It does look like latex price won’t be going anywhere for now. The commodity has of late been locked between RM8.61/kg (recent low) to about RM11.00/kg (its all-time high).
This price band is attributed to a clash between 2 factors, namely heavy rain and severe floods in southern Thailand resulting in a scarcity of latex supply, being offset by Weaker Japanese auto sales after the devastating earthquake created an auto parts shortage that will dampen tire demand.
Share prices of Top Glove, Supermax and Kossan have remained above their recent lows, a sign that the anticipated selldown in the earlier months has been well absorbed.
OSK maintain Overweight on the sector with top picks still remain Top Glove, Supermax and Kossan. The risk is if the oil price shoots past its record high of USD147/barrel on the continuing turmoil in the Middle East which will likely cause the prices of all commodities to spike up, including that of latex.
Below are the target prices and ratings for selected rubber glove stock.
|Stock||Price (RM)||Target (RM)||Market Cap (RM million)||Rating|
Source : OSK Research
how about RIVERSTONE in SGX ?
That counter not covered by OSK Research.