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Top Glove's continued slide heightens KLCI removal risk



KUALA LUMPUR (Nov 6): Top Glove Corp Bhd lost some ground again today. The world's largest glove maker's share price fell 2.89% or 13 sen to RM4.37, wiping out another RM332.78 million from its market capitalization on concerns that it might lose its FBM KLCI constituent status.

This means the stock has lost 3.32% or 15 sen in the past two days – it slipped 2 sen on Tuesday, trimming RM51.2 million from its market cap that day, bringing the total erased market value to RM383.97 million. The downtrend has further increased the risk of its removal from the benchmark index.

A quick check of the largest companies on Bursa Malaysia in terms of market cap shows that Top Glove is now at the 35th spot.

The FTSE Russell is expected to announce its review of the FBM KLCI late next month. Based on FTSE Russel's rules, a stock would be included as a component of the KLCI if its market capitalization is at 25th place or above, while one would be removed if it falls to the 36th spot and below.

Among the highest-ranking non-constituents of today's market capitalization index are: Westports Holdings Bhd (28th), KLCCP Stapled Group, comprising KLCC Property Holdings Bhd and KLCC Real Estate Investment Trust (29th), Telekom Malaysia Bhd (30th), Fraser & Neave Holdings Bhd (32nd), QL Resources Bhd (34th).

In a note on Nov 4, AllianceDBS Research Sdn Bhd analyst Quah He Wei wrote that Top Glove Corp Bhd is at risk of being removed from the FBM KLCI if the rubber glove manufacturer's share price deteriorates further.

"It (Top Glove) is currently ranked 35th by market capitalization and will be automatically removed if it falls to 36th or below during the review.

"The semi-annual review of the (30) KLCI constituents will take place in December 2019, based on [the stocks’] closing prices on Nov 30, 2019, "Quah added.

On September 26, Top Glove said its net profit fell 12.7% yoy to RM370.56 million for the full year ended Aug 31, 201 9 (FY19) versus RM424.36 million, despite a 13.8% rise in revenue to RM4.8 billion from RM4.22 billion a year ago.

Top companies based on market capitalization as at Nov 6,2019

CompanyMarket Caps (RM, Bill)
1MALAYAN BANKING BHD97.92
2TENAGA NASIONAL BHD79.16
3PUBLIC BANK BERHAD76.87
4PETRONAS CHEMICALS GROUP BHD60.80
5CIMB GROUP HOLDINGS BHD51.75
6IHH HEALTHCARE BHD48.61
7MAXIS BHD42.39
8AXIATA GROUP BERHAD39.25
9HONG LEONG BANK BERHAD36.98
10DIGI.COM BHD36.62
11MISC BHD36.60
12NESTLE (MALAYSIA) BERHAD34.38
13SIME DARBY PLANTATION BHD34.35
14PETRONAS GAS BHD32.49
15IOI CORP BHD27.84
16PPB GROUP BERHAD26.00
17HAP SENG CONSOLIDATED24.65
18KUALA LUMPUR KEPONG BHD23.77
19PETRONAS DAGANGAN BHD23.54
20GENTING BHD23.18
21RHB BANK BHD23.10
22HONG LEONG FINANCIAL GROUP19.70
23DIALOG GROUP BHD19.34
24PRESS METAL ALUMINUM HOLDIN19.18
25GENTING MALAYSIA BHD18.49
26HARTALEGA HOLDINGS BHD18.28
27SIME DARBY BERHAD15.51
28WESTPORTS HOLDINGS BHD14.66
29KLCCP STAPLED GROUP14.44
30TELEKOM MALAYSIA BHD14.20
31MALAYSIA AIRPORTS HLDGS BHD14.10
32FRASER & NEAVE HOLDINGS BHD12.95
33AMMB HOLDINGS BHD12.18
34QL RESOURCES BHD11.84
35TOP GLOVE CORP BHD11.19

Source: Bloomberg

See also:
Top Glove at risk of being removed from KLCI – AllianceDBS


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