The week that was - Gloves, airlines, Dow Jones

Top Glove HQ

Gloves off

SHARES in Top Glove Corp Bhd buckled this week as the company’s sprawling manufacturing site in Klang, Selangor was put under enhanced movement control order (EMCO) for two weeks since Nov 17 following a surge in new Covid-19 cases.

Top Glove said the temporary closure, affecting 28 facilities that accounted for 50% of its total annual production capacity of 90 billion pieces, will be done in stages to allow all its workers to get tested.

The company expected the stoppages to cause delivery delays to customers and forecast a 3% hit on its revenue for the year ending Aug 31,2021 (FY21).

Shares in Top Glove have fallen 28% from its Oct 19 peak of RM9.60 to RM6.92 at mid-day yesterday.

Meanwhile, shares of other glove manufacturers were also under pressure this week as the progress in the development of Covid-19 vaccines reduced investors’ appetite for protective gear makers.

Top Glove’s chairman Tan Sri Lim Wee Chai told reporters on Wednesday that he expected demand for examination gloves to double when the vaccines are ready by year-end.

“Examination gloves are needed to inject vaccines. The world needs to produce seven billion vaccines and will need seven billion pairs of gloves, ” he said.

Airlines face deeper losses

AIRLINES around the world will lose a combined US$157bil in 2020 and 2021 to the Covid-19 pandemic, according to the latest projection by the International Air Transport Association (IATA).

The losses are almost 60% more than what it had forecast in June and five times the deficit racked up during the 2008-2009 recession.

IATA on Tuesday called the crisis “devastating and unrelenting.”

The forecast comes as airlines cling to hopes that passenger-testing combined with the roll-out of Covid-19 inoculations next year will spur governments to ease travel restrictions.Separately AirAsia Group, posted a net loss of RM851mil in the three-month ended Sept 30, as nine-month losses widened to RM2.66bil.

Despite the massive deficit, the budget carrier remained confident about its ability to emerge stronger next year.

“While we are hopeful that lockdowns and border restrictions will soon be lifted, we are prepared to maintain sustainable operations solely on the back of our domestic sectors into 2021 if restrictions remain, ” it said.

Dow Jones tops 30,000 points

THE Dow Jones Industrial Average (DJIA), the world’s most widely-watched stock market barometer, topped 30,000 points for the first time on Tuesday.

The DJIA had risen by about 11% in November, as the market look beyond the current Covid-19 pandemic with progress in the development of vaccines buoyed investors’ buying mood.

Tesla, which is set to be added to the S&P 500 next month, surged to a record high and is now worth more than US$500bil. Tesla CEO Elon Musk is worth as much as Bill Gates.

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