BURSA Malaysia is not a market for retailers. Some 30% of the index weighting is on glove stocks – namely Top Glove Corp Bhdand Hartalega Holdings Bhd.

On a single day, the price of the four glove stocks can gyrate anywhere between 20% and 30% and it is accompanied by huge volumes, which suggests that it is a playing ground for the funds as well as punters.

In a single day last week, Supermax Corp Bhd, which is among the top four glove companies, gyrated as much as RM5.30. It went as high as RM17.80 and as low as RM12.50, before closing the day at RM15.90.

A normal investor would probably have had a heart seizure. Anybody who had bought the stock at the peak with the view of selling on the same day would have lost his or her pants.

The story is the same for all the other glove stocks. The price gyration is scary, to say the least. The stocks are up in the morning before coming down late afternoon and picking up strongly by the end of the trading day.

Clearly, it is not the kind of market for retailers. It’s only for those who are really experienced in trading and understand the dynamics of jumping in and out without getting hurt.

Some research houses have tagged unprecedented valuations on glove stocks. It’s surprising that even the foreign houses have raised the price of the top-notch glove companies such as Top Glove and Hartalega to more than RM30. Credit Suisse’s target for Top Glove is RM37.

Glove stocks are trading at historical price earnings (PE) multiple of between 75 time and 170 times at current prices. Among the four glove manufacturers, the stock with the highest PE multiple is Supermax while Kossan Rubber Industries Bhdis at the lowest end at 75 times PE.

If the stocks hit the price targets as set out by the research houses, we are looking at Supermax possibly trading at almost 200 times PE and Top Glove at more than 120 times PE. The mind-boggling valuations are jaw-dropping but analysts seem to suggest that the stocks have the earnings potential.

Are analyst reports reliable?

The upgrade in price targets by research houses suggests that there is an impending earnings explosion of the companies in the second quarter. But what the research houses fail to stress is the sustainability of the earnings.

To the pessimist on glove stocks, they would say that analyst reports certainly are not a yardstick as they are just forecast numbers and not any indication to buy or sell the stock.

However, to be fair, some research houses had predicted Top Glove to be RM25 a month ago when it was barely touching RM15. Then, many had dismissed the price target as nonsensical. Now, RM25 seems to be a reasonable price for Top Glove for some.

Amidst the optimism surrounding glove stocks, it’s interesting to note that the major shareholders of Kossan have disposed of a little of their holdings in the market. The family of Tan Sri Lim Kuang Sia, who control Kossan and are known for not selling their shares even when prices were high, sold a few million shares in recent weeks.

The family still retains a substantial 47% in Kossan. Their move to take some money off the table is something that should not be dismissed. It’s a clear signal that glove stocks are looking over-valued.

The interest on glove stocks is so huge that it is said to be responsible for the crash of Bursa Malaysia’s trading system on Thursday. The crash came as there was heavy selling on glove stocks following news that the US authorities have stopped some shipments of Top Glove’s exports to that country.

The US market accounts for 25% of Top Glove’s exports and gives the highest average selling prices for the gloves. Hence, the impact is significant on Top Glove.

The announcement was out during the lunch break although news of the consignment being stopped seeped into the market in the morning. Top Glove resumed trading at 3.30pm. Shortly later, the system crashed.

Brokers feel that the crash came about because of the heavy sell order for glove stocks, which is not surprising considering the volume these stocks garner.

The run on the glove stocks is a reminder of the dotcom run in 1999 when semiconductor producers namely Malaysian Pacific IndustriesBhd and Unisem Bhd were the darlings of the stock market.

The stocks were on an uptrend for almost a year before the dotcom crash in 2000. The two stocks hit ballistic valuations that not many fund managers had envisaged. Until today, the two stocks are still considered the bell-weather for the tech sector.

But now there are many more players in the tech sector. They are diversified into several segments within the sector and Technology is an index within Bursa itself.

Similarly, the play on glove companies is now focused on the top four stocks. The others are enjoying the run on the sector. If demand for gloves continues, the sector will likely see more new names emerging on the stock market.

Next week can only get 2++ plus

说的太好了，真实情况应该篱事实不远！希望无辜投资者远离这祌公司。

Better invest your hard earned money in other counter which can see your return rather than stick to this useless con stk

Just my wild guess , not recommend to buy & sell , trade at your own risk ah..

I think next week should break $ 2 , reisistance at 2.50 , 2.90 , 3.35 . 4.50

Good at con and trap public investor money , how far can this co go? Better run fast fast oh...whenever release "good" news is to pump up higher to distribute to public investor. What kind of con job..malu la goreng share price macam ini

Good one , let huat together

Go all the way , I have a feeling that if today no limit up , it will happen on Monday

Better invest in small glove company offering good concrete growth prospect due to pro-long of covid -19 pandemic

Yup , I think game over liao

AS usual today will release old tin kosong good news to save price crash on Monday

All counter rebound except this lousy ctr

Good ..broke suppport and enter new cycle of bear trend , more selling to come next

Trap ppl so many times , retailers just watch at side and let them play themselves

Eventhough not a good piece of news for human being but definitely is a good news for glove company , can have a good profitability & long time business growth

Shark also panic now as nobody want to play this stk anymore, reputation need long time to build up again

Next week announcement on good Q2 result?

Glove stock Careplus in play again as benefit from major customer Brazil..

https://www.sinchew.com.my/content/content_2308638.html

Congrate to those brave investor and just hold tight tight till the announcement of Q2 result

Expecting new low below 50 today

Expansion of 11 new lines in year 2020 plus 2 more lines in 2021..but unsure if they are building new plant or accommodate in existing factory premises . The new additional lines are inline with the objective of JV with Ansell

If K+ is main competitor to Topglove then good opportunity to fill in the market vacuum as glove still has great demand in USA.

PP taker also kena play out, non wonder Kendall kuda lari kuat kuat lol..

Q2 expected to be released latest by 28th July 2020

Could this small company emerge and grow to a bigger player JV with Ansell especially to tap into the US market

https://www.ansell.com/my/en/about-us/investor-center/asx-announcements/ansell-limited-to-enter-joint-venture-with-careplus

https://www.ansell.com/us/en/about-us

I thought Ansell is a US based international company instead of Brazil company, if it is US based then really good for expanding into US market to reap handful profit

Ini co pandai goreng share saje tapi spoil dia punya reputation..public investor already shy from this counter as can see from the low volume

Careplus mainly export to Brazil therefore not much affected by USA sanction but expecting good Q2 report is the stimulus to hold the share price

Nice drop collect more..

This one good to trade if price crash below 50sen, otherwise just stay sideline and watch..

The small volume drop means that the banker not yet unload and wait for next push up...trade at your own risk as final decision at your own

Small volume T2 today , good sign and it will fly up again after the clerance..solid support at 1.70 sen now , can add more in case drop to support level

This round can buy below 50 sen

@ invest icon Thx for the valuable info and will keep holding in anticipating a good quarterly result

Any sifu can confirm if the profit enter into Q2 for disposal of subsidiary to Ansell ? How much EPS if enter into the quarterly result?

https://timesofindia.indiatimes.com/life-style/health-fitness/health-news/coronavirus-vaccine-update-unrealistic-to-have-a-perfect-vaccine-ready-situation-getting-worse-says-who/photostory/76957871.cms

Afternoon coming..

https://edition.cnn.com/2020/07/14/health/us-coronavirus-tuesday/index.html

https://klse.i3investor.com/blogs/DFBB/2020-07-15-story-h1510544583-Technical_Analysis_14_July_2020.jsp

https://www.facebook.com/WealthArchitect2u/videos/719872952139549

Agreed that pp taker is their own ppl as otherwise announcement being made to public earlier without keeping it as a secret..can"t hide all the time and truth will be surface one day

Why stick to this type of counter losing opportunity cost? Better invest glove counter like Comfort , Careplus ...

Wow congrate to all Careplus investor, today powerful shhot to limit up..tomorrow gap up like rocket

Today sure will break previous high of 1.89..tomorrow break 2.00

Small glove manufacturer play catch up today, better join the party

https://www.theedgemarkets.com/article/rm5766b-poured-these-seven-glove-stocks-march

1. director also buy - and she bought at 1.48
2. director apply to the Bursa for dealing in shares to buy shares - have to force announce QR results 1 month earlier which is end of this month 28 July - if not good results, why would they do this? unless you are really mad la...quickly rush to announce bad results
3. the upside glove ASP prices were not fully factored into last quarter results because spot orders just peaked in may june - can you imagine the kind of crazy number profits?
4. the PE ratio for Carepls, unlike the Big 4 is still rational and makes sense - Big 4 is now a ponzi telling me it is worth more than TENAGA and RHB Bank. Really makes no sense - it is a bubble waiting to burst - and when they burst the people will all flood Carepls and Careplc will rocket to the skies
5. Glove mania will continue for the next few months of extraordinary profits - ASP prices hiking but Big 4 is too saturated - no more room for upside only downside - when people start to sell and take their profits, that is when Big 4 will hit the ground in a crash