Glove sector hit by soft demand and higher costs
BIMB Securities Research cautioned that the second half of 2025 will likely see flat sales volumes and stagnant average selling prices.
PETALING JAYA: The outlook for Malaysia's rubber gloves sector is not looking very positive at the moment, according to BIMB Securities Research.
In a report, it cautioned that the second half of 2025 (2H25) will likely see flat sales volumes and stagnant average selling prices (ASPs).
'ASPs are expected to show minimal improvement, remaining flat amid global oversupply and persistent price undercutting by Chinese glove manufacturers in non-US markets,' the research house said.
Adding to the pressure, Chinese companies are relocating parts of their production to South-East Asia – Indonesia, Vietnam and Cambodia – to circumvent tariffs while maintaining cost competitiveness.
Given this competitive landscape and weak US demand momentum, the research house said meaningful price recovery appears unlikely.
After frontloading activities by US customers in January and February, BIMB Securities Research said order volumes have since slowed amid inventory buildup.
'Looking ahead to 2H25, we anticipate only a small increase in demand as customers remain cautious amid ongoing tariff uncertainties,' the research house said.
It said minimum wage hikes have raised labour costs, and despite easing natural gas prices, profitability remains fragile.
With that, the research house has maintained its 'neutral' call on the sector, citing structural issues and global trade uncertainties, with limited upside catalysts.
'We have a 'hold' on Hartalega Holdings Bhd , Kossan Rubber Industries Bhd and Top Glove Corp Bhd and 'non-rated' for Supermax Corp Bhd ,' it added.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
New Straits Times
an hour ago
- New Straits Times
South Korea's KOSPI tops 3,000 for the first time since early 2022
SEOUL: South Korean shares rose above the 3,000 mark for the first time since January 2022 and were set to log their fourth weekly gain after newly-elected President Lee Jae Myung announced a stimulus spending plan. Expectations are that more such plans are potentially in the works. The won strengthened, while the benchmark bond yield rose. The benchmark KOSPI was up 25.02 points, or 0.84 per cent, at 3,002.76 as of 0155 GMT. For the week, the index is up 3.75 per cent. South Korea's new administration proposed on Thursday US$14.7 billion of extra government spending to support sluggish domestic demand, as President Lee makes economic recovery his top policy agenda. Among index heavyweights, chipmaker Samsung Electronics rose 0.51 per cent, while peer SK Hynix gained 2.85 per cent. Battery maker LG Energy Solution climbed 2.58 per cent. Hyundai Motor and sister automaker Kia Corp were unchanged and down 0.10 per cent, respectively. Steelmaker POSCO Holdings was flat, while drugmaker Samsung BioLogics rose 1.70 per cent. Of the total 936 traded issues, 450 shares advanced, while 435 declined. Foreigners were net sellers of shares worth RM688,000. The won was quoted at 1,371.1 per US dollar on the onshore settlement platform, 0.63 per cent higher than its previous close at 1,379.8. In offshore trading, the won was quoted at 1,371.4 per dollar, up 0.40 per cent on the day, while in non-deliverable forward trading its one-month contract was quoted at 1,368.6. The KOSPI has risen 25.14 per cent so far this year. The won has strengthened 7.40 per cent against the dollar so far this year. In money and debt markets, September futures on three-year treasury bonds lost 0.01 point to 107.07. The most liquid three-year Korean treasury bond yield rose by 1.8 basis points to 2.49 per cent, while the benchmark 10-year yield rose by 0.8 basis points to 2.89 per cent.
The Star
an hour ago
- The Star
South Korea's Cabinet approves universal cash grant amid controversy
SEOUL: President Lee Jae Myung convened a Cabinet meeting on June 19 and approved a 15.2 trillion won (US$0.011 trillion) budget allocation for a handout of cash-equivalent vouchers to all South Koreans to boost consumption amid growing recession fears. The move came just hours after Lee returned from a three-day trip to Canada. The liberal president reviewed the spending package, which the government says is aimed at reviving the sluggish consumer demand that has left many small business owners on the brink of collapse. 'Now is the time to use the state budget, given the gravity of the pain ordinary people are suffering,' Lee said during the meeting. Stressing a pressing need to stimulate the national economy, Lee said, 'If you spend money for some reason, I think the benefits should at least be enjoyed fairly by the people.' The one-off universal cash-equivalent payout will amount to at least 150,000 won to all South Koreans. Those who cannot afford basic living expenses due to extreme poverty and inability to get a job would be eligible for 400,000 won, while those categorised as 'near poor' in South Korea will receive 300,000 won. In addition to the above, people in the bottom 90 per cent of the income bracket will each receive an additional 100,000 won. Second Vice-Finance Minister Lim Ki-keun estimated some 13 trillion won in consumption was anticipated. However, Seoul's move to dole out a universal cash handout to all South Koreans regardless of age, gender and income level has triggered criticism. Ho Jun-seok, spokesperson of the conservative opposition People Power Party, said in a statement on June 19 that the cash handout scheme 'sparks criticism that Lee was rewarding (voters) for the election victory'. He also expressed concerns that such a universal payout scheme could lead to the birth of populism in South Korea. 'A supplementary budget to boost the economy would be necessary, but it is uncertain that spreading money to people could lead to an economic rebound,' he said. In 2020, as South Korea was hit hard by the Covid-19 pandemic, former liberal president Moon Jae-in's administration extended cash coupons to households to shore up domestic consumption, starting in May 2020. However, not everyone was subject to the payout scheme. Only those who belonged to the bottom 70 per cent of the income bracket were eligible for the state subsidies. Back then, a household of four people or more was eligible for one million won for all household members combined, while three-person households received an 800,000 won payout. Single-person households received 400,000 won in support and two-person households got 600,000 won. The Moon administration later in September rolled out an additional batch of vouchers for freelancers, family with non-adults and small business owners, among others. Asked whether the scheme would cover foreign nationals in Korea, a Finance Ministry official said: 'Foreigners are not currently included, but exceptions could be made through task force discussions. The specific recipients will be finalised through those discussions.' About a decade ago, Lee, as the mayor of Seongnam in Gyeonggi Province, sought to introduce plans to offer school uniforms to students for free, install a facility for free postpartum care services and introduce a basic income for young people. Such plans hit a snag as Gyeonggi province opposed Seongnam's plan, and the litigation had been ongoing until Lee was elected the governor of Gyeonggi Province in 2019. As the chair of the then-main opposition party while disgraced former President Yoon Suk Yeol was incumbent, Lee led a 13 trillion won proposal to allow all citizens to receive 250,000 won in August 2024 despite government opposition. The Bill was then vetoed by Yoon, and Parliament was unable to override the presidential veto. The budget proposal on June 19, as part of the 30.5 trillion won supplementary budget, will be submitted to the National Assembly for final approval on June 23. A day before, Lee is scheduled to hold talks with leaders of major parties, including Kim Byung-kee, floor leader of the ruling Democratic Party of Korea; Kim Yong-tae, interim leader of the main opposition People Power Party and its whip Song Eon-seog, at his official residence in Yongsan-gu, Seoul, according to his senior political secretary Woo Sang-ho on June 19. A budget Bill requires at least half of the votes of lawmakers present at the plenary session to be passed, while at least half of all lawmakers must be present at the voting session. Out of all 298 lawmakers, 167 are members of the ruling Democratic Party. South Korea's 2025 annual budget was confirmed to be 673.3 trillion won in December. Upon parliamentary approval, the extra budget spending package would follow a 13.8 trillion won budget scheme aimed at supporting regions affected by massive wildfires in March and tackling uncertainties posed by US tariff threats. The Bill gained Cabinet approval in mid-April and the parliamentary green light in early May. - The Korea Herald/ANN
The Star
an hour ago
- The Star
Tiny homes for young urbanites draw criticism over livability
JAKARTA: The government's proposal to develop compact, subsidised housing for urban youth is facing growing criticism from both experts and potential occupants, who say the poor design and cramped living conditions of these 'mini houses' could jeopardise their inhabitants' physical and psychological well-being. The Public Housing and Settlements Ministry last week showcased two prototype units at Lippo Mall Nusantara in South Jakarta. The homes, which are slated for development in Jakarta and the surrounding cities of Bekasi, Bogor, Depok and Tangerang in partnership with real estate giant Lippo Group, have a starting price of Rp 100 million (US$6,121) and can reach up to Rp 140 million, depending on location and size. The single-bedroom unit measures just 14 square metres and sits on a 25 sq m plot, featuring a living room and a bathroom, while the larger double-bedroom unit offers 23.4 sq m of floor space on a 26.3 sq m plot that includes a living room and two bathrooms. Each unit also comes with a carport nearly as large as the living area. 'These smaller homes aim to attract young people, particularly Gen Zers who wish to [live] closer to their workplace [in] minimalist and affordable homes in urban areas,' Urban Housing Director Sri Haryati said on Monday (June 16). However, critics say the mini houses fall far short of acceptable standards and could do more harm than good. Observers have noted that their design lacks basic features such as proper lighting and ventilation, key elements of livable housing. These compact units also appear to violate existing regulations. Under a 2023 decree of the Public Works and Housing Ministry, a subsidised house must occupy a 60-200 sq m plot and its minimum building area must cover 21 sq m. They also fail to meet the international standards of the United Nations Human Settlements Programme (UN-Habitat), which require a living area of at least 30 sq m per house. 'This proposal represents a step backward in the fulfillment of the right to a decent home,' Tulus Abadi, chairman of the Indonesian Empowered Consumers Forum (FKBI), said in a statement received on Tuesday by The Jakarta Post. 'A house is not just a shelter. It is a space that supports physical health, emotional stability, family life and overall well-being.' Tulus added that such tiny homes were unsuited to long-term human habitation, as they did not have the capacity to accommodate the evolving needs of growing families. Eventually, their occupants might abandon them, leaving behind empty dwellings and deteriorating neighborhoods. The FKBI has urged the government to abandon its plan to build mini houses and instead focus on developing affordable, livable vertical housing, especially in space-constrained urban areas like Greater Jakarta. 'We don't need cheap homes that diminish the human spirit. We need decent housing that upholds dignity,' Tulus said. 'Don't chase the target of three million homes at the expense of basic human values.' A draft ministerial decree leaked at the beginning of June revealed a proposal to downsize subsidised homes from a minimum 60 sq m plot to just 25 sq m and a minimum 21 sq m building area to 18 sq m. Sri Haryati defended the proposed size reduction, saying it aimed to address the national housing backlog of 9.9 million units, 80 percent of which were in urban areas. The proposed downsizing was previously questioned by the public housing task force led by presidential adviser Hashim Djojohadikusumo, who is also the younger brother of President Prabowo Subianto. On Tuesday however, housing minister Maruarar 'Ara' Sirait said he had explained the plan to Hashim, whom he described as 'really helpful' to the programme. For Rahma, a university student who lives in Depok, owning such a tiny home is simply not viable. 'I saw the display [unit], and I couldn't even imagine stretching out comfortably in it,' she told the Post on Monday. Rahma added that she would rather spend more money to rent a larger space than live in something that could harm her physical and mental health. A 2024 survey by consulting firm Inventure Indonesia found that two out of three Gen Z respondents expressed pessimism about the prospect of buying a house in the next three years, citing soaring real estate prices as the biggest obstacle. Urban planning experts say the government's housing policy is driven by market logic rather than living needs. Anwar Basil Arifin, head of research at Menemukenali Project, a media platform focusing on urban advocacy, said the government should prioritise house designs that met health and safety standards that were also easy to navigate. Speaking on Sunday at the Jakarta Future Festival 2025, which ran from June 13 to 15 at Taman Ismail Marzuki in Menteng, Central Jakarta, Anwar highlighted that the key to the city's housing strategy was transit-oriented development. 'Jakarta's housing crisis isn't just a market failure, it is a crisis of urban design and imagination,' he said. - The Jakarta Post/ANN
