Overseas Funds Are Loving Malaysia Glove Stocks Again After Selloff

(Bloomberg) -- Overseas investors are using the rout in Malaysian glove makers to return to last year’s stock market stars.

Top Glove Corp. and Supermax Corp. are among the top three stocks on the buy list of foreigners this year through April 2, attracting net inflows of 1.4 billion ringgit ($340 million), according to CGS CIMB Research. Global funds bought a net 189.9 million ringgit of Press Metal Aluminium Holdings Bhd., the brokerage said in a report.

Glove makers’ shares were one of Asia’s hottest pandemic trades for much of 2020 before the rollouts of vaccines around the world weakened their appeal and became targets of short sellers. The three biggest glove stocks, including Top Glove Corp., are the worst performers in Malaysia’s benchmark equity gauge this year.

Top Glove and Supermax have slid more than 50% from their October peaks, dragging valuations to rock bottom levels. Top Glove trades at about six times forward 12-month earnings, versus its one-year mean of 15.3 times. Supermax is priced at 3.8 times versus its average of 15 times, data compiled by Bloomberg show.

In contrast, Press Metal’s stock is the top gainers on the main index as its focus on environmental, social and governance practices has made it a favorite among investors.

©2021 Bloomberg L.P.