia.

Unfortunately, the official figures for the countries that are leading the pack in vaccinations - Israel, the UK, and the US (and the UAE by the way), are quite a lot less encouraging. Israel, the world leader, has administered 82.4 doses per 100 people as of yesterday. This translates into 41.2% coverage. The corresponding figures for the UK and the US are 25.73 doses per 100 (12.86% coverage) and 17.82 doses per 100 (8.91% coverage), approximately 2 months and a half into the campaign.

But back to Israel, they are right now facing a problem I wrote about in the beginning of December - vaccine hesitancy. After a very promising start, and a peak around the end of January and the beginning of February when on average 2.1 doses per 100 people were administered per day, the country saw a sharp decline to 1.1-1.4 doses administered per day, and they are now facing the part everyone has been reluctant to talk about. Once you vaccinate everyone willing out of the adult population, you are still left with a significant group of unwilling people (in some cases this group is over 50% of the adult population - in Russia, France, Poland, for instance), and you are left with the children. So from hereon after Israel has a couple of major issues to resolve:

A) How to "force" the unwilling population to vaccinate.

B) What to do with the children.

The unavailability of a resolution to these two problems at present means that COVID-19 will, unfortunately, not be eradicated. At the same time it poses extra risks. When vaccinated population mixes up with unvaccinated population in an environment where herd immunity (~60-70% for the "old" variant, ~80% for the UK variant and other more contagious variants), the virus is given more opportunities to adopt mutations that escape the immune response generated from the vaccines. This is where a major risk lies right now, and that is why it is much more likely that we will have to have yearly COVID-19 vaccination campaigns than the opposite.

Overall, the vaccination campaign will result in a significant decrease in deaths eventually as it will prevent severe illness (in most cases), which is great because it will allow for a certain reopening of the economies. However, it will not result in a return to 2019 level of normal any time in the next few years, unless miraculously a cure is discovered. International travel will remain complicated, and will likely only be based on bilateral travel bubbles, mass gatherings will be restricted, and I expect that the continent of Africa will eventually become isolated in terms of travel. The virus can mutate more easily in immunocompromised individuals, such as HIV-positive individuals. This is likely the main reason why the South African variant has developed specifically in South Africa where approximately 20% of the population lives with HIV. The fight will be long and arduous, sadly.

Hi observatory, thank you very much for your comment and thoughts.

The goal of my article wasn't really to discuss the government response in detail. In fact, I tried to avoid that topic in the article as much as possible, so I didn't elaborate on the Sabah elections or on December's interstate travel ban lifting. Overall, my goal was to demonstrate that lifting the restrictions right now is most likely not a good idea and that it will result in deeper problems soon. Additionally, it was my goal to show that, unfortunately, things have not been improving ever since the end of September, albeit all the imposed restrictions. This makes me quite concerned about the situation in Malaysia, and in my view the near-term prospects for the economy as a whole are bleak.

Regarding your points, I agree with all of them. There have been significant shortcomings in the way the government reacted to certain situations, but unfortunately without knowing all the facts that might have been taken into account, it may be hard to judge. Comparing the situation in Malaysia to that elsewhere in the world, we can clearly see that Malaysia is even now still doing better than most other places. A few countries, such as Singapore, Brunei, Taiwan, Mongolia, New Zealand, and Australia, are certainly doing better, but they have significant advantages over Malaysia - in particular remote location, and/or small enough size, and/or are thinly populated. Another, smaller group of countries, including China and Vietnam, is doing better as well, but they have the "advantage" of being totalitarian states. Malaysia's major strategic disadvantages in this case have been its proximity to populous countries, such as Indonesia, The Philippines, and Bangladesh, where the pandemic has not been contained, and its large population of illegal immigrants. This is not something the government could have resolved easily.

In this sense, while in retrospect some decisions turned out to be wrong (such as not quarantining people traveling to Peninsular Malaysia back from Sabah in September, for instance), the overall response has been significantly better than average, especially bearing in mind how complicated a political situation the government has been operating in.

But again, the goal of this article was not really to do an overview on the political response, but rather to express an opinion on the situation we are dealing with right now.

https://klse.i3investor.com/blogs/bursainvestments/2021-02-20-story-h1541108287-Is_Travel_and_SOP_Easing_Now_a_Good_Move.jsp

https://klse.i3investor.com/blogs/bursainvestments/2021-02-20-story-h1541108287-Is_Travel_and_SOP_Easing_Now_a_Good_Move.jsp

https://klse.i3investor.com/blogs/bursainvestments/2021-02-20-story-h1541108287-Is_Travel_and_SOP_Easing_Now_a_Good_Move.jsp

https://klse.i3investor.com/blogs/bursainvestments/2021-02-20-story-h1541108287-Is_Travel_and_SOP_Easing_Now_a_Good_Move.jsp

https://klse.i3investor.com/blogs/bursainvestments/2021-02-20-story-h1541108287-Is_Travel_and_SOP_Easing_Now_a_Good_Move.jsp

https://klse.i3investor.com/blogs/bursainvestments/2021-02-20-story-h1541108287-Is_Travel_and_SOP_Easing_Now_a_Good_Move.jsp

https://klse.i3investor.com/blogs/bursainvestments/2021-02-20-story-h1541108287-Is_Travel_and_SOP_Easing_Now_a_Good_Move.jsp

Bao2lai, cpchuan, Flying Fox, thank you for your comments.

@Bao2lai, I believe some of observatory's comments might be getting misunderstood. He is not specifically optimistic on Intco's future, in fact he thinks (and I agree with that) that Intco might spoil the market for everyone, including for themselves. Intco doesn't have a clear strategy other than trying to grab as much of the market share as quickly as possible, which might lead to a run to the bottom for everyone. In this sense, they are likely the most major threat to the glove industry as a whole, specifically in the mid term.

@cpchuan, yes, this was slightly unexpected for me. In their announcement from a couple of days ago, they did not mention anything particularly unexpected. However, it seems like the market has reacted on the news of them tripling their capacity by 2026 - something which was announced with their last quarterly report in November 2020. I guess as this is a full year report, it has gotten a lot more attention.

@Flying Fox, my expectation is that specifically the newcomers will be unable to survive. Additionally, I am not too optimistic on the prospects of some of the smaller listed companies, whose share price rose in tandem with the share price of the major players.

AdCool, bullpiano, hylees, Protectcap, AzerothJr, CharlesT, Winner88, LossAversion, lkoky, thank you for your comments.

@AdCool, the short seller has to continually suppress the prices until they successfully exit their positions. For instance, currently they are suppressing Supermax as much as possible, because this is one way in which they may recuperate some of the losses incurred on Top Glove and Harta. Supermax's shareholder base comprises of retailers to a much larger extent than how it is for any of the other major glove companies, so suppressing the price is easier as long as they are able to find the necessary amount of shares to short.

@hylees, yes, I found the same information. I hope people will inquire with Bursa and with SC for a confirmation on if this practice is indeed disallowed.

@Protectcap, yes, I hope more people will inquire about this with Bursa. Extra transparency has never hurt anyone, except for anyone doing shady deeds, of course.

@AzerothJr, the reasons for market price fluctuations of a company's shares are a myriad. The goal here is not to explain all of them.

@CharlesT, your first statement is true - eventually the ASPs will go down, and if you have read my other posts, you would know that I believe that is a rather healthy thing to happen. In any case, your comments are not related to this post.

@lkoly, yes, the skill of the short seller is incredible in buying (according to Bursa - in open market transactions) huge amounts of shares without that resulting in a corresponding market price increase.

pxxluo, thank you for your comment.

I reviewed Sri Trang's latest financial statement (from a couple of days ago), you can find it here: https://links.sgx.com/FileOpen/MDA%20STA%20FY20_EN_Online.ashx?App=Announcement&FileID=648459 (on page 7).

Interestingly, they have actually cut down (slightly) their expansion plan. You can see their expansion plan they announced with the previous quarter results release in November here: http://stgt.listedcompany.com/misc/mdna/20201116-stgt-mdna-3q2020-en-02.pdf (on page 3).

BeLikeBuffett, cherry88, mikeazk, Citadel00, Thepolicia, AdCool, Peter5151, thank you for your comments.

mikeazk, the conclusion is that most likely what Bursa is saying is false, i.e. the chance of it being false based on simple math is a lot higher than it being true. Bursa might be misled by the short seller though, we do not know. It would be great for them to check thoroughly on that of course.

AdCool, the short seller is most certainly losing money, no matter at what price or how they have covered their shorts. Their average shorted price is 5.80 as of yesterday, so if there is any question it would be how much money they have lost.

bullpiano, JuzzyOracle, thank you for your comments.

bullpiano, I was unable to find information that would confirm if off-market covering of previously opened short positions is allowed on Bursa. However, simple logic would dictate that this practice is not allowed. The reason more transparency is brought to the short selling practices in general is so that investors can make informed decisions based on the existing open market positions on a stock. Thus, if a short position has been opened via open market activity, it should be required to be closed via open market actions, too.

JuzzyOracle, unfortunately in cases like this there is hardly anything retailers could do to prepare themselves in advance. The only thing that could help is if retailers make sure both the relevant authorities (in this case SC) and the media hear about suspicious looking cases, so that they hopefully investigate further.

observatory and super_newbie, thank you very much for your detailed comments.

observatory, we are running into something we've touched on during some of our private chats, and which I wouldn't necessarily want to discuss publicly as it involves investment strategy. To be sure - I agree that ASPs falling faster than they are projected to fall will have a beneficial long-term effect on all players except for Intco. I have no doubt in China's capability of spoiling a market, specifically from a short run point of view, so I am observing with interest Intco's moves.

On the geopolitics of China's exports and the macroeconomics of the sector, any possible long-term sustainable prospects for Intco would have to (likely inevitably) involve a focus switch of their exports to developing countries. And at the same time, as we have discussed, while Intco is able to run on a very impressive operating margin right now, this is unlikely to sustain as their current major advantage (government incentives at start-up) doesn't provide them with long-term cost benefits, while at the same time the pre-existing disadvantages of the China producers remain. In other words, their prospects are bleak - both in the mid term where the bulk of their extra capacity will likely only come on board as ASPs start falling (and in fact it will be a cause of the fall), and in the long term when economically they are much more likely to crumble than to succeed. In this sense, I believe that once ASPs start falling, Intco will experience severe difficulties in finding the needed capital for further expansion relatively quickly. Again, I will be observing the unfolding of the situation with great interest.

super_newbie, the usability of vinyl gloves is significantly lower than that of nitrile and latex gloves. Additionally, there are serious concerns over their safety in food handling industries (where they are mainly used), as well as on their environmental impact. Thus, they are unlikely to ever become widely used in the developed countries, and they are likely to have niche, likely diminishing over time, usage in developing countries. So yes - the main reason for the rise in their imports is most certainly related to the shortage of the superior nitrile and latex gloves. This is truly a one-off event, so I don't think it's worth it for ASEAN manufacturers to invest heavily in this niche.

lkoky and Seek, thank you for your comments.

I will probably write a completely separate post on this, but yes - a number of things don't add up. There is no immediately obvious logic in the short seller returning the shares all at once, as they continue to incur borrowing fees when they hold the shares.

Additionally, the explanation of several days of trading doesn't hold water. I will explain in a separate post why.

Here is something that was recently posted elsewhere: https://imgur.com/pgXMgOU

cpchuan, Michael Teng, thank you for your comments.

Yes, on Monday the short seller has covered some significant short positions:

- 17,680,000 on Top Glove
- 3,000,000 on Hartalega
- 644,000 on Kossan

The Top Glove and Hartalega closing has most certainly been done off-market. This is not a level playing field, and it would definitely be great if Bursa is checked on that. Please feel free to share this article with Bursa if you write to them. I will update the post to reflect the latest changes.

sikusiku, thank you for your comment.

Regarding utilization rates, I purposefully left two assumptions in the final findings - at 100% utilization and at 80% utilization. Additionally, I added references so that it is easier for people to see how industry experts might assume the utilization rates will be moving. I didn't want to arbitrarily make my own assumptions, i.e. I didn't want to say things like "utilization rates in 2021 will be 95%, but in 2022 they will fall to 85%" or something like this, although this is a likely scenario.

Hi observatory,

Thank you once again for sharing your thoughts.

First, on the issue of extra supply. To be sure, ASPs will most certainly fall. This is inevitable and this will be a result of the supply starting to catch up with demand eventually. However, as mentioned above, extra supply serves as a self-fulfilling prophecy of sorts, destroying its own economic value. Intco's market valuation assumes a lot higher ASPs for longer time than the valuations of the Malaysian listed glove companies do. Thus, churning out seemingly infinite extra production wouldn't serve Intco any particular good (and in fact, it may serve it more bad than it would for other glove companies). In other words, the risk of oversupply or even the risk of supply catching up with demand too soon, may be significantly higher for Intco than for other players. So as we have discussed before, I believe extra production expectations will continue to get adjusted based on demand expectations. It is widely believed that while ASPs will gradually fall, they will eventually settle at levels somewhat higher than the levels from pre-pandemic times as the catching up with demand will be happening at a faster pace (i.e. demand growth will be faster than pre-pandemic).

On geopolitics, I don't think it will be as easy for Intco to switch away from the US market. Top Glove was able to make the switch without it impacting the company in any major way, because of two main reasons:

1) It has a significantly more diversified customer portfolio than any other player in the world (far more diversified than Intco);

2) The ban happened amid conditions in which demand everywhere in the world far outstripped supply.

These are the reasons why I have jokingly mentioned elsewhere that the timing of all of the turmoil around Top Glove's business practices is actually good. The company has both the cash to resolve the problems, and it has the capacity based on the current economics of the market, to not be affected financially in a significant way.

Intco relies heavily on the US market for its exports, and from my checks the US is not a fraction of its exports, but rather by far its largest exposure. Any consideration the US could give to imposing ban on China imports, or to imposing heavy import tariffs for instance, can only happen once the pandemic is put under control in the US. So it will coincide with a period during which the supply-demand disequilibrium will not be as massive as it was last year. Thus, this in my view is a major risk to Intco which the company has either not considered sufficiently enough, or has purposefully omitted in its releases to its shareholders.

Overall, we can never know how the dynamics will truly play out. However, we can only trust that business sense will prevail and companies (in particular Intco) will have the sensibility to moderate their business decisions based on market conditions - which I believe will happen.

observatory and Supermax2020, thank you for your comments.

observatory, thank you very much for your detailed analysis. Yes, the ROI for any capex in glove production expansion right now is astoundingly high, and with other things equal, any extra expansion right now will result in a 100% return on that investment within less than a year. However, as you mentioned there are certain constraints, especially in terms of raw material, and in many cases (especially in the midst of a pandemic) - in terms of human resource availability.

Now bear in mind the following things:

- Your calculation for expansion capex ROI is based on the present year's ASP, which as we all know will not be sustained at this level for an extended period of time. Thus, any extra capacity that will come on board due to raw material constraints (for instance) after 2 or 3 years, will have far worse ROI than any capacity that goes online right now. That is the reason why existing players have aggressively moved their expansion plan timelines within this year, as opposed to the previously 2- or 3-year timeframe. That is also why we don't see new players with projected timelines of starting production in 2-3 years into the future. In fact, this is the reason why Japan and Germany, as well as to a large extent the US, scratched off the idea of building up domestic capacity. The US will commission domestic capacity from US manufacturers to the tune of 12 billion pieces per annum, which will serve about 10% of the needs of the local market and will be used exclusively as a cushion, rather than as an actual market-mover. In fact, observing the national strategic plans of the main glove importers was the main reason I delayed my entry in gloves until I was certain it would not happen at any meaningful scale.

- As we have discussed, Intco has the incredible start-up advantage to be able to get land practically for free, and likely other incentives from the local Chinese governments. However, this is not the case for anyone else, and it is most certainly not the case for any of the Malaysian players. Thus, the ROI time curve looks very differently for other players (the vast majority of the players). Also as I have mentioned before, I believe post-pandemic (or even beginning within the pandemic itself, once extra capacity is available from Malaysia and domestically), the Chinese companies will face tremendous difficulties with exports to the US, Japan, and likely other aligned major import destinations. Presently the main reason why the Chinese companies are able to increase their share of the imports to these markets is because Malaysia still does not have the capacity to fully serve the existing demand. Trade and geopolitical issues are unlikely to disappear. At present the US imports of Chinese PPE are allowed only very reluctantly on the American side, and are viewed as a "deal with the devil", like how the EU and Russia are in extremely tense relationships, but the EU still needs to import gas and petrol from Russia. Once the need is not there, the problem will lie with the exporter, and the EU would love to not import fuels from Russia (hence you had the war in Syria for instance).

All of this is the reason why, even though at present any new capacity expansion is likely to result in over 100% ROI within 1 year, we are not seeing an actual explosion of hundreds of players rushing to invest in opening new factories. Most of the new capacity comes from existing players as they have better access to self-produced raw materials as well as to third-party raw material providers. On Intco's expansion, I follow the case with a lot of interest, but my mid-term expectations on Intco's business prospects are negative.

dusti, bpsiah, thank you for your comments.

dusti, the highest authority is supposed to be the Securities Commission in this case. However, bear in mind that according to my (limited) research, this is all acceptable, i.e. it technically doesn't go against the rules of Bursa. Thus, the rules would have to first be amended to place everyone in a level-playing field before potentially a complaint could be lodged.

bpsiah, it is certainly not a fair practice, especially when market-moving amounts of capital are poured into shorting the stock. However, bear in mind that this also means that there is a willing seller of the shares the short-seller has bought in the off-market transaction. Also bear in mind that whatever price the short-seller has paid is likely to have been higher (probably substantially higher) than the market price, which means they are cutting losses currently.

Imagine333, observatory, dumbdumb123, Stock Eyes, invest200, huat8787, katsul51, Goldberg, omione, CJkenho, Trump2020, thank you for your comments.

huat8787, thank you for sharing this link. Yes, this is the latest glove industry research report I have referred to in my article.

omione, I just sent the file over to you.

dumbdumb123 and CJkenho, yes, usage in non-medical industries (especially in developing countries where pre-COVID it was near zero) will be the main added growth (extra growth on top of the 8-10% annual growth pre-COVID) factor moving forward. It will not be purely due to habits and hygiene awareness, but predominantly due to official safety requirements that are being put in place.

I just published this, in case anyone is interested: https://klse.i3investor.com/blogs/bursainvestments/2021-02-16-story-h1541112319-Glove_Supply_and_the_Supply_Demand_Disequilibrium_Top_Glove_Supermax_Ha.jsp

I just published this, in case anyone is interested: https://klse.i3investor.com/blogs/bursainvestments/2021-02-16-story-h1541112319-Glove_Supply_and_the_Supply_Demand_Disequilibrium_Top_Glove_Supermax_Ha.jsp

I just published this, in case anyone is interested: https://klse.i3investor.com/blogs/bursainvestments/2021-02-16-story-h1541112319-Glove_Supply_and_the_Supply_Demand_Disequilibrium_Top_Glove_Supermax_Ha.jsp

I just published this, in case anyone is interested: https://klse.i3investor.com/blogs/bursainvestments/2021-02-16-story-h1541112319-Glove_Supply_and_the_Supply_Demand_Disequilibrium_Top_Glove_Supermax_Ha.jsp

VenFx, dumbdumb123, thank you for your comments.

dumbdumb123, I tried not to use "export" in my article, because it would've made it even more confusing. I realize that it's a lot of information I've tried to squeeze into a relatively small amount of space, but I prefer that to writing a lengthy post. When in doubt, and not sure about the meaning, please check with the original sources linked to in the article itself.

CJkenho, thank you for your comment.

The largest part of the short positions opened since the beginning of the year took place on January 4 itself at average price far below RM6. The average price at which shares of Top Glove have been shorted is therefore RM5.79. So this is the minimal break-even price for the short seller, even if we discount any extra costs, such as borrowing fees, brokerage fees, and so on.

zzzz52, paperplane, thank you for your comments.

paperplane, I am not sure I understand your comment, but it sounds like it's pretty off-topic. Thank you anyway.

Yong Ken, thank you for your comment.

Bursa, like other underdeveloped markets, exemplifies severe inefficiencies in market valuations. As a fundamentalist, I like this very much, because it provides for incredible arbitrage opportunities even with regards to KLCI constituent companies.

The problem, and why most people are unable to do well on Bursa, is because everyone's investment horizon is very short. This is of course partially a function of the fact that there is no capital gains tax or dividend tax in the country, which leads to short-termism and gambling-like behavior.

katsul51, thank you for your comment.

Medical glove demand closely follows the development of the pandemic right now. This was very clearly visible specifically in the case of the UK where deliveries skyrocketed in tandem with the sharp increase of cases. However, post-pandemic (likely after 2023), the main growth catalysts will be non-medical industries and emerging markets, so in terms of visibility, we still have to go beyond what has just happened or what is happening currently. I will share some additional data on that soon.