Singapore Gloves Sector - Maybank Kim Eng 2016-03-15: Top Glove’s SGX listing could bring excitement to Singapore

Singapore Gloves Sector - Maybank Kim Eng 2016-03-15: Top Glove’s SGX listing could bring excitement to Singapore RIVERSTONE HOLDINGS LIMITED AP4.SI  UG HEALTHCARE CORPORATION LTD 41A.SI 

Singapore Glove Sector - Top Glove’s SGX listing could bring excitement to Singapore 


World’s largest glovemaker to list on SGX 

  • 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. 
  • 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. 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 Maybank Kim Eng | http://www.maybank-ke.com.sg/ 2016-03-15
Maybank Kim Eng SGX Stock Analyst Report BUY Maintain BUY 1.18 Same 1.18
BUY Maintain BUY 0.52 Same 0.52


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