KUALA LUMPUR: Glove makers stood out on Friday, notching some solid gains as investors viewed them as fundamentally strong to deliver impressive earnings with the Top Glove Corp Bhd seeing strong trading interest.
Whether the buying was solely by retail buyers inspired by “bursabets” -- a new subreddit on social news aggregator site Reddit -- is unclear due to the lack of data at market close.
However, comments on bursabets prompted the Minority Shareholders Watch Group (MSWG) to advise retail investors to exercise caution in their dealing of stocks, especially due to recent calls in social media to shore up the share price of certain stocks.
Top Glove jumped to an early high of RM7.12. It closed up 53 sen to RM6.74. It was very actively traded with 161.62 million shares done at prices ranging from RM6.56 to RM7.12.
Hartalega Holdings Bhd rose to a high of RM13.42, before closing at RM12.86, up 66 sen. There were 14.66 million shares done at prices ranging from RM12.32 to RM13.42.
Supermax Corporation Bhd climbed to a high of RM7.16. It ended the day up 24 sen to RM6.80. There were 45.22 million shares transacted between RM6.61 and RM7.16.
However, the gains by the three stocks were unable to offset the weaker FBM KLCI as investors locked in profit ahead of the long weekend, volatile Wall Street and it being month end.
The 30-stock KLCI closed down 14.22 points or 0.9% to 1,566.40. Turnover was 6.53 billion shares valued at RM6.32bil. Decliners beat advancers 869 to 367 while there were 384 counters unchanged.
Kossan rose 19 sen to RM4.45. There were 14.42 million shares done at prices ranging from RM4.30 and RM4.59.
Remisiers said glove stocks were expected to continue to delivery strong earnings growth due to the surge in demand caused by the Covid-19 pandemic.
“These stocks have fundamentals and we expect super normal earnings to continue this year,” said a remisier.
“But I’m unsure if it is driven solely by social media.”
On Jan 4, glove makers were among the stocks hit by shortselling by large institutional players when the regulated shortselling activities were given the go-ahead to resume. However, the stocks had recovered by Jan 8 as the shortsellers had to buy back the shares.
On Thursday, bursabets, a copycat of the controversial US-based "WallStreetBets", has called upon retail traders in a new post to help shore up the share prices of Malaysian glove manufacturers.
It aims to replicate GameStop’s feat on Bursa, alleging trading in the local glove sector has been manipulated by large institutions, which have undervalued the stocks for their own profit.
However, MSWG advised minority shareholders to exercise diligence and be aware of the risks involved in such initiatives.
“Generally, institutional investors tend to have deeper pockets. This is not to underestimate the retailers purchasing power. At the end of the day, it may become an issue of who has deeper pockets and the stamina to sustain their initiatives.
“Secondly, there may be some unscrupulous retailers including ‘stockmarket gurus’ who may unload their shares after having encouraged other retailers to drive up the share prices.
“The Securities Commission has constantly warned members of the public against dealing with unlicensed investment advisers as they could be defrauded or used as part of a market manipulation scheme.
“Eventually, such action by both parties in trying to counter each other will create volatility in the share prices and this may be a risk to the short-term investors,” MSWG said.
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