Top Glove set to grab momentum of Covid boom for $1.9bn listing 

Malaysian glove manufacturer set to push ahead with Hong Kong listing despite US sanctions over allegations of forced labour practices and post-pandemic recovery’s impact on demand 

by Sean OMeara
Top Glove advised to grab momentum of Covid sales boom for $1.9bn listing 
Top Glove's sales were boosted by the Covid-19 pandemic but the company also suffered an outbreak itself with 5,000 infections and one death. Photo: Reuters

Malaysian rubber glove manufacturer Top Glove is hoping to ride the wave of its Covid-fuelled sales boom for its $1.9 billion Hong Kong listing before US sanctions and vaccinations make the deal possibly less attractive.

Observers say the unknown pace of nation’s vaccination programmes mean the world's largest medical gloves maker could still command a higher price for its stock – but it would have to happen sooner rather than later.

But bosses at Top Glove Corp, announcing the plan on Friday, talked up their post-pandemic sales claiming they could exceed pre-pandemic levels.

Read more: India gains global sway with its vaccine diplomacy

The bullish stance comes even as Citigroup Inc and UBS Group AG opted out of working on the deal in the wake of the US sanctions on Top Glove over allegations of forced labour practices.

Top Glove's sales benefited greatly from the Covid-19 pandemic but the company also suffered an outbreak itself with 5,000 infections, one death and a rebuke from investors including BlackRock Inc.

With vaccination programmes underway worldwide, analysts foresee the end of the supernormal cycle for the medical gloves industry, pointing to potential over-capacity and rising costs.


Those concerns have rendered Top Glove stock Malaysia's most shorted. Short interest is at 2.69% of its share capital and 4.2 days of average daily trading volume.

"The company might find it difficult to attract new investors to the Hong Kong offer unless they offer HK shares at a significant discount to the market price due to bad press coverage," said LightStream Research analyst Oshadhi Kumarasiri.

"But at the end of the day, if it's offered at a substantial discount to the market price, it won't be that hard to find subscribers."


Top Glove was in talks with Citi, UBS and China International Capital Corp (CICC) to manage the listing.

Citi and UBS opted not to sponsor the deal late last year due to heightened concerns about Top Glove's rubber farming processes and the risk of working with a US sanctioned company, sources said.

US Customs in July sanctioned imports from some Top Glove subsidiaries, whose sales make up 12.5% of the firm's sales, after finding evidence of forced labour practices. Top Glove has said it is improving factory and workers' living conditions.

  • Reporting by Reuters

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