16+% of the daily volume today so far is short selling.

Germany mulls cutting international air traffic 'to almost zero'
https://www.nst.com.my/world/world/2021/01/660819/germany-mulls-cutting-international-air-traffic-almost-zero

Excerpt from the article:

"The danger from the numerous virus mutations forces us to consider drastic measures."

observatory, thank you very much once again. I will review them carefully. I have also done some extra digging and I will share my findings a little later (probably next week).

Ron90, thank you for your comment. Banks, and a few other companies in other industries, are certainly fundamentally sound.

lching, thank you for your comment. Yes, China is always a force to be considered.

observatory, as always - thank you very much for the information. Unfortunately I don't read Chinese, so my research capabilities on the Chinese players are admittedly limited. The numbers seem to be substantially different at different sources. Do you happen to know where the original source of this data is?

30% of the total market in 3 years (by end of 2023?) would likely mean they would have to produce 130-140 billion gloves per annum, which I think is pretty much impossible. For comparison, with a very aggressive expansion campaign Top Glove will be able to produce 134 billion gloves per annum by the end of 2022, and they target total capacity of 190 billion gloves per annum by 2025.

menotassassin, today's total short selling on Top Glove is: 7,045,000 shares, or 20% of all sell-side trades for the day.

birkincollector and newbie8080, thank you for your comments.

birkincollector, the market size is usually directly proportional to the amount of capital that market attracts. Unfortunately, it does seem like the big glove manufacturers have outsized the Malaysian stock market as the amount of capital they attract (either in a positive or in a negative manner) is beyond the scope of Bursa.

newbie8080, yes, that is what I said in my post. However, please note the irony of the biggest glove manufacturer producing almost 5 times more gloves (at higher profit margin segments) than the biggest glove manufacturer by market capitalization. Note that Intco is actually not even listed on the main Shenzhen stock exchange (they are listed on ChiNext).

Xcatcat, if no closing of short positions has been done yesterday, at present approximately 236 million shares of Top Glove are in open short position (including the ones shorted this morning), or about 2.87% of the outstanding shares of the company.

Short selling for today so far:

Top Glove - 3,010,000 (19% of the entire daily volume of sales)
Hartalega - 198,100 (6% of daily volume)

Goldberg, tylee81, Jim Tan, thank you for your comments.

tylee81, I keep hearing that the quarterly results have been expected by retailers (bless their incredible foresight), and then I keep seeing analysts coming out and saying things like "results beat expectations by 20-30%", so I am not exactly sure what to say. Yes, great results were expected, but the results have consistently been beating even the consensus expectations by a significant margin.

witan, Icon8888, Anthem2, thank you for your comments.

witan, it does seem like the biggest collectors of sold shares have been retailers, based on daily stats.

Icon8888, the earnings prospects of the Malaysian glove manufacturers depend to practically a negligible extent on if there would a full lockdown in the country or not.

Anthem2, I always welcome opposing opinions. Unfortunately, not many have been particularly constructive.

The paper loss of the short seller, as of end of trading today, stands at:

-RM315,770,595

CCCL, thank you for your comment. Unfortunately the Malaysian stock market is indeed of insignificantly smaller size. However, foreign funds can still access it. Hopefully things will improve, especially after the listing of Top Glove on HKEX.

Andre Kua, thank you for your comment. I did my absolute best to find as much information as possible on Intco Medical over the last few weeks. Unfortunately, apparently in their financial reports they don't provide revenue/profits by segment of their business. In any case, I have seen a number of places give gloves as their main business. Please note that no company operates in only one sector, or sub-sector. For instance, Supermax produces contact lenses and face masks, besides gloves.

soojinhou, thank you for your comment. Neither the markets' participant composition, nor their size, nor their depth and breadth are the same. This has little to do with companies and their earnings versus corresponding market price though.

super_newbie, could you let me know where you got the information from? As of September last year their total capacity was 19 billion pieces.

Targeted and Goldberg, thank you for your comments.

wkc5657, the frenzy from June-October last year on Bursa was nowhere near to the level it is on Intco right now. Additionally, the drivers were different. The Bursa frenzy was predominantly short-term profit taking driven as became evident after profits were quickly taken post-vaccine news. China's buying momentum is a lot more related to fundamentals.

Primeinvestor, could you let me know where you got the information from on Intco? I stand corrected on Supermax's capacity. As of 31 December 2020, their capacity is 26.175 million pieces (see: https://www.bursamalaysia.com/market_information/announcements/company_announcement/announcement_details?ann_id=3099760)

gohkimhock, thank you for your comment. The earnings potential of the glove manufacturers at present has relatively little to do with the total world population, and most certainly it has nothing to do with yours or my personal yearly glove consumption.

A quick article for end of the day, because some people have been asking me if the Malaysian gloves are still worth it even with the prices as of today close:

https://klse.i3investor.com/blogs/bursainvestments/2021-01-25-story-h1540153149-Intco_Top_Glove_Supermax_A_Quick_Comparison.jsp

A quick article for end of the day, because some people have been asking me if the Malaysian gloves are still worth it even with the prices as of today close:

https://klse.i3investor.com/blogs/bursainvestments/2021-01-25-story-h1540153149-Intco_Top_Glove_Supermax_A_Quick_Comparison.jsp

- 12.8 million shares shorted since Wednesday last week

- 12 million were bought back Monday, Tuesday, and Thursday last week; no data for Friday, but by the look of things, probably 1 million bought on Friday

Highly likely the short seller is out of shares to short at this point.

Huge percentage of the sell side since restart of trading is short sales:

1.23 million shares shorted in the past 40 minutes.

It is possible that the short seller's shares are over though.

If my calculations are correct:

- Excluding Friday last week (for which we do not have up-to-date data), the short seller has bought back 12 million shares of Top Glove.

- Between Wednesday and Friday last week they short-sold 8.4 million shares.

- This morning session they short-sold 3.17 million shares (10% of the entire morning volume).

I believe the shares they are shorting right now are the shares they actually bought back. Thus, unless they have bought back some shares on Friday, they have only about 430,000 shares more to short for the afternoon session.

The total paper loss for the short seller just breached the RM300 million mark.

6.50 wall was broken.

Targeted, AdCool, calvin69, thank you for your comments once again.

AdCool, that is a very valid point. Unfortunately I haven't seen Top Glove break down their revenue by region. That would allow us to understand better the financial impact of the ban.

calvin69, my expectation is that this will be one of the very first things that will happen once Biden gets around to dealing with the PPE situation.

will75, the VWAPs for the short positions on each of the glove stocks are:

On Top Glove: RM5.69
On Hartalega: RM11.08
On Kossan: RM4.12
On Supermax: RM5.75

You can calculate the losses from there.

Paper loss for the short seller as of right now:

On Top Glove: -RM170,451,636
On Harta: -RM77,370,702
On Kossan: -RM12,855,152
On Supermax: -RM17,531,165

Total paper loss: -RM278,208,655

"MrGlover @Ben Tan At every 1 sen the price of TG increases, the paper...."

It ends this way:

At every 1 sen the price of TG increases, the paper loss rises by RM2,249,768 (and vice versa).

"MrGlover @Ben Tan, you analyses seem to have been cut short. Maybe split into different comments?"

Hmm, what is the last word you see in my comment?

A quick update on the short selling activity:

On Monday and Tuesday last week, 0 shares of Top Gloves were shorted. At the same time 5 million shares were bought back on Monday, and another ~6 million shares were bought back on Tuesday. Thereafter, the shorting continued with a total of 8.4 million shares shorted between Wednesday and Friday.

On Thursday itself, ~1 million shares were also bought back. So in total, in the last week (excluding Friday, for which we do not yet have up-to-date data), the short seller(s) bought back 12 million shares, and shorted additional 8.4 million shares.

It is my strong belief that right now the short seller is actually shorting the shares they bought back. Thus, the likely have 3.6 million shares left to short, provided they haven't been buying back shares on Friday.

If you are wondering why they are doing this - buying back and then short selling again, that's because they are trying to increase the volume weighted average price at which they short the shares. In the beginning of the week the VWAP for TG shorts was RM5.6738, and they have managed to improve that to RM5.6924, or RM0.0186 (a little less than 2 sen). Thus, at the closing price from Friday of RM6.25, their paper loss just on the Top Glove short stands at RM125,447,063.

At every 1 sen the price of TG increases, the paper loss rises by RM2,249,768 (and vice versa).

bullpiano, Goldberg, ahbah, thank you for your comments.

Yes, it appears that Supermax will be in an ideal position to explore long-term contracts with the US government. The United States is by far the largest consumer of medical gloves in the world.

pjseow, thank you for your comment.

Indeed not the full capacity of Top Glove is affected by the ban, and this is the reason why the fall in sales is not sharper.

Let's hope so!

Based on my rough calculation, if they have a 2-week inventory ready, they should have about 690 million pieces in the US (assuming 25% of sales/deliveries went to the US pre-ban). That's based on the 85.5 billion pieces yearly production reported in August, and 85% utilization rate.

If they sell them at $150/1,000 pieces spot price, that's a little over RM40,000,000 extra revenue. Not bad :)

AdCool, thank you for your comment.

Just a couple of quick notes - the 2% sales drop is year-on-year. In other words, it's the difference between 1QFY20 (September-November 2019! long before COVID) and 1QFY21 (September-November 2020). Bear in mind that this is for the entire North America region, which also includes Canada (a large per-capita glove user) and Mexico. The drop quarter-on-quarter between 4QFY20 and 1QFY21 must be substantially bigger than 2%. Thus, the US warehouse stock may actually be quite a lot larger than 500 million pieces.

My opinion on why the Biden administration spells good times for the Malaysian gloves (and especially for TG and Supermax):

https://klse.i3investor.com/blogs/bursainvestments/2021-01-23-story-h1540123454-Biden_Presidency_Spells_Good_Times_for_Malaysian_Gloves.jsp

My opinion on why the Biden administration spells good times for the Malaysian gloves (and especially for TG and Supermax):

https://klse.i3investor.com/blogs/bursainvestments/2021-01-23-story-h1540123454-Biden_Presidency_Spells_Good_Times_for_Malaysian_Gloves.jsp

On working conditions in Malaysia:

https://www.therakyatpost.com/2020/11/04/theres-a-protest-in-bangladesh-for-workers-demanding-to-return-to-malaysia/

ruby20, thanks for sharing. Please see your private message here when you get the chance.

From tonight:

"AstraZeneca Plc has informed European Union officials on Friday it would cut deliveries of its COVID-19 vaccine to the bloc by 60% to 31 million doses in the first quarter of the year due to production problems, a senior official told Reuters."

Source: https://www.reuters.com/article/us-health-coronavirus-eu-astrazeneca-exc/exclusive-astrazeneca-to-cut-eus-covid-vaccine-deliveries-by-60-in-first-quarter-eu-source-idUSKBN29R2I9?il=0


From last week:

"Pfizer Inc. will decrease deliveries of its Covid-19 vaccine to countries outside the U.S. in the next three to four weeks as it renovates a factory in Belgium."

Source: https://www.bloomberg.com/news/articles/2021-01-15/pfizer-to-cut-covid-vaccine-deliveries-as-it-renovates-factory


"Italy is considering legal action against Pfizer Inc after the U.S. drugmaker announced a further cut in coronavirus vaccine deliveries, the country's COVID-19 special commissioner Domenico Arcuri said."

https://au.finance.yahoo.com/news/italy-considers-legal-action-over-140511169.html

SBB = dividend shares 1 treasury share for every 45 shares held, if we judge from the last 2 quarters.

"tgahchai they dun tink of cut loss? still die die pay interest everyday to epf?"

My belief is that they are waiting for something. Likely they are trying to procure the necessary amount of shares for them to launch one last attack on the share price before closing their short position.

According to my calculations, the short seller bought back about 10.95 million shares on Monday and Tuesday. I believe they are using these shares in their shorting exercise over the last 3 days. They used up 2 million shares on Wednesday, and 3.1 million on Thursday. They have already used more than 3 million today, so they are left with approximately 2.85 million more from this batch.

Unless they find someone who could lend them more shares (the belief is that they haven't been able to find anyone to do that recently), they might be in a major trouble.

BTW something funny:

https://klse.i3investor.com/blogs/bursainvestments/2021-01-22-story-h1540099215-Gloves_and_the_United_States_Something_Funny.jsp

ahpooki2, they've already opened the short positions at very low market prices, so they have no choice but to try and suppress the prices. Otherwise the loss will become even bigger.

"DarenWai Ben Tan. This means they are losing right since the price still going up?
Anyway, i thought a better strategy is wait for not much buyer then only short. Thanks"

Yes, the short seller is currently in a massive losing position, to the tune of RM200 million as of right now.

DarenWai, the shorting happens at very strategic times. It happens when big buy queues are created in order to curb the upward momentum. This has been happening consistently over the past 3 weeks.

Water Fish Burger (水鱼哥哥）, the daily figures on shorting are released around 8pm on the same day here: https://www.bursamalaysia.com/market_information/market_statistic/securities

Shorting up to now for the day:

Top Glove: 2,263,100 shares shorted (8% of total volume for the day)
Harta: 167,100 shares shorted (4.5% of total volume for the day)
Kossan and Supermax: 0

goldenluck16, tylee81, CJkenho, thank you once again for your comments.

tylee81 and CJkenho, my opinion is that like us, the local IBs are currently in a waiting position. They are waiting to see what the short seller is going to do next. On January 4, when the short seller unloaded the largest amount of sales, the prices plummeted. If such a thing happens again, that would be an incredible buy opportunity. Everyone likely has their guns loaded for when/if that happens.

This is the actual presentation:
https://www.topglove.com/App_ClientFile/7ff8cb3f-fbf6-42e7-81da-6db6a0ab2ef4/Assets/IR%20Presentation/TG%20Website_English_190121.pdf

SteadyT, basically these are rock bottom market valuations right now. As I've said elsewhere, the price can pretty much only go upwards from here. However, if it will happen tomorrow, next week, or next month, might be a bit harder to say.

What is certain is that the short selling pressure should be over by the beginning of February at which point the bigger part of the short position will have to be closed, which of itself will result in the prices going up.

bullpiano, I replied to your comment here:
https://klse.i3investor.com/blogs/bursainvestments/2021-01-16-story-h1539380474-Is_the_Big_Gloves_Short_Over.jsp

The small figures for Jan 4th, 5th, 7th, 8th, and most likely 14th, are not related to the big short. They are probably retail positions or other type of positions. As mentioned in the article, probably about RM3 million in value does not belong to the big short position, but to other small/retail short positions. However, yes, there has been some closing of short positions. The following are the amounts for each of the 4 counters:

19 January - 5,955,218 TG shares bought back
19 January - 1,000,000 Kossan shares bought back

18 January - 5,000,000 TG shares bought back
18 January - 3,000,000 Kossan shares bought back

15 January - 1,770,145 Kossan shares bought back

11 January - 3,680,900 TG shares bought back

No closing of short positions on Supermax or Harta has been observed so far.

tylee81, if the short seller has to pay the dividend to the borrower of shares, that's pure loss. Currently they sit on massive paper losses, but these are still just paper losses.

bullpiano, the small figures for Jan 4th, 5th, 7th, 8th, and most likely 14th, are not related to the big short. They are probably retail positions or other type of positions. As mentioned in the article, probably about RM3 million in value does not belong to the big short position, but to other small/retail short positions. However, yes, there has been some closing of short positions. The following are the amounts for each of the 4 counters:

19 January - 5,955,218 TG shares bought back
19 January - 1,000,000 Kossan shares bought back

18 January - 5,000,000 TG shares bought back
18 January - 3,000,000 Kossan shares bought back

15 January - 1,770,145 Kossan shares bought back

11 January - 3,680,900 TG shares bought back

No closing of short positions on Supermax or Harta has been observed so far.

Anthem2, the announcement say that the acquisitions are via "TS Dr Lim WC (L) Foundation", so I assume it's a sort of a foundation set up by LWC to reward the founders of the company. It's a really small amount (0.00001% of the company stock), so it's truly immaterial.

DickyMe, thank you for letting me know. This information is truly immaterial to the earnings potential of any of the big glove manufacturers.

lkoky, if the figures show net buying, this may still mean that some of the older short positions have been closed - as has been the case with Kossan last Friday, and this week on Monday and Tuesday so far (we have no up-to-date data for Wednesday).

SteadyT, tylee81, Anthem2, thank you once again very much for your comments.

SteadyT, yes, that might be one of the reasons for why the attack on Supermax is not as massive. However, I believe the more important reason is that institutional investors don't have as large positions in Supermax's stock, as they do on TG, Harta, or Kossan. EPF and KWAP are not among the top 25 shareholders of Supermax, and the 25th (RHB) holds only 0.28% of the stock.

tylee81, I think the short seller will close their position long before the release of TG's quarterly results in March.

Anthem2, certainly right now would've been the best period for such a short attack. The only thing that disrupted the plans was MCO2.0