Malaysian glove makers’ shares hit two-year high on US tariffs

Shares of Malaysia’s rubber glove makers, including Top Glove, surged to a two-year high after US tariff hikes on Chinese goods had unexpectedly boosted their market advantage, the Nikkei Asia reported on Tuesday.

Malaysian investors are particularly concerned about the planned tariff hikes on medical and surgical rubber gloves, which are set to rise from 7.5 per cent to 25 per cent by 2026.

Analysts expect Malaysia to solidify its position in the glove industry due to its abundant natural rubber resources and cost-effective workforce. The US market is vital for Hartalega, with North American sales contributing to half of its revenue in 2023.

Chinese producers have intensified competition, leading to a decline in market share and profits.

The tariffs are expected to narrow the price gap between Chinese and Malaysian gloves in the US market. UOB Kay Hian analysts predict Chinese glove prices will rise to $19-20 per 1,000 units, making Malaysian options more attractive.

Financial institutions are optimistic about Malaysian glove makers. Maybank Investment Bank upgraded Top Glove and Hartalega shares, citing improved profitability by 2026.

China may shift focus to other markets, giving Malaysia a chance to compete effectively. Tariffs offer an opportunity for Malaysian glove makers to regain ground, the report added.