KUALA LUMPUR (May 16): Rakuten Trade said trading in rubber glove stocks took the limelight on Wednesday, buoyed by the US tariff imposition on Chinese goods which will only take effect in two years.

In a commentary on Thursday, the research house therefore said that it sees Wednesday’s euphoria as only a knee-jerk reaction and advocated investors to be vigilant.

Meanwhile in a separate note, Hong Leong Investment Bank (HLIB) Research said the US tariff will not have a material incremental effect to its forecast 2026.

However, the research house believes that Chinese players' decision to gradually shift their target markets from the US to European and Asian markets will result in a near-term trade diversion from the US to Malaysia.

“This will benefit most Malaysian players, albeit biased towards Hartalega Holdings Bhd (KL:HARTA) and Kossan Rubber Industries Bhd (KL:KOSSAN).

“In addition, we do highlight potential re-rating prospects for Kossan, considering its more favourable balance sheet and income statement profiles,” it said.

HLIB said that with Wednesday’s positive share price reaction following the US tariff news, the recovery thesis by calendar year 2025 (CY2025) has now been priced in.

“We maintain our 'neutral; rating on the sector - with 'buy' rating on Kossan, 'hold' on Hartalega and 'sell' on Top Glove Corp Bhd (KL:TOPGLOV),” it said. 

https://www.theedgemarkets.com/node/711776