KUALA LUMPUR: Top Glove Corp Bhd shares sank 4.55% in mid-morning trading on Bursa Malaysia today after the US Customs and Border Protection (CBP) directed its personnel at all US ports of entry to begin seizing disposable gloves produced in Malaysia by the company.
At noon, Top Glove lost 23 sen to RM4.82, with 38.04 million shares traded.
In a notice published by the CBP, certain products by Top Glove were found to be manufactured with the use of convict, forced or indentured labour. These include products from all Top Glove subsidiaries.
As a result, the US law enforcement agency can now seize and forfeit all gloves which have entered the US or those that may enter in the future.
AmInvestment Bank Bhd said while glove demand is projected to remain elevated in the next few years, it was unlikely that Top Glove would find viable substitutes for the entire US customer base and this would affect the group’s earnings as glove urgency begins to normalise.
“Additionally, this provides local peers as well as China players such as Blue Sail Medical and Intco Medical with additional bargaining power among US customers,” the investment bank said in a research note today.-FMT