3 May 2021 Daybreak
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Malaysia | May 3, 2021 Key Metrics Malaysia Daybreak | 3 May 2021 FBMKLCI Index 1,700 1,650 ▌What’s on the Table… ———————————————————————————————————————————————————————————————————————————————————————— 1,600 1,550 1,500 Banks – LLP downcycle likely began in 1Q21F 1,450 1,400 The industry’s loan growth picked up from 3.7% yoy at end-Feb 21 to 3.9% yoy at 1,350 end-Mar 21 due to stronger household and business loan growth. Given the 1,300 smaller increase in total provision in 1Q21, we believe that banks’ LLP peaked in May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 4Q20 and a downcycle began in 1Q21. We reiterate our Overweight call on ——————————————————————————— banks, underpinned by the expected decline in LLP and turnaround in net interest FBMKLCI income growth in 2021F. 1,601.65 -6.85pts -0.43% APR Future MAY Future 1603.5 - (-0.28%) 1595 - (-0.65%) ——————————————————————————— Mr D.I.Y. Group (M) Bhd – Growth outlook intact with earnings beat Gainers Losers Unchanged 1QFY21 core net profit of RM124.1m (+115.5% yoy) was above expectations, 513 577 453 ——————————————————————————— mainly due to stronger-than-expected revenue and store base growth. MDGM Turnover added 54 outlets across its three formats in 1QFY21, accounting for 31% of its 6752.46m shares / RM4614.203m full-year target of 175 stores, ahead of expectations. Its commendable 1QFY21 3m avg volume traded 8479.26m shares earnings performance points to a robust growth outlook ahead. Reiterate Add. 3m avg value traded RM4730.85m ——————————————————————————— Regional Indices FBMKLCI FSSTI JCI SET HSI 1,602 3,218 5,996 1,583 28,725 ▌News of the Day… ———————————————————————————————————————————————————————————————————————————————————————— ———————————————————————————————— Market Indices • Government will be reviewing the minimum wage rate Close % chg YTD % chg FBMKLCI 1,601.65 (0.4) (1.6) • Toll rate hikes for KESAS, SKVE and LPT2 have been postponed FBM100 11,450.16 (0.4) (0.5) • Berjaya Corp will announce a reorganisation plan in June FBMSC 17,198.26 0.4 10.5 FBMMES 8,846.02 (0.2) (17.6) • KLCCP Stapled Group appoints Md Shah Mahmood as new CEO Dow Jones 33,874.85 (0.5) 10.7 NASDAQ 13,962.68 (0.9) 8.3 • Sapura Energy appoints former Shell Malaysia and Technip chiefs to its board FSSTI 3,218.27 (0.1) 13.2 • Nenggiri Hydroelectric Dam to add 300MW to Tenaga’s hydro power capacity FTSE-100 6,969.81 0.1 7.9 SENSEX 48,782.36 (2.0) 2.2 Hang Seng 28,724.88 (2.0) 5.5 JCI 5,995.62 (0.3) 0.3 KOSPI 3,147.86 (0.8) 9.5 Nikkei 225 28,812.63 (0.8) 5.0 PCOMP 6,370.87 (1.8) (10.8) SET 1,583.13 (0.5) 9.2 Shanghai 3,446.86 (0.8) (0.8) Taiwan 17,566.66 (0.0) 19.2 ———————————————————————————————— Top Actives Close % chg Vol. (m) FOCUS DYNAMICS 0.115 (11.5) 605.9 HIAP TECK VENTURE 0.635 12.4 189.0 KTG 0.235 (4.1) 144.7 VORTEX 0.145 3.6 141.1 SC ESTATE BUILDER 0.110 (8.3) 115.8 KEY ASIC 0.195 0.0 113.1 MINDA GLOBAL 0.175 0.0 106.8 UCREST 0.455 3.4 100.6 ———————————————————————————————— Economic Statistics Close % chg US$/Euro 1.2028 0.04 RM/US$ (Spot) 4.0880 (0.05) RM/US$ (12-mth NDF) 4.1410 (0.10) OPR (%) 1.75 0.00 GOLD ( US$/oz) 1,768.54 (0.03) WTI crude oil US spot (US$/barrel) 63.58 (2.20) CPO spot price (RM/tonne) 4,400.00 (0.08) ———————————————————————————————————————— Ivy NG Lee Fang, CFA T (60) 3 2261 9073 E [email protected] Show Style "View Doc Map" IMPORTANT DISCLOSURES, INCLUDING ANY REQUIRED RESEARCH CERTIFICATIONS, ARE PROVIDED AT THE END OF THIS REPORT. IF THIS REPORT IS DISTRIBUTED IN Powered by the THE UNITED STATES IT IS DISTRIBUTED BY CGS-CIMB SECURITIES (USA), INC. AND IS CONSIDERED THIRD-PARTY AFFILIATED RESEARCH. EFA Platform Sources: CIMB. COMPANY REPORTS Sources: CIMB. COMPANY REPORTS Malaysia Daybreak | May 3, 2021 Global Economic News Dallas Federal Reserve Bank President Robert Kaplan called for beginning the conversation about reducing central bank support for the economy, warning of imbalances in financial markets and arguing the economy is healing faster than expected. "We are now at a point where I'm observing excesses and imbalances in financial markets," Kaplan said, pointing to "historically" elevated stock prices, tight credit spreads, and surging house prices. (Reuters) US Treasury Secretary Janet Yellen tamped down concerns that President Joe Biden’s plans for infrastructure, jobs and families will cause inflation, saying the spending will be phased in over a decade. She said the Federal Reserve will monitor inflation carefully and has the tools to address it if necessary. (Reuters) US consumer spending increased 4.2% mom last month, after falling 1.0% mom in Feb amid a surge in income, as households received additional Covid-19 pandemic relief money from the government. Meanwhile labour costs, as measured by the Employment Cost Index jumped by 0.9% qoq in 1Q21, the most in 14 years, driven by a pick-up in wage growth as companies competed for workers to boost production. (Reuters) The World Health Organization has listed Moderna's COVID-19 vaccine for emergency use, the agency said, the fifth to be given the status meant to expedite countries' own approval of shots. (Reuters) China's official manufacturing Purchasing Managers' Index (PMI) fell to 51.1 in Apr from 51.9 in Mar. The official non-manufacturing PMI slipped to 54.9 in Apr from 56.3 in Mar. Apr’s Caixin/Markit manufacturing PMI – which largely measures sentiment among smaller, mostly private firms – rose from an 11-month low of 50.6 in Mar to 51.9 in Apr. (South China Morning Post) Malaysia Economic News A total of 555,288 individuals have completed two doses of Covid-19 vaccine under the National Covid-19 Immunisation Programme as of 1 May, said Health Minister Datuk Seri Dr Adham Baba. He said that, as of yesterday, 898,094 individuals had received the first dose, bringing the total number of vaccine shots administered in the country to 1,453,382. Only 38.90% or 9,447,232 of the people targeted have registered for vaccination, (Bernama) The ongoing movement control order (MCO) will be reviewed, especially in states experiencing a spike in positive Covid-19 cases, said Prime Minister Tan Sri Muhyiddin Yassin. (Bernama) The special National Security Council (MKN) meeting scheduled for Monday will decide on several matters related to Aidilfitri celebrations this year, including the standard operating procedures (SOPs) and inter-district travel permission. Senior Minister (Security) Datuk Seri Ismail Sabri Yaakob said the Aidilfitri SOPs will be issued based on the advice and recommendations of the Ministry of Health (MoH) to curb the spread of Covid-19. (Bernama) An overwhelming response to the AstraZeneca Covid-19 vaccine registration process saw the system being jammed up in the initial hour, and the entire 268,000 slots taken up in about three hours. “We are scheduled to receive a million doses this month via COVAX. We will expand the opt-in other states (except Sarawak, which has declined), and ensure those without access to 2 Malaysia Daybreak | May 3, 2021 internet, etc, can also sign up,” Minister of Science, Technology & Innovation Khairy Jamaluddin said. (The Edge Markets) Malaysia and Singapore agreed on the procedures and entry requirements for Death and Critically Ill Emergency Visits ((DCEV) between the two countries, amid stricter border measures. The arrangement will be implemented from 17 May 2021 onwards. (Bernama) Five telecommunications industry players, namely Celcom, Digi, Maxis, U Mobile dan Telekom Malaysia (TM), have agreed to extend the provision of one gigabyte (1GB) of free daily data to all respective customers until 31 Jul 2021. (Benama) The government has agreed to postpone the increase in toll rates for three major highways, which was supposed to take effect on 1 Jan this year, said Senior Works Minister Datuk Seri Fadillah Yusof. He said the hike in toll prices was supposed to affect the Shah Alam Expressway (KESAS), South Klang Valley Expressway (SKVE) and East Coast Expressway 2 (LPT2). Fadillah added that another 21 highways for all vehicle classes and one toll plaza will also see a freeze in toll rates. He said the postponement will cost the government RM2.25bn, and negotiations to restructure toll rates with the concessionaires were ongoing, adding that this will be finalised before 2023. (Bernama) The Ministry of Domestic Trade and Consumer Affairs (KPDNHEP) has added another 20 items to the 2021 Hari Raya Puasa Festive Season Maximum Price Control Scheme (SHMMP) list, bringing the total to 32. Minister Datuk Seri Alexander Nanta Linggi said the second phase of the 2021 Hari Raya Puasa SHMMP, which involves items from the vegetable, dry food and sea product categories, will be enforced from 6 May. (Bernama) The government has approved a total RM14bn under the two wage subsidy programmes (WSP). A total of 322,177 employers and 2.64m employees have benefited from WSP 1.0 under PRIHATIN and PENJANA, with a total of RM12.87bn in subsidies approved As for WSP 2.0 under KITA PRIHATIN, a total of RM1.15bn has been channeled to 73,210 employers and 631,801 employees. (Edge Markets) The minimum wage rate is being reviewed to ensure earnings of workers remain relevant with current economic conditions, said Prime Minister Tan Sri Muhyiddin Yassin. Muhyiddin also said the government is in the process of improving and amending labour laws, especially the Employment Act 1955 by widening its scope of application.