Excerpts from analyst's report

Maybank Kim Eng analyst: John Cheong, CFA

Top Glove’s SGX listing could bring excitement to Singapore

World’s largest glovemaker to list on SGX 

handsGloves being producued at Riverstone's factory in Taiping. NextInsight file photo.Top Glove, the world's largest glovemaker by production volume and second by market cap, is planning a secondary listing in Singapore to boost trading liquidity. 

It intends to explore with its substantial shareholder the sale of about SGD20m worth of shares on the SGX. No new shares will be issued. The exercise is expected to complete by 3Q16. 


Neutral impact on Top Glove
Consistent with the view of our Malaysia glove analyst, we think this move will hardly help to boost liquidity for Top Glove as there is already ample liquidity in Malaysia. IHH is a good case in point, its trading volume has remained low in Singapore, since its dual listing in 2012.

johncheong maybank9.14"With Top Glove's secondary listing, we could see more news flow and perhaps more glovemakers listing on the SGX. It makes sense since the glovemakers export globally and Singapore fits in as a widely recognised financial hub and politically stable nation. We maintain our BUY calls on Riverstone and UG Healthcare with TPs of SGD1.18 and SGD0.52." -- John Cheong, CFA (photo)

The beneficiaries will be the investment bankers and perhaps the substantial shareholder that will be selling its stake.

Positive for SGX-listed glovemakers; Maintain Positive
This could pan out well for the Singapore-listed glovemakers, as they are trading at a notable discount of around 25% in terms of forward P/E vs the Malaysia-listed ones, due to lack of understanding, having only a small cluster of glove stocks listed here and less news flow. Malaysia has 7 listed glove stocks vs 2 in Singapore.

Full report here.

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