Malaysia Daybreak| 8 September 2021

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Malaysia Daybreak| 8 September 2021 Malaysia | September 8, 2021 Key Metrics Malaysia Daybreak | 8 September 2021 FBMKLCI Index 1,700 ▌What’s on the Table… 1,650 ———————————————————————————————————————————————————————————————————————————————————————— 1,600 1,550 Banks - ESG not a big mover for banks 1,500 ESG adoption would have small negative impact on banks’ NP (ROE) due to our 1,450 expected restrictive lending practices to ESG-vulnerable sectors. For banks, the 1,400 correlation coefficient is low at only -0.09 for P/BV vs. Refinitiv ESG scores but Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 Sep-21 high at 0.91 for P/BV vs. ROE (2013-20). Maybank and HLB are our ESG picks ——————————————————————————— among Malaysian banks, due to their more comprehensive ESG disclosure and FBMKLCI measures to reduce ESG risks. 1,583.48 1.89pts 0.12% SEP Future OCT Future Telco - Overall - State of the market (Jun-Aug 21) 1570.5 - (0.26%) 1568 - (0.29%) ——————————————————————————— Prepaid competition rose with new low price/GB and longer-validity offers from Gainers Losers Unchanged Maxis, Yoodo, MVNOs. Postpaid sub acquisition promotions continued. 2Q21 636 436 424 ——————————————————————————— industry mobile revenue rose 1.5% qoq due to Prihatin-led demand. Celcom’s Turnover RMS rose further qoq. TM’s revenue grew a robust 7% yoy. Reiterate Neutral on 4748.29m shares / RM2888.23m Malaysian telcos; top pick: TM (Add, TP: RM7.50). 3m avg volume traded 4801.95m shares 3m avg value traded RM2894.22m ——————————————————————————— Regional Indices ▌News of the Day… FBMKLCI FSSTI JCI SET HSI ———————————————————————————————————————————————————————————————————————————————————————— 1,583 3,109 6,112 1,636 26,354 ———————————————————————————————— • TNB to develop 300 MW hydroelectric power plant in Gua Musang Market Indices Close % chg YTD % chg • TM and Tata Communications to provide IP transit services in ASEAN FBMKLCI 1,583.48 0.1 (2.7) • Retail industry players call for an urgent reopening of the sector FBM100 11,286.28 0.1 (1.9) • The EPF awarded a data centre cabling project to Mesiniaga FBMSC 16,384.28 0.7 5.3 FBMMES 7,360.30 1.2 (31.4) • Hartalega sees the downtrend in ASP continue; prices to normalise in 1Q22 Dow Jones 35,100.00 (0.8) 14.7 • MPOB expects CPO prices to be stable at above RM4,000 in 3Q21 NASDAQ 15,374.33 0.1 19.3 FSSTI 3,108.53 0.2 9.3 FTSE-100 7,149.37 (0.5) 10.7 SENSEX 58,279.48 (0.0) 22.0 Hang Seng 26,353.63 0.7 (3.2) JCI 6,112.40 (0.2) 2.2 KOSPI 3,187.42 (0.5) 10.9 Nikkei 225 29,916.14 0.9 9.0 PCOMP 6,912.71 0.5 (3.2) SET 1,636.45 (0.7) 12.9 Shanghai 3,676.59 1.5 5.9 Taiwan 17,428.87 (0.4) 18.3 ———————————————————————————————— Top Actives Close % chg Vol. (m) KNM GROUP 0.315 8.6 235.3 PEGASUS HEIGHTS 0.015 0.0 128.9 AE MULTI HOLDINGS 0.045 0.0 111.4 TFP SOLUTIONS 0.235 2.2 89.0 AVILLION 0.140 7.7 78.4 DESTINI 0.275 7.8 77.4 SERBA DINAMIK 0.400 1.3 69.0 NWP HOLDINGS 0.240 6.7 62.6 ———————————————————————————————— Economic Statistics Close % chg US$/Euro 1.1843 0.00 RM/US$ (Spot) 4.1553 (0.02) RM/US$ (12-mth NDF) 4.2001 (0.36) OPR (%) 1.75 0.00 GOLD ( US$/oz) 1,795.18 0.05 WTI crude oil US spot (US$/barrel) 68.35 (1.36) CPO spot price (RM/tonne) 4,558.00 0.49 ———————————————————————————————————————— Iv y NG Lee Fang, CFA T (60) 3 2261 9073 E iv [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 Malaysia Daybreak | September 8, 2021 Global Economic News China's exports unexpectedly grew at a faster pace in Aug thanks to solid global demand, helping take some of the pressure off the world's second-biggest economy as it navigates its way through headwinds from several fronts. Shipments from the world's biggest exporter in Aug rose at a faster-than-expected rate of 25.6% yoy (vs. +19.3% in Jul), pointing to some resilience in China's industrial sector. (Reuters) Taiwan's exports rose for a 14th straight month in Aug, with the stronger-than- expected pace setting a new record, as the island's manufacturers faced sustained demand amid a global shortage of computer chips and for consumer electronics. Exports rose 26.9% yoy to US$39.55bn in Aug, the Ministry of Finance said on 7 Sep, the highest monthly figure on record. (Reuters) Japan's coincident indicator index inched down in Jul as a renewed spread of COVID-19 in the country and other parts of Asia weighed on consumer and production activities. The index of coincident economic indicators, which consists of a range of data including factory output, employment and retail sales, fell a preliminary 0.1 point from the previous month to 94.5 in Jul. The index of leading economic indicators, which is a gauge of the economy a few months ahead and is compiled using data such as job offers and consumer sentiment, fell 0.5 point to 104.1. (Reuters) Hong Kong will start allowing visitors from China to skip the strict quarantine process required for most arrivals, a key first step toward reopening the border with the mainland and reviving a flow of visitors that’s long been crucial to the local economy. The city will start a “Come2hk” travel program on 15 Sep that will allow up to 2,000 non-Hong Kong residents per day from the mainland and Macau to visit the city, Hong Kong Chief Executive Carrie Lam said at a regular press briefing on 7 Sep. (Bloomberg) Japanese households cut spending for a third month in Jul as a renewed state of emergency over the virus kept consumers cautious and likely pushed back the timetable for a more robust economic recovery. Spending fell 0.9% mom on a seasonally adjusted basis, the internal affairs ministry reported on 7 Sep. Compared with the depressed level a year earlier, outlays increased just 0.7%, missing the median estimate from economists, as falls in spending on medical care and home goods countered increases on transportation and food. A separate report showed wages rose yoy for a fifth month in Jul, pushed up by a double-digit increase in overtime pay. (Bloomberg) The Australian dollar fell on 7 Sep after the Reserve Bank of Australia stuck to plans to taper its bond buying but extended the length of the programme as the economy struggles with coronavirus lockdowns. The currency was 0.27% lower at US$0.7419 at 06:21 GMT, reversing earlier gains made after the RBA surprised some by cutting its bond buying by A$1 billion (US$745.20m) a week to A$4bn. The extension of the programme to at least mid-Feb was seen as a dovish concession. (Reuters) Boris Johnson on 7 Sep announced a £12bn annual tax rise to fund a big increase in health and social care spending in England, in a defining moment for his premiership that infuriated many in his own party. Johnson said the “tough decision” was needed to contain a mounting waiting list crisis in hospitals and to carry out long-promised reforms to the country’s crumbling care sector. The plan to increase national insurance contributions (NICs) by 1.25 percentage points for both employers and employees breaches Johnson’s election “guarantee” that he could fix social care without putting up key taxes. (Financial Times) 2 Malaysia Daybreak | September 8, 2021 US home prices increased 18% in Jul yoy, according to a CoreLogic Inc report released on 7 Sep. The jump is the largest 12-month gain in the index since the series began 45 years ago. On a mom basis, home prices increased by 1.8% in Jul. (Bloomberg) Malaysia Economic News The government will specifically look into job and income recovery in Budget 2022, as well as strengthening social protection through focused assistance, in an effort to build socio-economic resilience. At a virtual session of Budget 2022 consultation, Minister of Finance Tengku Datuk Seri Zafrul Tengku Abdul Aziz also highlighted the government’s focus on structural reforms, including closer collaboration with civil society organisations (CSOs) as the government’s delivery partner to achieve goals outlined in the National Recovery Plan and Budget 2022. This is also in line with the government's longer term aspirations outlined in the 12th Malaysia Plan and the Shared Prosperity Vision 2030. "The government remains committed to helping those in need, particularly the rakyat who are still affected by the COVID-19 crisis. (Bernama) The decision on Covid-19 vaccination for students will be finalised in the coordination meeting involving the Ministry of Health (MoH) and the Ministry of Education (MoE) scheduled for 9 Sep. Health Minister Khairy Jamaluddin said as soon as the final decision on the matter is reached, it would be taken to the National Security Council for further action. (Bernama) Drastic price hikes of wholesale chicken in the last one month have placed restaurant operators and caterers in Terengganu under pressure because they have to absorb the cost increases.
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