Malaysia Daybreak | 7 July 2021 FBMKLCI Index
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Malaysia | July 7, 2021 Key Metrics Malaysia Daybreak | 7 July 2021 FBMKLCI Index 1,700 ▌What’s on the Table… 1,650 ———————————————————————————————————————————————————————————————————————————————————————— 1,600 1,550 MISC Bhd – ESG: The EEXI and CII challenge from 2023F 1,500 This report examines in-depth the impact of the EEXI and CII rules from 2023F, 1,450 which is the IMO’s main effort to reduce shipping carbon emissions. MISC’s oil 1,400 tankers compare well to its peers, but its LNG fleet may have to discount its Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 long-term charter rates to compensate for slower sailing speeds. Our SOP-based ——————————————————————————— TP remains at RM7.95, with downside risk to RM7.64. We reiterate Add with a FBMKLCI potential rally in 2H21F tanker rates as the key catalyst. 1,531.63 -0.73pts -0.05% JUL Future AUG Future 1532 - (0.13%) 1529.5 - (0.13%) ——————————————————————————— IOI Corporation – Makes non-binding offer for estates Gainers Losers Unchanged IOI made a non-binding offer to buy NPC’s estates in Sabah for RM281m. We 585 412 426 ——————————————————————————— are neutral on this offer as we view the offer price as fair. Reiterate Hold. Turnover Concerns over forced labour allegations are offset by share buyback activities. 6754.63m shares / RM3654.254m 3m avg volume traded 6422.31m shares 3m avg value traded RM3765.18m ——————————————————————————— Regional Indices ▌News of the Day… ———————————————————————————————————————————————————————————————————————————————————————— FBMKLCI FSSTI JCI SET HSI 1,532 3,191 6,047 1,591 28,073 • Socso: Govt has disbursed RM15.67bn for wage subsidy programme ———————————————————————————————— • Covid-19 vaccination rate surpasses 300,000/day, but new cases soar to 7,654 Market Indices Close % chg YTD % chg • Top Glove suspends operations in Klang pending NSC clarification FBMKLCI 1,531.63 (0.0) (5.9) • Hartalega and Kossan join Top Glove in halting ops due to EMCO FBM100 10,869.55 0.1 (5.5) FBMSC 15,748.28 1.0 1.2 • TSH Resources sells plantation assets in Sabah for RM248m FBMMES 7,419.25 1.2 (30.9) • LB Aluminium Bhd proposes 3-for-4 bonus issue Dow Jones 34,577.37 (0.6) 13.0 NASDAQ 14,663.64 0.2 13.8 FSSTI 3,190.59 1.6 12.2 FTSE-100 7,100.88 (0.9) 9.9 SENSEX 52,861.18 (0.0) 10.7 Hang Seng 28,072.86 (0.3) 3.1 JCI 6,047.11 0.7 1.1 KOSPI 3,305.21 0.4 15.0 Nikkei 225 28,643.21 0.2 4.4 PCOMP 6,992.43 (0.6) (2.1) SET 1,591.43 0.8 9.8 Shanghai 3,530.26 (0.1) 1.6 Taiwan 17,913.07 (0.0) 21.6 ———————————————————————————————— Top Actives Close % chg Vol. (m) SERBA DINAMIK 0.510 5.2 1083.8 METRONIC GLOBAL 0.055 (26.7) 342.6 SAPURA ENERGY 0.130 0.0 205.5 PRIVASIA TECH 0.260 20.9 188.4 KUMPULAN JETSON 0.470 (15.3) 151.6 EURO HOLDINGS 1.150 13.9 148.1 MMAG HOLDINGS 0.140 0.0 115.1 SEDANIA 0.990 (6.6) 113.2 ———————————————————————————————— Economic Statistics Close % chg US$/Euro 1.1820 (0.04) RM/US$ (Spot) 4.1545 (0.04) RM/US$ (12-mth NDF) 4.2135 (0.18) OPR (%) 1.75 0.00 GOLD ( US$/oz) 1,795.67 (0.08) WTI crude oil US spot (US$/barrel) 73.37 (2.38) CPO spot price (RM/tonne) 3,959.00 0.49 ———————————————————————————————————————— 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 | July 7, 2021 Global Economic News Emerging markets saw more interest rate hikes in Jun as a hawkish pivot from the U.S. Federal Reserve amplified inflationary pressures in a number of developing economies. Policymakers across a group of 37 emerging market central banks delivered a net five interest rate rises in Jun after a single increase in May. A raft of major central banks raised rates in Jun and many flagged an accelerating pace of hikes in the months to come. (Reuters) Malaysia Economic News Income from e-commerce transactions surged 30% yoy in the 1Q21 to RM254.6bn from RM195.9bn in 1Q20, according to the Department of Statistics Malaysia (DOSM). Chief Statistician Datuk Seri Dr Mohd Uzir Mahidin said in 2020, income from e-commerce rose 32.7% to RM896.4bn as compared to 2019. The e-commerce income of establishments accelerated by 22.8% in 2019 to RM675.4bn as compared to 2017. (Bernama) The government has disbursed RM15.67bn under the Wage Subsidy Programme (PSU), which has benefited 2.74m employees and 333,533 employers in the country. Social Security Organisation (SOCSO) chief executive officer (CEO) Datuk Seri Dr Mohammed Azman Aziz Mohammed said all sectors had benefited from the programme, starting from PSU 1.0 to PSU 3.0. Following the announcement of PSU 4.0, the total allocation for the programme is expected to grow to RM15.8bn, he told a press conference. (Bernama) Malaysia's central bank is expected to leave its key interest rate unchanged, a Reuters poll showed on 6 Jul, amid an extended nationwide lockdown imposed to contain a surge in Covid-19 infections. Twelve of 13 economists surveyed by Reuters saw Bank Negara Malaysia (BNM) keeping its overnight policy rate steady at 1.75% on 8 Jul. The central bank had cut its benchmark rate by 125 bps last year. (Reuters) Manual, semi-automated and automated car wash services licensed by the local authorities (PBT), as well as morning markets and farmers' markets, are allowed to operate in states in Phase 2 of the movement control under the National Recovery Plan (PPN). The Ministry of Housing and Local Government (KPKT) said that these services do not need to obtain permission to operate through the Covid-19 Intelligent Management System (CIMS), maintained by the Ministry of International Trade and Industry (MITI). (Bernama) Malaysia will be receiving 14.4m doses of Covid-19 vaccines in Jul, according to the latest tweet by the Covid-19 Vaccine Supply Access Guarantee Special Committee (JKJAV). These, it said, comprise a total of 6.43m doses of Pfizer vaccine from Pfizer as well as the donation from the US, 1.59m doses of AstraZeneca (delivery of AstraZeneca manufactured in Thailand and donation from Japan) and 6.38m doses of Sinovac (from Pharmaniaga and donation from China). (The Edge Markets) For locations under Phases 1 and 2 of the National Recovery Plan, only companies listed as essential services under the National Security Council’s (MKN) standard operating procedures (SOPs) are allowed to operate using the new Covid-19 Intelligent Management System (CIMS) 3.0 letter. The Ministry of International Trade and Industry (MITI) said the new CIMS 3.0 letter would have the NRP’s Malay acronym PPN under its QR code. (Bernama) Bank Negara Malaysia (BNM) said applications for the six-month loan moratorium can be made starting 7 Jul, in line with the PEMULIH stimulus package announced by Prime Minister Tan Sri Muhyiddin Yassin. In a statement, BNM said applications can be made by individuals, microenterprises, as well as 2 Malaysia Daybreak | July 7, 2021 small and medium enterprises (SMEs) affected by the pandemic, adding that opting in for the moratorium or any other repayment packages will be easy with no need for supporting documentation. (The Edge Markets) Political News Yesterday (6 Jul) was the start of week 6 of the "total lockdown", or Phase 1 of the National Recovery Plan, and our current status is: Situation normal, all fouled up. While some states are reporting fewer cases, the situation in the Klang Valley is getting worse despite the prolonged "lockdown". Kuala Lumpur reported 1,550 new cases, a new record for the territory, while Selangor had 3,260 new cases. Despite the rising cases, Pakatan Harapan believes the country is still not doing enough Covid-19 testing, after Health Ministry Director-General Tan Sri Dr Noor Hisham Abdullah shared, in a now-deleted tweet, an unverified article claiming the WHO recommended against widespread screening. The enhanced MCO in most of Selangor, meanwhile, is running into issues after some non-essential factories were granted permission letters to operate. The government later clarified that the letters are invalid. (Malaysiakini) Despite holding a series of meetings, the United Malays National Organisation (UMNO) has yet to make a decision on whether to withdraw support for the Perikatan Nasional federal government. This is after UMNO President Datuk Seri Ahmad Zahid Hamidi's ultimatum to the government to convene Parliament was thwarted by an 11th-hour announcement by Putrajaya. UMNO Supreme Council Member Datuk Mohd Puad Zarkashi, however, is confident that an exit from Perikatan Nasional is imminent. The UMNO supreme council will meet tonight (7 Jul). (Malaysiakini) Members of Parliament (MP) are worried that the forthcoming Parliament sitting on 26 Jul may turn into a mere government briefing session. This comes as Putrajaya has not indicated that the Emergency Proclamation and Emergency Ordinances would be debated. Instead, it looks like the session will focus mainly on approving mechanisms for a hybrid Parliament, while emergency-related laws will only be tabled.