Shares of Sri Trang Gloves PCL (STGT), a subsidiary of Sri Trang Agro PCL (STA), reached its lowest point at 74.50 baht on Thursday (11:51 a.m.), decreasing by 13.12 per cent or 11.25 baht from its prior price.
An analyst from UOB Kayhian Securities said in their research that the shares of the rubber industry have seen an effect from positive news of a COVID-19 vaccine in Russia.
Gamaleya Institute in collaboration with the Defence Ministry and the Russian Direct Investment Fund (RDIF) developed the vaccine.
It is said to be undergoing Phase 3 of trials which is the final stage. However, the World Health Organization (WHO) database lists the vaccine as still being in Phase 1.
After rubber glove groups contracted by 10 per cent on Wednesday in Malaysia, UOB analyst suggests investors should beware of volatility in STGT and STA shares prices.
The rubber gloves industry had an increase in product demand and gained extraordinary profits since February when the COVID-19 pandemic began to interrupt the economy, resulting in market price fluctuations up to 3-5 times.
Demand for the gloves still remains unabated as the second wave of COVID-19 hits globally.
Not long ago, the key shareholders of STA sold their holdings in STA which has kept STA share prices under pressure while STGT continues to rise.
The disparity in performance between STA and STGT is likely to increase further. STGT has the potential of rising by 25-30 per cent from current levels over the next 3-5 months.
However, on Thursday, Asia Wealth Securities selected STGT and STA as stocks that are expected to deliver outstanding performances.
STGT shares stood at 76.00 baht per share after morning trade closed at 12:30 p.m. on Thursday, dropping by 9.75 baht or -11.37 per cent. Meanwhile, STA shares were 26.00 baht per share, decreased by 1.50 baht or -5.45 per cent.
