Malaysia's Top Glove shares slump after new movement curbs at worker dorms

by Reuters
Tuesday, 17 November 2020 03:37 GMT

FILE PHOTO: A worker inspects newly-made gloves at Top Glove factory in Shah Alam, Malaysia August 26, 2020. REUTERS/Lim Huey Teng/File Photo

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The measures are intended to enable targeted coronavirus screenings on workers and residents as infections rise

KUALA LUMPUR, Nov 17 (Reuters) - Shares in Top Glove Corp Bhd fell 10% on Tuesday after Malaysia tightened movement curbs in an area where the company's dormitories are located to enable targeted coronavirus screenings of workers and residents.

The world's largest latex-glove maker said it was seeking clarity on the lockdown on worker dorms where COVID-19 cases are rising. It did not respond to an email from Reuters asking whether production would take a hit.

COVID-19 cases in Malaysia have risen sharply since October, with the daily count hitting its highest this month since the pandemic started. The country had a total of 48,520 infections on Monday.

Roughly 15% of Top Glove's total factory workforce, or about 2,500 workers, will be affected by the two-week curbs, analysts said.

The curbs are likely to add to Top Glove's woes after it was hit by an American import ban on two of its subsidiaries earlier this year, though some analysts said the impact was likely not big yet.

"Based on our rough estimate, with 15% of workforce affected by the 14-day quarantine, the impact to Top Glove's bottom line is less than 1%, which is insignificant," AmInvestment Bank analyst Thong Pak Leng said in a research note.

Shares in other glove makers including Hartalega Holdings and Supermax Corp fell as well, likely affected by news that U.S. vaccine maker Moderna Inc's experimental vaccine is 94.5% effective in preventing COVID-19 based on interim data from a late-stage trial.

(Reporting by Liz Lee; Editing by Himani Sarkar and Muralikumar Anantharaman)

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