KUALA LUMPUR: Glove stocks remained in the red on Wednesday, following a heavy sell-down the previous day that wiped out a staggering RM5.23 billion in market capitalisation for Bursa Malaysia's four largest rubber glovemakers.
Hartalega Holdings Bhd, which triggered Tuesday's panic selling, extended its losses, closing 17 sen or 6.51 per cent lower at RM2.40 apiece, bringing the company's valuation to RM8.47 billion.
With 103.93 million shares changing hands, the world's largest nitrile glove producer, was the most actively traded stock on Bursa Malaysia. Year-to-date, Hartalega's value has shrunk by 39.55 per cent.
The other three leading glovemakers on the local exchange, ranked by market value, are Top Glove Corp Bhd, Kossan Rubber Industries Bhd, and Supermax Corp Bhd.
Tracking closely behind Hartalega was Top Glove whose shares dropped three sen or three per cent to 97 sen apiece with 99.68 million units traded. The company was the second most actively traded stock on the board.
Top Glove's market cap stood at RM7.93 billion. Year-to-date, the second largest glove player of the four has lost nearly 30 per cent of its value.
Meanwhile, shares of Kossan and Supermax eased 3.05per cent to RM1.91 a unit and 0.69 per cent to RM1.03, respectively. Kossan's market value stood at RM4.86 billion, while Supermax was at RM2.80 billion.
Kossan was also among the five most active stocks on the local bourse.
Collectively, these companies, dubbed Bursa Malaysia's Big Four glove stocks, hold a combined market cap of RM24.06 billion, compared to RM25.01 billion on Tuesday.
On Tuesday, shares of Hartalega and Kossan were halted for intra-day short selling (IDSS) after breaching the daily limit threshold.
Under Bursa Malaysia's short-selling rules, IDSS activities will be suspended if a stock under RM1 per share loses more than a daily limit of 15 sen a share. The daily limit is 15 per cent for stocks above RM1 a share.
Hartalega and Kossan fell 23.2 per cent to RM2.61 and 16.17 per cent to RM1.97, respectively, before trading of their shares was suspended for IDSS.
The share-dumping domino effect nearly caused Top Glove's stock to join Hartalega and Kossan when its share price tumbled by as much as 16 sen or 13.79 per cent to RM1 per share.
Supermax, the smallest player in the group, also experienced a decline, falling nine sen or 7.96 per cent to RM1.04, with 43.28 million shares traded.
Tuesday's panic selling in glove stocks followed news of Hartalega's bleak outlook for the remainder of the year, shared during an earnings conference call, according to a report.
Hartalega had earlier reported a 12.82 per cent decline in quarterly earnings due to higher operating expenses.
Glove stocks, especially the Big Four, have been known for their tightly linked price movements, particularly since the Covid-19 pandemic, which saw a historical surge in global demand for rubber gloves.
The euphoria for glove stocks in 2020 led investors to even scramble for shares in smaller companies, driving their prices to record highs. When the rallies ceased, a widespread sell-off ensued.
One notable instance was in June 2020, when a staggering RM10.5 billion in market cap was wiped out from the four counters in a single day following news of a Covid-19 vaccine breakthrough.
Today, investors remain highly sensitive to any developments affecting the Big Four, with ripple effects often extending, albeit to a lesser extent, to smaller glove manufacturers as well.
Among the smaller glovemakers impacted by the Big Four selling pressure were Comfort Gloves Bhd, Hextar Healthcare Bhd and Careplus Group Bhd.
Comfort Gloves dropped by half a sen or 1.39 per cent to 35.5 sen, while Careplus and Hextar which also saw a drop in their share prices on Tuesday, closed unchanged at 23 sen and 16.5 sen respectively.
The trio has a combined market capitalisation of RM583 million.