Anand Pathmakanthan said this will be a fantastic year for glove stocks and he expects the average selling price (ASP) for gloves to remain on an upward trend, with waiting time for orders being between 12 and 15 months considering the order backlog.

“I think we are quite confident in terms of our earnings’ numbers,” he said, forecasting a high dividend yield.

Investors have been predicting that the vaccinations and the recovery from the pandemic would reduce the purchase of stocks benefitting from the pandemic, such as rubber gloves.

Anand, however, said these stocks were expected to face some pressure in terms of demand and ASP.

“Our view is that this (perception) is misplaced. You should definitely keep some glove stocks in your portfolio,” he said, during a forum on the 2021 market outlook organised by Maybank Kim Eng.

Anand, who is head of equity research at Maybank Kim Eng, said it would take a while before herd immunity could be achieved with the Covid-19 vaccines.

“In that scenario, we don’t expect glove demand to fall off dramatically. If at all, we think the demand will remain strong.

“Where we are a bit more cautious is supply – there is a lot of supply coming on stream in 2022, not just in Malaysia, but also in China in particular. That will probably put some pressure on ASP.”