Malaysia | July 27, 2021 Key Metrics Malaysia Daybreak | 27 July 2021 FBMKLCI Index 1,700 ▌What’s on the Table… 1,650 ———————————————————————————————————————————————————————————————————————————————————————— 1,600 1,550 Unisem – Halting Unisem Ipoh operations for 2 weeks 1,500 The group has temporarily halted its production at Unisem Ipoh for two weeks, 1,450 from 26 Jul until 8 Aug 2021, due to the implementation of EMCO. We expect the 1,400 loss of production to be partially offset by stronger sales from Unisem Chengdu Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 Jul-21 and favourable forex following depreciation of the ringgit. Retain Add, with an ——————————————————————————— unchanged RM10.50 TP, still based on 30x CY22F P/E. FBMKLCI 1,512.53 -10.91pts -0.72% JUL Future AUG Future Astro Malaysia – Rebuilding Astro, rain or shine 1515.5 - (-0.59%) 1512 - (-0.59%) ——————————————————————————— Astro Malaysia has launched its “Ultra Plug Play Box”, a satellite-free decoder Gainers Losers Unchanged that runs purely on the streaming medium. While this may not be the silver bullet 348 696 429 ——————————————————————————— to target ‘cord-cutters’/‘cord-nevers’, we take it as one step to address the Turnover perennial complaints over rain fade. Astro also astutely markets its Ultra Plug 4818.83m shares / RM2795.807m Play Box as the one-stop device to stream Disney+ Hotstar and Korean shows, 3m avg volume traded 5919.74m shares to target the urban audience. 3m avg value traded RM3503.33m ——————————————————————————— Regional Indices FBMKLCI FSSTI JCI SET HSI IGB REIT – Potential recovery bright spots in 4Q 1,513 3,139 6,106 1,545 26,192 ———————————————————————————————— 1H21 results below expectations despite a strong yoy performance in 2Q21. Market Indices EMCO will hit 3Q21F earnings, but earnings risks should diminish in 4Q21F. A Close % chg YTD % chg potential beneficiary of retail sector recovery; Add retained with a lower TP. FBMKLCI 1,512.53 (0.7) (7.0) FBM100 10,793.27 (0.7) (6.2) FBMSC 15,680.13 (1.0) 0.7 FBMMES 7,323.50 (1.3) (31.8) Autos – Stuck at the red light Dow Jones 35,144.31 0.2 14.8 NASDAQ 14,840.71 0.0 15.1 TIV in June fell 96% mom due to FMCO implementation while 1H21 TIV still grew FSSTI 3,138.97 (0.6) 10.4 FTSE-100 7,025.43 (0.0) 8.7 44% yoy due to sales tax holiday and low base effect during MCO 1.0. We cut SENSEX 52,852.27 (0.2) 10.7 our 2021F TIV from 580k to 500k due to delays in the re-opening of the auto Hang Seng 26,192.32 (4.1) (3.8) JCI 6,106.39 0.1 2.1 sector under Phase 3 of NRP in Sep 21. Expect TIV to drop 6% yoy. Retain KOSPI 3,224.95 (0.9) 12.2 Neutral on Malaysian autos with Sime Darby as our top sector pick. Nikkei 225 27,833.29 1.0 1.4 PCOMP 6,372.61 (2.3) (10.7) SET 1,545.10 (0.5) 6.6 Shanghai 3,467.44 (2.3) (0.2) Strategy Note – Key insights into weekly flows (19/7-23/7) Taiwan 17,403.56 (1.0) 18.1 ———————————————————————————————— Top Actives Retail investors reclaimed largest net buyer spot last week (19-23 Jul), buying Close % chg Vol. (m) CTOS and Public Bank. Foreign investors stayed as largest net seller, selling KANGER 0.070 0.0 137.8 Public Bank and Kossan Rubber. Local institutional investors turned net sellers, SMTRACK 0.090 12.5 125.1 PUC 0.175 12.9 101.2 selling CTOS and Petronas Chemical. CTOS, Public Bank and Inari were the top MAG HOLDINGS 0.200 2.6 91.9 three stocks in last week’s top net buy/sell lists. Top Glove, Kossan Rubber and DAGANG NEXCHANGE 0.730 (5.2) 76.5 CAREPLUS GROUP 1.930 (11.5) 75.2 Supermax were the top three short-selling targets last week. BCM ALLIANCE 0.155 14.8 74.7 SAUDEE GROUP 0.140 (3.4) 72.9 ———————————————————————————————— Economic Statistics Close % chg ▌News of the Day… ———————————————————————————————————————————————————————————————————————————————————————— US$/Euro 1.1801 (0.03) RM/US$ (Spot) 4.2310 (0.02) RM/US$ (12-mth NDF) 4.2775 (0.39) • 12MP, Budget 2022 to incorporate NRP, more economic recovery measures OPR (%) 1.75 0.00 • Unisem's Ipoh plant to halt ops temporarily during EMCO period GOLD ( US$/oz) 1,797.61 (0.00) WTI crude oil US spot (US$/barrel) 71.91 (0.50) • RHB IB's Indo unit hives off investment management services CPO spot price (RM/tonne) 4,481.50 2.67 • UMW Holdings expects minimal car sales for July on prolonged lockdown ———————————————————————————————————————— • Bursa approves AirAsia's five-month extension for private placement Ivy NG Lee Fang, CFA T (60) 3 2261 9073 • DNeX completes acquisition of 60% interest in SilTerra from Khazanah E [email protected] • Microlink subscribes 2m Inari Amertron placement shares for RM6.2m 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 27, 2021 Global Economic News The most important thing right now is the countries that are going to be the most helpful in getting the world back to normal amid the Covid-19 pandemic. And regardless of whether the particular countries have either soft or hard power, it should be a key foreign policy focus for those who have the resources and ability to try and help out. This was according to Partner, Sanctuary Counsels, Jonathan McClory, at the Singapore International Foundation (SIF) Public Diplomacy in Asia 2021 Conference here on 26 Jul. McClory, an independent strategy consultant specialising in soft power, public diplomacy, cultural relations, place branding and creative industries, spoke with three other speakers on the topic of “Public Diplomacy in a Post-Covid-19 World”. (Bernama) A US Federal Reserve divided over how to respond to fast-rising prices meets this week with the fresh complication of increased coronavirus infections and a global supply chain that, far from sorting out its problems, may be headed for more inflation-inducing trouble. Fed officials are likely to affirm after their two-day meeting that a strong US recovery and their planning for an eventual policy shift both remain underway. But the new risks, threatening the twin ills of slowed growth and higher prices, mean the rosy future seen in Jun seems less assured. Debate over how to shape post-pandemic monetary policy has just begun, and decisions were not expected before the fall. (Reuters) Malaysia Economic News Prime Minister Tan Sri Muhyiddin Yassin will make a statement on the National Recovery Plan (NRP) at the special sitting of the Dewan Rakyat on 26 Jul. According to the order paper for the five-day sitting, Health Minister Datuk Seri Dr Adham Baba will give a statement on efforts to combat the Covid-19 pandemic and Science, Technology and Innovation Minister Khairy Jamaluddin, who is also National COVID-19 Immunisation Programme coordinating minister, will elaborate on the national vaccination programme. Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz will explain the various government economic aid packages while a statement on the implementation of the emergency order will be made by Deputy Prime Minister and Defence Minister Datuk Seri Ismail Sabri Yaakob, expected to be on the last day of the sitting. (Bernama) The Ministry of Transport (MOT) is waiting for approval for the set up of targeted industry vaccination centres (PPVINs) for the transport sector in Johor, Penang, Pahang, Terengganu, Perak and Selangor. Minister Datuk Seri Dr Wee Ka Siong in a statement today, said there are currently five transport sector PPVINs to support the National Covid-19 Immunisation Programme (PICK). (Bernama) The government has decided not to advise the Yang di-Pertuan Agong (YDPA) to extend the Proclamation of Emergency beyond 1 Aug, according to de facto Law Minister Datuk Seri Takiyuddin Hassan. Further, in a surprising twist, Takiyuddin also revealed that the government has decided, based on Article 150(3) of the Malaysian Constitution, to revoke all emergency ordinances that have been promulgated during this Proclamation of Emergency early this year. He said the decision to revoke all six emergency ordinances was achieved during a Cabinet meeting on 21 Jul. The special sitting for the Dewan Rakyat commenced on 26 Jul and will adjourn on 2 Aug. (The Edge Markets) 2 Malaysia Daybreak | July 27, 2021 The government has agreed to extend the contracts of about 14,000 medical doctors, dentists and pharmacists for a period of two years (or 7,000 per cohort/year) which will involve a financial implication of RM1.2bn, said Finance Minister Tengku Datuk Seri Zafrul Abdul Aziz. This is a follow-up to the government's decision for contract-appointed medical officers, dental officers and pharmacists to be offered contractual appointments for a period of two years after completing the compulsory service period to ensure continuity of service and preparation for specialist studies. (Bernama) Prime Minister Tan Sri Muhyiddin Yassin on 26 Jul said that the government anticipates that most states will move into Phase 4 or the final phase of the National Recovery Plan (PPN) by Oct at the earliest. In a briefing on PPN at the special sitting of Dewan Rakyat 26 Jul, the premier said the anticipation was based on continuous efforts to implement the recovery process and the immunisation programme that is currently running smoothly.