Malaysia Daybreak | 2 June 2021 FBMKLCI Index

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Malaysia Daybreak | 2 June 2021 FBMKLCI Index Malaysia | June 2, 2021 Key Metrics Malaysia Daybreak | 2 June 2021 FBMKLCI Index 1,700 ▌What’s on the Table… 1,650 ———————————————————————————————————————————————————————————————————————————————————————— 1,600 1,550 Banks – Upping 2021F loan growth to 2.5-3.5% 1,500 Malaysia banks’ loan growth was stable at 3.9% yoy for both Mar and Apr 21 (Apr 1,450 household loan: +6.2% yoy, business loan: +0.4% yoy). We think that our revised 1,400 2021F loan growth of 2.5-3.5% is achievable, given healthy growth in 4M21 and Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 strong applications/approvals for auto loans. We reiterate our Overweight call on ——————————————————————————— banks, premised on the expected expansion in net interest margin and lower loan FBMKLCI loss provisioning in 2021F. 1,585.90 2.35pts 0.15% JUN Future JUL Future 1586 - (0.32%) 1585 - (0.25%) ——————————————————————————— Brewers – Not allowed to operate during current MCO Gainers Losers Unchanged 591 521 393 Brewers are not allowed to operate in this latest round of MCO (1-14 Jun 2021) ——————————————————————————— as their products are not listed under the essential goods category. For every two Turnover weeks that brewers are not operational, we estimate that the sector’s CY21F net 8978m shares / RM5126.848m profit will decline by 7.4%. Reiterate Neutral on the sector, with Hold calls on both 3m avg volume traded 7585.34m shares 3m avg value traded RM4349.15m HEIM and CAB. ——————————————————————————— Regional Indices FBMKLCI FSSTI JCI SET HSI Strategy Note – Key positives from PEMERKASA+ 1,586 3,187 5,947 1,619 29,468 ———————————————————————————————— Malaysia has unveiled a RM40bn stimulus package, dubbed PEMERKASA+, of Market Indices which RM5bn is a direct fiscal injection. We view this as mildly positive for Close % chg YTD % chg property and auto and neutral for banks. Also positive is the government’s plans FBMKLCI 1,585.90 0.1 (2.5) FBM100 11,218.12 0.2 (2.5) to achieve herd immunity by end-21. FBMSC 16,021.13 0.2 2.9 FBMMES 7,717.15 0.5 (28.1) Dow Jones 34,575.31 0.1 13.0 NASDAQ 13,736.48 (0.1) 6.6 Strategy Note – Key insights into weekly flows (24/5-28/5) FSSTI 3,187.23 0.7 12.1 FTSE-100 7,080.46 0.8 9.6 Foreign investors emerged as the largest net buyer last week, buying Public SENSEX 51,934.88 (0.0) 8.8 Bank and Telekom Malaysia. Retail investors were the second largest net buyer. Hang Seng 29,468.00 1.1 8.2 JCI 5,947.46 1.7 (0.5) They bought K Power, Hartalega and Supermax. Local institutional investors KOSPI 3,221.87 0.6 12.1 turned weekly net sellers, offloading Telekom Malaysia and Press Metal. Nikkei 225 28,814.34 (0.2) 5.0 PCOMP 6,627.43 (0.0) (7.2) Gamuda, Public Bank and Telekom were among the top 3 featured in last week’s SET 1,618.59 1.6 11.7 top net buy/sell lists. Hartalega, IHH and Gamuda were the top three short-selling Shanghai 3,624.71 0.3 4.4 Taiwan 17,162.38 0.6 16.5 targets last week by trading value. ———————————————————————————————— Top Actives Close % chg Vol. (m) SERBA DINAMIK 0.835 (26.1) 1652.7 FOCUS DYNAMICS 0.050 11.1 411.0 ▌News of the Day… DAGANG NEXCHANGE 0.805 4.5 236.8 ———————————————————————————————————————————————————————————————————————————————————————— UCREST 0.420 (3.4) 185.7 SUNZEN BIOTECH 0.230 (8.0) 169.8 • MoF: Remainder of Budget 2021 allocation of RM200bn will be spent this year LKL INTERNATIONAL 0.405 8.0 150.0 • Fiscal deficit, statutory debt estimates will 'definitely' be revised, says Zafrul KNM GROUP 0.165 (2.9) 100.3 SAUDEE GROUP 0.225 (13.5) 98.5 • Morten Lundal and Lim Tau Kien appointed as Digital Nasional directors ———————————————————————————————— • Top Glove’s US$1bn Hong Kong listing delayed amid US ban confusion Economic Statistics Close % chg • Robin Tan appointed as new BToto chairman US$/Euro 1.2215 0.01 • Pharmaniaga on track to supply 7m doses of CoronaVac to boost immunization RM/US$ (Spot) 4.1265 (0.04) RM/US$ (12-mth NDF) 4.1695 (0.55) • Duopharma concludes supply deal for 6.4m doses of Sputnik V vaccine OPR (%) 1.75 0.00 GOLD ( US$/oz) 1,899.07 (0.07) • MSM's Johor plant to resume ops on 4 Jun WTI crude oil US spot (US$/barrel) 67.72 2.11 CPO spot price (RM/tonne) 4,180.50 0.30 ———————————————————————————————————————— 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 | June 2, 2021 Global Economic News Eurozone manufacturing activity expanded at a record pace in May, according to a survey on Tuesday which suggested growth would have been even faster without supply bottlenecks that have led to an unprecedented rise in input costs. The bloc's economy has been ravaged by the coronavirus pandemic over the past year, with governments forcing much of the region's dominant service industry to close. But factories largely remained open, and restrictions in various countries have gradually been eased. IHS Markit's final Manufacturing Purchasing Managers' Index (PMI) rose to 63.1 in May from Apr's 62.9, above an initial 62.8 "flash" estimate and the highest reading since the survey began in Jun 1997. (Reuters) OPEC+ is likely to stick to the existing pace of gradually easing oil supply curbs at a meeting on Tuesday, three OPEC sources said, as producers balance expectations of a recovery in demand against a possible increase in Iranian supply. The Organization of the Petroleum Exporting Countries and allies — known as OPEC+ — decided in Apr to return 2.1m barrels per day (bpd) of supply to the market from May to Jul, as it anticipated global demand would rise despite high numbers of coronavirus cases in India. Since that decision, oil has extended its rally and gained more than 30% so far this year, although the prospect of increased output from Iran, as talks on reviving its nuclear deal make progress, has limited the upside. (Reuters) The push by some US employers to get people back into offices is clashing with workers who’ve embraced remote work as the new normal. A May survey of 1,000 US adults showed that 39% would consider quitting, if their employers weren’t flexible about remote work. The generational difference is clear: Among millennials and Gen Z, that figure was 49%. (Bloomberg) Asia’s factory activity continued to expand in May thanks to an ongoing recovery in global demand, surveys showed on Tuesday, though rising raw material costs and supply chain constraints clouded the outlook. A spike in Covid-19 infections in some countries could disrupt supply chains, posing a headache for manufacturers and weighing on Asia's export-driven recovery, analysts say. Japan and South Korea saw expansions in factory activity moderate in May, purchasing managers' indexes (PMI) showed on Tuesday, underscoring the fragile nature of their recoveries. (Reuters) China's factory activity expanded at the fastest pace this year in May as domestic and export demand picked up, though sharp rises in raw material prices and strains in supply chains crimped some companies' production, a business survey showed on Tuesday. The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) rose to 52.0 last month, the highest level since Dec and inching up from Apr’s 51.9. Analysts polled by Reuters had expected the index to remain at 51.9. The 50-mark separates growth from contraction on a monthly basis. New orders rose at the strongest pace so far this year and a gauge for export orders was the highest since Nov, but the output reading, while still solid, was slightly lower than the previous month. (Reuters) China’s Sinovac Biotech Ltd. received long-awaited WHO authorization of its Covid-19 vaccine, paving the way for a wider rollout of the controversial shot in countries scrambling for a supply of immunizations. The WHO recommended its use for people aged 18 and older in a two-dose schedule with a spacing of two to four weeks between shots. (Bloomberg) Delivery to the Philippines of the first batches of a promised 17m doses of AstraZeneca's coronavirus vaccine made in Thailand has been delayed by several weeks, a Philippine presidential adviser said. The delay raises questions about AstraZeneca's vaccine distribution plan in Southeast Asia, which depends 2 Malaysia Daybreak | June 2, 2021 on 200m doses made by Siam Bioscience, a company owned by Thailand's king that is making vaccines for the first time. (Reuters) Malaysia Economic News The Social Security Organisation (Socso) has announced the extension of the application deadline for the Wage Subsidy Programme (PSU) from 30 Jun to 31 Jul. Its Chief Executive Datuk Seri Dr Mohammed Azman Aziz Mohammed said the extension was in line with the government's decision to extend the PSU assistance to all economic sectors affected by the implementation of the total lockdown, for another month. He said the subsidy would be channeled automatically to employers who have applied under PSU 3.0 and they only needed to update the list of employees before the 15th of the month.
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