Malaysia | June 24, 2021 Key Metrics Malaysia Daybreak | 24 June 2021 FBMKLCI Index 1,700 ▌What’s on the Table… 1,650 ———————————————————————————————————————————————————————————————————————————————————————— 1,600 1,550 Telco - Overall – A sustainable connection 1,500 All four telcos score above the mid-point in our practical assessment of 6 key 1,450 material matters, indicating that the sector performs relatively well in ESG. DNB’s 1,400 5G network rollout poses longer-term uncertainties for MNOs. Digital banking Jun-20 Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 (Axiata) and growth in cybersecurity spend (TM) are opportunities. Our ——————————————————————————— top-ranked telco for ESG is Digi, followed closely by TM. FBMKLCI 1,564.76 -9.26pts -0.59% JUN Future JUL Future Sunway Bhd – RM750m growth antidote for healthcare ops 1565 - (-0.35%) 1566 - (-0.35%) ——————————————————————————— Sunway is divesting a 16% stake in SHH to Greenwood Capital of GIC for Gainers Losers Unchanged RM750m at an attractive 31.3x EV/EBITDA; deal comes with an IPO target. 300 713 442 ——————————————————————————— Entrance of a strategic investor would complement and expedite SHH’s Turnover RM2bn-3bn expansion plans over the next 6-7 years. Our TP rises 12sen/6.7% 5217.96m shares / RM2783.991m to RM1.91. Retain Hold; stock rose ahead of news. 3m avg volume traded 6607.10m shares 3m avg value traded RM3821.34m ——————————————————————————— Regional Indices Astro Malaysia – Play next episode: Netflix FBMKLCI FSSTI JCI SET HSI 1,565 3,119 6,035 1,592 28,817 The Edge Markets reported that Astro could be announcing “as early as this ———————————————————————————————— week” that Netflix will join the mélange of streaming services it is aggregating. In Market Indices our view, the market should not look at Disney+ Hotstar or Netflix as the solitary Close % chg YTD % chg catalyst to nurse Astro’s brand equity back to health. Astro’s metamorphosis will FBMKLCI 1,564.76 (0.6) (3.8) FBM100 11,104.17 (0.6) (3.5) only be complete when the 15-or-so streaming services join by end-FY1/23F. FBMSC 16,060.43 (0.5) 3.2 The “new Astro” is still a work in progress. FBMMES 7,499.59 (1.6) (30.1) Dow Jones 33,874.24 (0.2) 10.7 NASDAQ 14,271.73 0.1 10.7 FSSTI 3,118.62 0.3 9.7 FTSE-100 7,074.06 (0.2) 9.5 ▌News of the Day… SENSEX 52,306.08 (0.5) 9.5 ———————————————————————————————————————————————————————————————————————————————————————— Hang Seng 28,817.07 1.8 5.8 JCI 6,034.54 (0.9) 0.9 • MEF calls on the government to end lockdown KOSPI 3,276.19 0.4 14.0 Nikkei 225 28,874.89 (0.0) 5.2 • World Bank cuts Malaysia's 2021 GDP growth projection to 4.5% PCOMP 6,918.41 0.7 (3.1) • Singapore’s GIC to acquire a 16% stake in Sunway Healthcare for RM750m SET 1,592.08 (0.4) 9.8 Shanghai 3,566.22 0.2 2.7 • Astro could announce a partnership with Netflix this week Taiwan 17,336.71 1.5 17.7 ———————————————————————————————— • FGV is finalising the appointment of new Group CEO Top Actives • Shareholders approve DNeX's RM163.8m acquisition of SilTerra Close % chg Vol. (m) PEKAT GROUP 0.815 139.7 243.3 SANICHI TECH 0.065 (18.8) 222.0 SAUDEE GROUP 0.160 6.7 194.5 FOCUS DYNAMICS 0.045 0.0 157.3 SERBA DINAMIK 0.595 (4.8) 126.4 BOUSTEAD HLDGS 0.740 19.4 116.7 AVILLION 0.130 (7.1) 82.4 ADV SYNERGY 0.160 3.2 80.6 ———————————————————————————————— Economic Statistics Close % chg US$/Euro 1.1929 0.02 RM/US$ (Spot) 4.1620 (0.05) RM/US$ (12-mth NDF) 4.1980 (0.45) OPR (%) 1.75 0.00 GOLD ( US$/oz) 1,777.06 (0.09) WTI crude oil US spot (US$/barrel) 73.28 0.30 CPO spot price (RM/tonne) 3,615.50 1.32 ———————————————————————————————————————— 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 24, 2021 Global Economic News COVID-19 vaccines made by AstraZeneca and the Pfizer-BioNTech alliance remain broadly effective against Delta and Kappa variants of the COVID-19 causing virus, which were first identified in India, according to a scientific study, underpinning a continued push to deliver the shots. The study by Oxford University researchers, published in the journal Cell, investigated the ability of antibodies in the blood from people, who were vaccinated with the two-shot regimens, to neutralize the highly contagious Delta and Kappa variants, a statement said. (Reuters) US Treasury Secretary Janet Yellen said that inflation should retreat by year end from its current elevated level as supply bottlenecks get worked out, adding she sees little evidence inflation expectations are becoming unanchored. (Reuters) A period of high inflation in the US may last longer than anticipated, two US Federal Reserve officials said, prompting one to pull forward his views on when the central bank should start raising interest rates. Atlanta Fed President Raphael Bostic said with growth surging to an estimated 7% this year and inflation well above the Fed’s 2% target, he now expects interest rates will need to rise in late 2022. Fed Governor Michelle Bowman in remarks to a Cleveland Federal Reserve bank conference said she agrees prices are being driven by clogged supply chains and surging demand as the economy reopens, factors that should ease. (Reuters) Federal Reserve Chair Jerome Powell on Tuesday reaffirmed the U.S. central bank's intent to encourage a "broad and inclusive" recovery of the job market, and not to raise interest rates too quickly based only on the fear of coming inflation. "We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances," Powell said in a hearing before a U.S. House of Representatives panel. (Reuters) Malaysia Economic News The Malaysian Employers Federation (MEF) has urged the government to end the full movement control order (FMCO) with immediate effect "to stop causing further damage to the national economy and individual livelihoods". In a statement, MEF president Datuk Dr Syed Hussain Syed Husman said all sectors should be allowed to operate to avoid the risk of facing “very serious economic and social implications for a long time". (The Edge Markets) The World Bank has slashed its GDP growth projection for Malaysia for the second time to 4.5% in 2021 — from 6% estimated in Mar and 6.7% in Dec 2020 — after taking into account a flare-up in Covid-19 infections and slower-than-expected vaccine rollout. (The Edge Markets) Workers and employers in all sectors affected by the Covid-19 pandemic have been urged to apply for temporary assistance or benefits offered by the government through the Social Security Organisation’s (Socso) Employment Insurance System (EIS). Human Resources Ministry, in a statement, said among the EIS aid for workers who lost their jobs are the Job Search Allowance, Early Re-employment Allowance, Reduced Income Allowance, Training Allowance and job search assistance. (Bernama) The retail prices of RON97 and RON95 petrol and diesel will remain unchanged at RM2.67, RM2.05 and RM2.15 per litre respectively for the 24-30 Jun period. (The Edge Markets) 2 Malaysia Daybreak | June 24, 2021 Malaysia set another record with 250,529 doses of Covid-19 vaccines administered 22 Jun, compared with the previous day's 235,623 doses, according to latest data from the Covid-19 Vaccine Supply Access Guarantee Special Committee (JKJAV). Of this, 190,244 individuals received their first dose, while the other 60,285 received their second jab. (The Edge Markets) Malaysia calls for the World Bank to be a strong voice for developing countries for global vaccine equity. Science, Technology and Innovation Minister Khairy Jamaluddin said that the hoarding of vaccines by the industrialised countries was immoral, and the move had fallen short of respectable and responsible global leadership. “We are appreciative of the donations that we will be receiving from advanced countries in the coming weeks but this does not do away with what has taken place over the last few months, and that is the cornering of the vaccine market” said the Minister. (Bernama) Malaysia can look forward to strong economic recovery in the fourth quarter this year if the Government's actions to contain the virus are proven to be effective in bringing down the number of Covid-19 cases. Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said the Malaysian economy was on a solid recovery trajectory before May 2021 with a much improved real gross domestic product (GDP) growth performance in the first quarter and a strong rebound in a number of economic indicators. (The Edge Markets) Eighty per cent of Langkawi residents need to be vaccinated against Covid-19 to enable a travel bubble to be implemented on the resort island when interstate travel is allowed and national borders are reopened. Kedah Menteri Besar Muhammad Sanusi Md Nor said to achieve the percentage, the State government is working with the Tourism, Arts and Culture Ministry (MOTAC) and the Science, Technology and Innovation Ministry (MOSTI) to ensure that about 61,000 Langkawi residents receive at least one dose of vaccine.