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Trump’s Tariff Threat Drives Investors Toward India, Japan Stocks

Donald Trump’s election victory has shifted investor interest to India and Japan due to concerns over potential tariffs on Chinese goods, which could reach up to 60%. Morgan Stanley has reiterated its preference for India and Japan stocks over China, as India is seen as a manufacturing alternative with a domestic-driven economy, offering relative immunity to global risks. Meanwhile, Japanese stocks stand to gain from higher U.S. interest rates, which may weaken the yen and benefit Japan’s exporters. Supply chain shifts away from China also support investment in India, Japan, and Southeast Asia, according to veteran investor Mark Mobius, who noted that India has the labor force to match China’s. Following the election, the MSCI Japan and MSCI India indexes rose over 1.5%, while MSCI China dropped more than 2%. Analysts expect ongoing pressure on Chinese stocks if Beijing’s stimulus efforts fall short, potentially increasing investments in Japan. However, Societe Generale m
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CIMB Optimistic Glove Industry Can Pass On Cost Increases Amid Tariff Changes

CIMB Securities has expressed a positive outlook for the glove industry, despite cost pressures from Budget 2025 measures. These cost pressures arise from higher labour costs, including increased foreign worker levies and a minimum wage hike. However, analysts remain confident that glove manufacturers will pass these increased costs to consumers by raising average selling prices (ASPs).

With labour costs making up around 9% to 11% of total production costs, production costs are estimated to rise by 1.7% to 2.4%. Glove makers are responding by raising ASPs between 5% and 10%, and prices are now between US$21 to US$23 per 1,000 pieces for orders slated for December and January delivery.

A significant tailwind for Malaysian glove manufacturers comes from the upcoming hike in US tariffs on gloves from China. Starting in January 2025, US tariffs on medical and surgical gloves from China will rise from 7.5% to 50%, with further increases to 100% by 2026. This development is expected to shift demand to Malaysian producers, especially from US-based clients, who make up 40% of global glove imports.

Despite intensified competition in non-US markets, CIMB maintains an 'overweight' rating on the rubber glove sector. Hartalega Holdings Bhd and Top Glove Corp Bhd are highlighted as key players, with 'buy' ratings and target prices set at RM3.12 and RM1.25, respectively.

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