Shares of Top Glove Corp Bhd declined sharply following news of 28 factories being closed in stages to screen workers after a significant increase in Covid-19 cases among them.
As of 10.30am, Top Glove shares fell 48 sen to RM6.87 with 40.65 million shares traded.
The decline also caused the FBM KLCI benchmark index to fall by 7.74 points from a total decline of 9.64 points.
Meanwhile, Hong Leong Investment Bank (HLIB) Research analyst, Farah Diyana Kamaludin said, she expects a decrease in revenue for Top Glove by 5.6% for the financial year ended 31 August 2021 (FY21).
Farah Diyana also lowered the Top Glove target price to RM10.38 from RM10.95 previously. He also maintained a 'buy' recommendation on the company's shares.
Senior Minister (Security Cluster), Datuk Seri Ismail Sabri Yaakob yesterday said, a total of 28 factories will be closed in stages after 1,884 Top Glove employees were confirmed positive for COVID-19.
The government had previously announced the implementation of the Tightened Movement Control Order (PKPD) at the glove company's foreign workers' hostel starting Nov 17 last year to curb the spread of Covid-19.
According to analysts as quoted by Bernama as saying, the closure of the world's largest rubber glove factory is expected to cause a shortage of glove supply due to the increase in Covid-19 cases globally.
"Although plans for vaccines have been made, the current situation has caused the demand to be high until the end of this year. Reducing production will result in the company being under pressure for at least two weeks, ”he said.
