Kenanga maintains rating on rubber gloves
Kenanga Research has maintained its 'overweight' rating on the rubber gloves sector on the back of overall resilient demand for rubber gloves led by latex gloves.
"We believe the sector will remain resilient and be further re-rated moving into the fourth quarter of this year, driven by the weakening of the ringgit against the US dollar, which is positive to rubber glove players and the sustained low raw material prices.
"In our view, we believe the ramp-up of production capacity, mainly for nitrile gloves among local players is expected to be well absorbed and hence, unlikely to cause an oversupply situation till year-end," it said in a research note today.
Kenanga Research's top pick for the sector is Kossan Rubber Industries Bhd, with a 'outperform' rating and a higher target price of RM7.86.-- Bernama