4th April 2021
(Bloomberg) — As the world’s biggest glove maker stumbles
because of ESG concerns, a metal producer’s focus on
environmental, social and governance practices has made it a
darling among investors.
Press Metal Aluminium Holdings Bhd. surged 18% in the March
quarter to become the best performer on Malaysia’s benchmark
stock index. The company, whose plants run on hydropower, has
rallied amid higher prices of the metal and bets that its
products made with a smaller carbon footprint will be in demand.
The global decarbonization agenda and rising investor
interest in ESG factors have put Southeast Asia’s biggest
aluminum smelter in a sweet spot. China is trying to meet a goal
of carbon neutrality by 2060, leaving aluminum producers that
run on coal-fired power in the government’s cross-hairs.
Press Metal’s hydro-run smelter means it uses renewable
energy to produce the metal, which bodes well with ESG-centric
clients, Low Jin Wu, an analyst at Hong Leong Investment Bank
Bhd. said in a report.
“Press Metal tops when it comes to ESG because of their
strategic decision to position themselves in Sarawak with rich
hydro-power as their power backbone,” said Chua Zhu Lian,
investment director at Fortress Capital Asset Management Sdn.
“There’s scarcity of low-carbon aluminium makers globally.”
Top Glove
The stock has almost doubled from its October low to 9.90
ringgit. The company is now the eighth-biggest by market value
in Malaysia’s stock gauge, surpassing Top Glove. A year ago,
Press Metal languished in the bottom five, while Top Glove at
one point in October was close to becoming the nation’s most
valued firm.
Top Glove shares have tumbled 26% this year as vaccine
rollouts weaken its appeal. The rout deepened this week after
the U.S. Customs and Border Protection ordered personnel at U.S.
ports of entry to seize its gloves over allegations of forced
labor.
That’s a blow to Top Glove and comes as Malaysia’s key
industries — palm oil and gloves — grapple with intense
scrutiny over poor labor practices.
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