Top Glove Corp Bhd rose as much as 3% to RM8.10, its highest so far today
At 11:50am, the shares were traded at RM8.04 for a market capitalisation of RM4.97 billion.
The fourth-largest gainer on Bursa Malaysia saw 759,400 shares transacted.
Today, the ringgit weakened to 4.2303 against the US dollar, following China’s yuan devaluation and in anticipation of US interest rate hikes this year. The ringgit also closely tracks prices of crude oil, which forms a crucial portion of the Malaysian economy.
As Top Glove sells its rubber gloves in US dollars, a weaker ringgit translates into higher income in ringgit terms, when the US dollar-denominated sales are converted into the Malaysian currency.
Investors have also bought Top Glove shares, after analysts’ gave a higher target price (TP) to the stock.
Yesterday, AllianceDBS Research Sdn Bhd upped its Top Glove TP to RM9.15, from RM6.95, due to a stronger US dollar.
AllianceDBS said Top Glove could pay higher dividends, “given the rising cash pile” in the company.
“Top Glove has the largest exposure to natural rubber gloves among peers, and its valuation is cheaper than peers like Kossan Rubber Industries Bhd and Hartalega Holdings Bhd, despite being in a better position to retain the gains from a stronger US dollar,” said Alliance.