KUALA LUMPUR: Top Glove Corp Bhd is now the second most valuable stock on Bursa Malaysia, having displaced Public Bank Bhd on August 18.
And the gap between Top Glove and the local bourse's No. 1 Malayan Banking Bhd (Maybank) is narrower than ever, thanks to the "super" interest in rubber glove stocks due to the Covid-19 pandemic.
At the closing bell on Wednesday, Top Glove's shares gained 4.06 per cent to RM27.14 with 26.13 million units traded, pushing its market capitalisation (market cap) to RM73.47 billion.
Public Bank's shares dropped 1.02 per cent to RM17.48, with a total of 2.42 million units changing hands, giving it a market cap of RM67.86 billion.
Maybank, meanwhile, had a market cap of RM85.88 billion, as of August 19.
Top Glove and Public Bank were racing head-to-head in securing the second spot ever since the country was hit by the pandemic, causing glove and healthcare stocks on a bull run.
For the first time ever on July 23, the world's largest glove producer ousted Public Bank and became the second largest stock with a market cap of RM70.45 billion, after Public Bank settled at RM69.57 billion.
Public Bank reclaimed the No. 2 spot a day later with a market cap of RM68.79 billion. Top Glove dropped back to third with a market cap of RM68.62 billion.
On July 27, Top Glove regained the second spot (and extended it until August 11), with a market cap of RM73.80 billion versus Public Bank's RM65.69 billion.
From August 12 till August 17, it went back to Public Bank, as Top Glove saw a hefty loss in market cap to RM60.69 billion on August 12.
The loss was mainly attributed to the announcement of the development of Russian vaccine for Covid-19 and rumours about the implementation of windfall tax that sparked profit taking in most rubber gloves counters.
However, market observers downplayed the vaccine potential, saying it would take time to manufacture as it required human testing and clinical trials. Hence, mass production was unlikely to commence until next year.
On August 18, Top Glove regained its edge over Public Bank, having recovered about 16.33 per cent or RM9.91 billion rise in market cap, to RM70.60 billion against Public Bank's RM68.56 billion.
CGS CIMB analyst Walter AW said glove makers' order book visibility would remain strong until the first half of 2021 and average selling prices (ASPs) continue to increase in the near term.
"We understand that most of the glove makers are still increasing their ASPs on a monthly basis due to favourable demand-supply dynamics.
"Therefore, we believe the increased demand and ASP hikes should lead to sequentially stronger results for all the glove makers," he said in a report recently.
CGS CIMB remains "overweight" on the glove sector as the current retracement in share prices of glove stocks offers attractive investment opportunities as glove manufacturers were key beneficiaries of strong global glove demand stemming from the Covid-19 pandemic.
The firm's sectoral top picks include Top Glove, Supermax Corp Bhd, Hartalega Holdings Bhd and Kossan Rubber Industries Bhd.
In an interview with Bloomberg TV recently, Top Glove managing director Lee Kim Meow said there had been an upsurge of demand for gloves from every part of the world.
"This is something rather unusual. In the past, we have had demand coming from specific countries but right now we are having requests for gloves in almost every corner of the world.
"We work hard to get the gloves out so that they (customers) could reach the end-user very quickly such as in the hospitals, laboratories and other places where they require gloves badly," he said.
Lee said demand for gloves used to be about 8.0 per cent to 12 per cent before the Covid-19 pandemic but now the glove manufacturer was seeing the demand increasing from 10 per cent to 15 per cent or even 20 per cent.
He said the concern for health and protection was much important, particularly in bigger countries as demand had increased by 250 per cent like in the United States, and 300 per cent in some European countries as well as Japan.