Aspen hits record high amid proposed foray into glove making

Singapore

AMID a recent trading surge following a proposed move into glove manufacturing, Aspen on Monday saw its shares soar 80.5 per cent or 16.5 cents to an intraday high of 37 Singapore cents - a record since its initial public offering in July 2017.

Aspen shares started their surge shortly after the market opened on Monday and were among the most heavily traded, prompting a query from the Singapore Exchange (SGX) just under an hour later.

The counter closed at 33.5 Singapore cents on Monday, up 63.4 per cent or 13 cents, and was the second most traded on the bourse with 162.7 million shares changing hands.

In its response to SGX after market close, Aspen said it was not aware of any information not previously announced concerning the company, its subsidiaries or associated companies which might explain the trading.

The Malaysian firm said the increase in trading might have been caused by its Aug 12 announcement on its plans to diversify its property business to include the manufacturing and distribution of rubber gloves.

"Since the release of the announcements, the company has been proceeding in accordance with the business plan for the proposed new business as detailed in the announcements," Aspen said. It added that further details on the proposed diversification and proposed new business will be set out in a circular to be issued to shareholders in due course.

If the proposed diversification is approved, Aspen may be entering a sector seen to have high entry barriers.

Speaking generally on the glove manufacturing industry, CGS-CIMB analyst Ong Khang Chuen said aside from manufacturing facilities which will generally take one to 1.5 years to set up, companies looking to enter the sector need to obtain various certifications or accreditations from government agencies and customers. "Operating efficiency-wise, established players have also built up barriers to entry through their continuous investments in automation, as well as higher economies of scale," he said.

Aspen plans to convene the extraordinary general meeting on the proposed diversification on Sept 18, or in any event not later than Sept 30.

In its Aug 12 announcement, Aspen said it acquired a dormant company called Aspen Glove Sdn Bhd from its president and chief executive Murly Manokharan, in connection with the proposed diversification. Aspen Glove on Aug 12 accepted a binding letter of offer from Kulim Technology Park Corporation to lease a piece of industrial land. It also entered into a memorandum of understanding with state government-linked company Invest Kedah to provide the necessary support and facilitation for the establishment and operation of the proposed new business.