Market Cap Gap Between Top Glove and Maybank Narrows To RM10b

Malayan Banking Bhd (Maybank)’s market capitalization (market cap) has shrunk to below RM80 billion, as the selldown on banking stocks continued, which has further reduced the gap between Malaysia's most valuable company on the local stock exchange with the next in line, Top Glove Corp Bhd.

Investors' concerns about whether the Budget 2021 would get majority approval in Parliament on Thursday and the closure of some of Top Glove's plants weighed on Bursa Malaysia at midday on Tuesday. At 12.30pm, the KLCI was down by 9.75 points or 0.61% to 1,587.73, with Top Glove accounting for more than half of the losses in the index. 

Maybank shares slipped 1.12% or eight sen to settle at RM7.09 per share yesterday, which gave it a market cap of RM79.7 billion, after 9.66 million shares were done. On a year to date (YTD) basis, the stock has declined by 13.7% (see table). Top Glove, on the other hand, climbed 6.61% or 53 sen to close at RM8.55, which valued it at RM69.52 billion, after 98.43 million shares were traded. YTD, the stock is up over 440%.

This has reduced the gap between the two companies to RM10.18 billion, down from a difference of RM15.39 billion seen on Wednesday. Just at the start of this year, the gap between the two was RM57.22 billion, when Top Glove had a market cap of RM38.03 billion and Maybank had a market cap of RM95.25 billion.

Turnover was 5.46 billion shares valued at RM2.41bil. The broader market was weaker with decliners beating advancers 3.5 to one, or 874 losers top 245 gainers and 409 counters unchanged. Among the key Asian markets, Japan's Nikkei 225 rose 2.7%, Hong Kong's Hang Seng Index gained 0.05%, and Singapore's Straits Times Index up 0.86% but the Shanghai Composite shed 0.07%. 

At Bursa, Top Glove was among the top losers after 28 of its factories in Kapar, Klang will be closed in stages following a surge in Covid-19 cases. It fell 45 sen to RM6.90 and wiped out 5.66 points from the KLCI. Maybank is now down 5.34% from the 12-month consensus target price (TP) of RM7.49 it garnered on Bloomberg. The stock has four 'buy' calls, 12 'holds' and five 'sells'.

The financial services index closed 0.9% or 111.7 points lower at 12,335.44 points. In contrast, the FBM KLCI closed 4.32 points higher at 1,500.8, as renewed buying interest in glove counters helped lift the benchmark index.

A fund manager, who declined to be named, said he is still attracted by Maybank’s dividend yield and the potential price recovery when the economy returns to normal once the pandemic is over. It suits a long-term dividend portfolio,” he said. Based on Bloomberg data, Maybank has an indicative dividend yield of 5.5%.