While there are many glove companies globally, Malaysia glove companies contributed to about twothirds of the global glove production (Chester Tay, 2022). Hence, it is relevant to focus on Malaysia glove companies. This study is to understand how the stock market reacted to the company announcements. As such, the sample data will be on the glove companies listed on Bursa Malaysia stock exchange. Sources of Data The research uses secondary data. The stock return for the identified glove stocks is downloaded from the Bloomberg® terminal. In addition, the company announcements were extracted from the Bursa Malaysia’s website. The stocks were initially identified through news reports such as The Star and The Edge Markets Malaysia. From these news reports, a total of 22 Bursa Malaysia listed companies were identified. Sampling There were 15 companies that had no prior business in glove manufacturing that announced plans to venture into the glove industry (herein referred as “non-glove companies”) while the remaining 7 companies that were already in the glove industry (herein referred as “glove companies”) were observed to have announced expansion plans to increase production of gloves or start producing medical-grade gloves. This information is sourced from several news articles (The Edge Market, 2020; The Star, 2020). Subsequently, company announcements related to the information on venturing and expansion of glove business for the years 2020 and 2021 released by these companies were extracted from Bursa Malaysia website. Announcements that were released on the same day as financial results were not included in the sample as the stock return of the companies may also be attributed to the financial results than solely to the announcements of glove business. Originally, the sample was only to include the initial gloverelated announcements. However, such inclusion criteria may understate the importance of other announcements such as status updates on the development of the glove business expansion and diversification exercises. This is because investors may find this information as material for their decision-making. Hence, a total of 367 glove-related announcements were identified by using the content analysis method (Bengtsson, 2016), where the content of the announcements was manually analyzed. Data Analysis The event study methodology is used as one of the most commonly used methods to study stock market reaction following an identified event developed by Eugena Fama (1970). The calculations for this study are aligned with the methodology used by Martins and Cró (2022) in their examination of the stock market reaction to COVID-19-related events within the airline industry. Specifically, they calculated the cumulative average abnormal return (CAAR) within the defined event window period. The primary reason for adopting this method is that similar to Martins and Cró’s study, the dates of company announcements vary, necessitating an approach that accommodates different event dates across companies.

An initial run on the statistical significance of the cumulative abnormal return (CAR) surrounding all the announcements identified in the years 2020 and 2021 were carried out using Microsoft® Excel. The computation of t-statistics (t-test) and p value used the Microsoft® Excel formula. The statistical significance test is at 95% confidence level. The test run discovered that the relationship of most of the announcements in late 2020 and 2021 was not significant to the stock return movement. This could possibly be because investors were already informed of these companies’ plans, and the prices have already reflected all the available information. Another possible reason is because, during this period, the medical glove industry was in an oversupply state. This oversupply state can be attributed to factors such as increased production rate by the existing glove manufacturers, higher competition from new entrants, and the wide-availability of COVID-19 vaccine. Therefore, investors, especially toward the later part of the pandemic, were expecting that the COVID-19 outbreak would be at a more manageable condition than during the beginning of the pandemic. The study then opted to narrow the period to during the height of stock market trading and the beginning of the pandemic when the demand for medical gloves surged due to the intensive effort of managing the high cases of COVID-19. The period chosen is now shorter, beginning from the start of the first MCO until 6 months after, which is March 18, 2020 to September 17, 2020. The MCO was chosen because the business of the companies on Bursa Malaysia stock exchange is usually directly affected by domestic factors. On top of that, with the beginning of the MCO, Malaysians started to adopt “new norms,” that is, a new set of rules and lifestyle that includes rules for businesses to operate. The research sample size has now been reduced to 69 announcements from 11 non-glove companies and 6 glove companies. The list of the companies for this study is in Tables 1 and 2.

Provides hospitality services, inbound and outbound tours, ticketing services as well as tourism-related retail outlets Manufactures automotive batteries Manufactures condoms Manufactures molds, tools/ tooling, dies, jigs and fixtures and car spare parts segment Operates commercial bus

Non-glove

Performs sales and distribution of automobile vehicles

AT Systematization Berhad

Non-glove

Green Ocean Corporation Berhad

Non-glove

Hong Seng Consolidated Berhad Iconic Worldwide Berhad Joe Holdings Berhad Karex Berhad MQ Technology Berhad One Glove Berhad Permaju Industries Berhad Vizione Holdings Berhad Zen Tech International Berhad

Non-glove Non-glove Non-glove Non-glove Non-glove

Non-glove Non-glove

Offers property development, construction, and investment services Provides software development, system integration, and information technology management consultancy and other related professional services

Number of Announcement(s)

(continued)

Company

Glove/Nonglove

Principal Activities

Number of Announcement(s)

Engages in the design, fabrication, installation, testing, and commissioning of glove-dipping lines

Glove

Manufactures latex and nitrile gloves

Glove

Manufactures latex gloves

Careplus Group Berhad Hartalega Holdings Berhad Hextar Healthcare Berhad HLT Global Berhad Kossan Rubber Industries Berhad Supermax Corporation Berhad

Moreover, what was noticeable from the non-glove companies are that all of them are penny stocks counters. Penny stocks is a term often used to label companies with share prices that are trading below RM1.00. These counters are known to have volatile movements, and one of the reasons is because the price to trade these stocks are cheaper than others. Interestingly, 75% of the trades by retail investors in August 2020 was concentrated in companies under the ACE Market and Fledgling Index (Securities Commission Malaysia, 2021) that are companies with relatively lower price. From the list mentioned earlier, three of the glove companies are a part of KLCI components. It can be suggested that being listed on the KLCI index would entail the companies’ higher visibility among investors. The announcements are also categorized according to their type (glove and non-glove companies). The details are available in Tables 2 and 3.

Between March 18 and September 17, 2020, Green Ocean’s stock price ranged from RM0.064 to RM0.326, with daily returns from −17.4% to +50.0%. The company issued three glove-related announcements, mirroring AT Systematization’s strategy. Initially, Green Ocean acquired a gloveinvolved subsidiary, later announcing diversification into gloves and capital raising. Analysis revealed that only Green Ocean’s first announcement significantly impacted the market, whereas subsequent announcements did not. The initial announcement notably uplifted the market, shown by increased postannouncement CAR, displaying market efficiency with similar CAR values on days two and three postannouncement. Conversely, the second announcement lacked significant impact, displaying a mostly positive but statistically insignificant CAR. The third announcement negatively affected the market, with insignificant negative CAR values. Investors viewed the first announcement as crucial for trading decisions, while subsequent announcements lacked material significance, akin to AT Systematization’s pattern, highlighting varying market efficiency levels amid glove industry business diversification.

During March 18 to September 17, 2020, Hong Seng’s stock price fluctuated between RM0.011 and RM0.44, with daily returns ranging from −26.7% to +45.7%. Three glove-related announcements were made. Compared to AT Systematization and Green Ocean, Hong Seng didn’t raise new capital for glove plant construction. Table 7 and Figure 3 display CAR and t-test results. Notably, none of Hong Seng’s announcements elicited a significant market reaction; the t-test confirmed this lack of significance. Despite two announcements with positive CAR, none were significant, implying market inefficiency. The third announcement showed fluctuating CAR (−13.4% to +16.8%), none deemed significant, reaffirming market inefficiency.

During March 18, 2020 to September 17, 2020, Iconic’s stock price fluctuated between RM0.18 and RM0.905, with daily returns ranging from −22.05% to +81.08%. Amid this, the company issued a single announcement on September 2, 2020 regarding its diversification into glove manufacturing. Despite a positive uptrend in the CAR, reaching a peak of +26.6% on T−1, the CAR declined notably by T+2. Notably, all days surrounding the announcement showed positive CAR, except for T−3. However, statistical analysis via t-tests revealed nonsignificant CAR values, indicating an inefficient market response to the announcement, as the stock market did not significantly react.

During March 18, 2020 to September 17, 2020, Joe’s stock price ranged from RM0.064 to RM0.238, with daily returns between −21.01% and +57.62%. Despite lacking glove industry experience, Joe announced plans to diversify into glove production and raise capital, issuing two announcements. Table 9 and Figure 2 depict the CAR and t-test results. The first announcement elicited a significant positive market reaction, reflected in CARs ranging from +35.8% to +62.0%. Subsequent announcements showed insignificant and negative CARs (−11.3% to −3.2%), suggesting they were immaterial for investors. This contrasts with AT Systematization and Green Ocean, emphasizing investors’ perception of the first announcement’s significance for investment decisions in Joe shares.

During March 18, 2020 to September 17, 2020, Karex stock traded between RM0.278 and RM1.153, showcasing daily returns from −15.68% to +44.74%. A singular glove-related announcement, diversifying into glove manufacturing, was made on August 24, 2020. Analysis revealed positive CARs ranging from +11% to +38% on the announcement day and the day before, suggesting potential information leakage. Investors perceived this news as impactful for decision-making, yet subsequent fluctuations indicated market inefficiency post-announcement, highlighting ongoing uncertainty despite positive initial reactions.

During March 18, 2020 to September 17, 2020, MQ Tech’s stock price ranged from RM0.01 to RM0.265, exhibiting daily returns between −33.33% and +83.33%. Despite releasing four glove-related announcements on joint ventures, Table 11 and Figure 7 depict the CAR and t-test results surrounding these announcements. Notably, none of MQ Tech’s glove-related announcements significantly influenced investors’ decision-making. The initial announcement showed a relatively higher CAR until T+3, while subsequent announcements yielded negative CARs (−78.0% to −3.6%), lacking significant market impact. Overall, these announcements were deemed immaterial for investors’ trading decisions in MQ Technology shares.

Between March 18 and September 17, 2020, One Glove’s stock price varied from RM0.04 to RM0.93, with daily returns spanning from −27.27% to +127.66%. Two glove-related announcements were made regarding their foray into glove manufacturing and capital raising. However, Table 12 and Figure 8 depicting CAR and t-test results revealed insignificance in the announcements’ impact on investor decisions. The CAR trend showed negativity pre-announcement (T−3 to T0), turning positive postannouncement (T+1 to T+3). Notably, insignificant CARs (−5.9% to +35.5% and −4.7% to +36.6%) suggest market inefficiency and possible information leakage, indicating an overall lack of significant market reaction to the announcements.

During March 18 to September 17, 2020, Permaju’s stock price fluctuated between RM0.25 and RM0.995 with daily returns spanning −90% to +31.37%. Two glove-related announcements were made. One, about acquiring a new glove-manufacturing subsidiary, elicited a significant positive market reaction, reflected in a CAR between +0.6% and +24.1% on T+2. Although significant from T+1 to T+3, the market inefficiency persisted until T+3. The second announcement regarding a joint venture lacked significant impact, showcasing an insignificant CAR range of −9.9% to +9.5%. Investors deemed the first announcement material but considered subsequent updates immaterial for their decision-making process due to market inefficiencies.

During March 18, 2020 to September 17, 2020, Vizione’s stock price fluctuated between RM0.24 and RM0.54, with daily returns spanning from −12.63% to +23.68%. Two glove-related announcements outlined the company’s intent to acquire a new subsidiary in the glove business. The resulting CAR and t-test (Table 14, Figure 10) revealed insignificance in market reaction to these announcements. The first announcement yielded positive but nonsignificant CAR (+7.6% to +21.8%), suggesting market inefficiency. Conversely, the second announcement generated mostly negative CARs, emphasizing market inefficiency. Overall, the findings suggest the market did not significantly react to either announcement, indicating market inefficiency in processing this information.

During March 18 to September 17, 2020, Zen Tech’s stock price ranged from RM0.01 to RM0.408, with daily returns between −39.29% and 145%. Two glove-related announcements regarding a joint venture were made. Table 15 and Figure 11 display CAR and t-test results around these announcements. Both announcements significantly impacted the market, especially upon release, guiding investors’ decision-making. The first announcement elicited a positive CAR ranging from +34% to +243%, remaining significant until T+3, reflecting market inefficiency. Conversely, the second announcement generated a predominantly negative CAR except at T−3, fluctuating between −88% and +1.7%, with significant values at T0, T+1, and T+3, also showing market inefficiency until T+3.

Glove Companies Careplus Group Berhad (Careplus) Careplus experienced varied stock market reactions to their 16 announcements regarding glove business expansion from March to September 2020. Only six announcements elicited significant stock market responses, with varying degrees of positive and negative CARs. Notably, initial announcements showed mixed reactions, with the first two having negative CARs, the seventh and eighth being positive before turning negative again for the fourteenth and fifteenth announcements. The remaining announcements, while not significant, also had mixed reactions.

During March 18 to September 17, 2020, Hartalega’s stock traded between RM5.104 and RM17.041, showing daily returns from −11.93% to +17.67%. Five expansion-related announcements were made. The CAR and t-test (Table 17, Figure 13) revealed insignificance in the market’s reaction to the first two announcements. However, the third, fourth, and fifth announcements triggered negative and significant CAR, notably at T+2 and T+3, suggesting delayed market assimilation. Investors perceived these expansions as crucial but reacted negatively. This lag implies market inefficiency in processing subsequent announcements, unlike Careplus, highlighting the importance of investors understanding market response to new information.

During March 18 to September 17, 2020, Hextar’s stock price ranged from RM0.223 to RM2.297 with daily returns from −22.89% to +29.86%. Six glove business expansion announcements were made, evident in Table 18 and Figure 14. Most announcements prompted significant stock market reactions, signaling their perceived materiality to investors’ decisions. Market inefficiencies persisted postannouncement, with fluctuations observed. Initial announcements notably influenced market behavior positively, while subsequent ones varied. The first three had significant impacts, exposing initial market inefficiency. The fourth and fifth elicited negative reactions immediately, peaking on T+1 and T+3, respectively. The sixth showed a delayed negative impact post-announcement.

During March 18 to September 17, 2020, HLT’s stock price ranged from RM0.115 to RM3.18, with daily returns between −24.76% and +51.28%. Despite three glove-related expansion announcements, Table 19 and Figure 15 display insignificant CAR and t-test outcomes. None of HLT’s announcements generated substantial stock market reactions, suggesting investors did not find the information material for decision-making. The first announcement exhibited varied CARs, fluctuating between −42.6% and +25.0%, but lacked significance. The second announcement resulted in consistently negative CARs, varying from −46.0% to −2.1%. Similarly, the third announcement’s CAR fluctuated between −8.6% and +25.0%, with no significant impact. These findings reflect an inefficient market response to the announcements.

Between March 18, 2020 and September 17, 2020, Kossan’s stock price fluctuated from RM1.845 to RM7.768, with daily returns spanning −14.21% to +21.02%. Only one announcement regarding their glove business expansion was made within this period. The release on July 6, 2020 exhibited consistently positive CARs ranging from +4.7% to +26.6%, peaking at T+3. All CAR values were significant post-announcement, indicating stock market inefficiency as investor reactions persisted several days after the announcement, showcasing delayed but substantial responses to the news.

During March 18 to September 17, 2020, Supermax’s stock price ranged from RM0.553 to RM9.394 with daily returns between −18.46% and +24.56%. Among four announcements, most elicited significant positive market reactions, suggesting investors considered information about glove business expansion crucial for decisions. The March 19 announcement had a notably negative market response (−9.0% to −17.6% CAR), impacting stock prices significantly. The May 27 announcement resulted in a positive CAR (+6.8% to +59.3%), indicating prior market anticipation. The June 9 announcement showed no significant market impact despite fluctuations. However, the July 7 announcement triggered a significant positive market reaction (+2.9% to +36.9% CAR), particularly on days following the release.

Regarding the materiality of announcements, glove companies’ expansions were viewed as material but elicited mixed reactions, possibly due to market familiarity with these companies. In contrast, non-glove companies’ diversification into glove production was seen as a significant strategic shift, often receiving positive market reactions. This suggests that the materiality of announcements was perceived differently based on the company’s existing market role, with new entrants being viewed as bringing fresh dynamics to the industry. The perceived materiality of announcements, as noted here, echoes the themes in Mazur et al. (2021)’s study. The study demonstrates how market role influences the perceived significance of corporate strategies, affecting how investors respond to these announcements. Notwithstanding the above, the study diverges from referenced academic works by providing a realtime analysis of market reactions specifically during the COVID-19 pandemic, a unique and unprecedented event. While previous studies like those by Ramelli and Wagner (2020), Liu et al. (2020), and Mazur et al. (2021) offer insights into investor behavior and market dynamics in general or crisis scenarios, our research specifically contextualizes these behaviors within the pandemic’s unique circumstances. It adds value by examining the immediate impacts of strategic business decisions in a rapidly evolving situation, providing a contemporary understanding of market dynamics under extreme external pressures. This contributes a timely perspective to the existing body of knowledge, particularly in understanding investor behavior and market reactions to crisis-driven industry shifts.