Malaysia Daybreak | 11 May 2021 FBMKLCI Index
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Malaysia | May 11, 2021 Key Metrics Malaysia Daybreak | 11 May 2021 FBMKLCI Index 1,700 ▌What’s on the Table… 1,650 ———————————————————————————————————————————————————————————————————————————————————————— 1,600 1,550 Strategy Note – Nationwide MCO 3.0 from 12 May to 7 Jun 1,500 1,450 Malaysia has announced a nationwide MCO 3.0 from 12 May to 7 Jun to curb the 1,400 spread of Covid-19 which has accelerated in recent weeks. We estimate every 1,350 month of MCO will shave 0.3% pt from GDP growth. This development is May-20 Jul-20 Sep-20 Nov-20 Jan-21 Mar-21 May-21 negative as it raises the risk of earnings disappointments for the REIT, ——————————————————————————— tourism-related, casino, consumer, property, and auto sectors. FBMKLCI 1,583.92 -3.53pts -0.22% MAY Future JUN Future Strategy Note – Key insights into weekly flows (3/5-7/5) 1581.5 - (-0.41%) 1579.5 - (-0.35%) ——————————————————————————— Foreign investors remained the largest net sellers last week; have been net Gainers Losers Unchanged sellers for the past eight weeks. Local institutional investors were the 298 845 396 ——————————————————————————— second-largest net sellers, though net sell flows fell wow. Retail and nominees Turnover investors were net buyers but their net buying momentum fell last week. Genting 6013.51m shares / RM3534.959m Malaysia, CMSB and IHH were among the new names featured in top net 3m avg volume traded 8476.69m shares buy/sell lists. Kossan Rubber, LCT and Genting trended among investors’ top net 3m avg value traded RM4697.04m ——————————————————————————— buy/sell lists. Regional Indices FBMKLCI FSSTI JCI SET HSI 1,584 3,182 5,976 1,588 28,596 Agribusiness – Attractive CPO price discount against SBO ———————————————————————————————— Market Indices Malaysian palm oil stock levels grew 7% mom to 1.55m tonnes as at end-Apr Close % chg YTD % chg 2021. This is 5% above our forecast due mainly to lower domestic usage. Rising FBMKLCI 1,583.92 (0.2) (2.7) FBM100 11,278.04 (0.3) (1.9) stocks and signs of better-than-expected recovery in palm oil output could limit FBMSC 16,851.64 (0.8) 8.3 price upside for CPO in the near term, in our view. We project palm oil stocks FBMMES 8,137.84 (2.3) (24.2) Dow Jones 34,742.82 (0.1) 13.5 rising by 3% mom to 1.59m tonnes by end-May 2021F. Reiterate Neutral as CPO NASDAQ 13,401.86 (2.5) 4.0 prices have peaked or are close to peaking. FSSTI 3,182.41 (0.6) 11.9 FTSE-100 7,123.68 (0.1) 10.3 SENSEX 49,502.41 0.6 3.7 Hang Seng 28,595.66 (0.1) 5.0 Pentamaster Corp Bhd – Building blocks of growth JCI 5,975.79 0.8 (0.1) KOSPI 3,249.30 1.6 13.1 We expect stronger sales and PAT in 2Q21F, driven by higher IGBT and Nikkei 225 29,518.34 0.5 7.6 PCOMP 6,317.41 0.9 (11.5) 3D-magnetometer sensor solutions going into EV and smartphone markets. The SET 1,588.15 0.2 9.6 group is investing RM25m for medical device expansion in Batu Kawan. Shanghai 3,427.99 0.3 (1.3) Taiwan 17,235.61 (0.3) 17.0 Reiterate Add and RM5.85 TP, still based on 36x CY22F P/E. ———————————————————————————————— Top Actives Close % chg Vol. (m) FOCUS DYNAMICS 0.080 (15.8) 483.3 KTG 0.205 (8.9) 236.0 ▌News of the Day… SEDANIA 0.315 1.6 166.8 ———————————————————————————————————————————————————————————————————————————————————————— TANCO HLDGS 0.130 18.2 132.1 KANGER 0.075 25.0 112.9 • Nationwide MCO to begin from 12 May to 7 Jun BUMI ARMADA 0.450 5.9 95.3 • CPO price could hit the RM5,000/tonne in the near term CAREPLUS GROUP 2.290 (5.0) 94.7 VELESTO ENERGY 0.145 (3.3) 74.2 • Gamuda denies reports quoting RM5.2bn price tag for the sale of its highways ———————————————————————————————— • UMW Toyota’s sales up 12.7% yoy in Apr 2021 Economic Statistics Close % chg • Tan Sri Mohd Bakke Salleh resigns from E&O board US$/Euro 1.2136 0.05 • MAHB asks the government to reconsider plans to liquidate Subang Airport RM/US$ (Spot) 4.1050 (0.04) RM/US$ (12-mth NDF) 4.1434 (0.45) OPR (%) 1.75 0.00 GOLD ( US$/oz) 1,835.74 (0.02) WTI crude oil US spot (US$/barrel) 64.92 0.03 CPO spot price (RM/tonne) 4,735.00 1.74 ———————————————————————————————————————— 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 | May 11, 2021 Global Economic News Federal Reserve officials would like to see higher inflation, more wage growth and several months of strong employment gains averaging 1 million jobs added before they would consider adjusting monetary policy, Chicago Fed Bank President Charles Evans said. (Reuters) Thailand detected its first case of Indian Covid-19 variant, involving a Thai mother and son returning from Pakistan. Centre for Covid-19 Situation Administration (CCSA) assistant spokesperson Dr Apisamai Srirangsan said the 42- year-old woman and her three young sons aged between four and eight arrived in Thailand from Pakistan on 24 Apr. (Bernama) Malaysia Economic News The whole of Malaysia will be placed under the Movement Control Order (MCO) from 12 May to 7 Jun, said Prime Minister Tan Sri Muhyiddin Yassin in a statement, as the country grapples with rising Covid-19 infections. Key restrictions include: Inter-state, inter-district travel is not allowed, with the exception of emergencies, work, vaccinations appointments All social gatherings are prohibited, including weddings, dinner and birthday parties, official government and private sector events Nikah (solemnization) is allowed in accordance to number of attendees and SOPs in place All sports and recreational activities are prohibited, except individual activities in open space such as jogging and cycling All educational institutions are to be closed, with the exception of students sitting for international exams Daycare centre are allowed to operate, with strict SOPs Only three people are allowed in private vehicles, taxis, and e-hailing vehicles, including the driver Dine-ins at eateries are prohibited. takeaways and deliveries are allowed. Employers required to implement work-from-home policies, with no more than 30% of management staff in office House visits and cemetery visits are prohibited during Hari Raya Aidilfitri prayers in mosques and suraus are only allowed to a maximum of 50 people for premises that can accommodate more than 1,000 worshipers and 20 people for premises that can accommodate less than 1,000 worshipers Prayers at Non-muslim places of worship is restricted, SOPs to be determined by ministry of unity (The Edge Markets) Please refer to our note for details Employers who do not allow employees to self-quarantine while waiting for Covid-19 screening test results will have their premises shut down immediately, Health Minister Datuk Dr Adham Baba said. According to him, the action comes under the conditions of the General Standard Operation Procedures and the General Guidelines on the Approval of Operations Movement of Company Employees during Movement Control Order (MCO) issued by the International Trade and Industry Ministry (MITI). (Bernama) Although the value of construction work done shrank 10.5% yoy to RM31.4bn in 1Q21, this was an improvement from the 14.2% yoy in 4Q20. The private sector continued to drive construction activity with a 55.2% share or RM17.3bn, while the public sector has a 44.8% share at RM14.0bn. (DOSM) 2 Malaysia Daybreak | May 11, 2021 From 13 May, all travellers arriving in Malaysia from Singapore must undergo a mandatory 14-day quarantine due to the prevalence of new Covid-19 variants, said health director-general Tan Sri Dr Noor Hisham Abdullah. He said Malaysia has included Singapore as one of the countries reporting the spread of Covid-19 variants of concern in its community. The decision was made based on a report by the republic's health ministry which had cited the South African B.1.351, UK B.1.1.7 and Brazilian B.1.1.28 (P1) variants, as well as the B.1.617.1 variant of interest from India. (Edge Markets) The Hotspots Identification for Dynamic Engagement (HIDE) system is able to identify shopping malls which are potential Covid-19 hotspots despite ‘blindspots’ in the system. National Covid-19 Immunisation Programme Coordinating Minister Khairy Jamaluddin said the blindspot occurs when visitors fail to scan the MySejahtera QR code, though most business premises have been registered in the HIDE system. (Bernama) The Malaysian Medical Association (MMA) has suggested for the Ministry of Health (MoH) to conduct mass Covid-19 screening in hotspots areas identified by Hotspot Identification for Dynamic Engagement (HIDE). Its president Prof Datuk Dr Subramaniam Muniandy also proposed that the MoH consider conducting vaccination en masse to interrupt the transmission in hotspots. (Bernama) Following the imposition of the Movement Control Order 3.0, the Selangor state government announced a deadline extension on applications for the Selangor Small and Medium Enterprise (SME) Digitalisation Matching Grant. The deadline for the grant, which was originally due on 15 May, has since been extended to 15 Jun.