CGS-CIMB Securities International Pte Ltd has maintained a neutral stance on Prime Minister Datuk Seri Ismail Sabri’s cabinet line-up as most ministers from the previous administration were retained.
In a note today, CGS-CIMB analysts Ivy Ng Lee Fang and Nagulan Ravi said that the cabinet line-up, alongside the Ismail Sabri’s recent meeting with Opposition leaders, is likely to see the Prime Minister passing the confidence vote expected to be tabled when Parliament reconvenes in September.
“With the ministers likely to be sworn in today, the market will be directing its focus to the execution of the National Recovery Plan (NRP), where further easing of restrictions are expected as 44.4% of the population completed both doses of COVID-19 vaccination while 58.9% completed at least one dose as at 28 Aug 2021,” Ng and Nagulan said.
Also in focus will be the tabling of the 12th Malaysian Plan in September and Budget 2022 in October, which could be positive for construction.
“KLCI rose 4.8% pts last week following Ismail Sabri’s appointment, likely due to optimism over less political noise in the near term after the Prime Minister reached out to opposition leaders and given continuity in policy,” they acknowledged.
“For the rally to sustain, we think investors will want to see evidence of economic activity recovery, higher vaccination rates in states with increased new COVID-19 cases and more states moving to Phase 3-5 of the NRP.
“We still believe investors could position into recovery stocks in August-September,” they added.
Ismail Sabri had announced the new cabinet line-up last Friday (Aug 27). He appointed four senior ministers but left the deputy premiership post empty – a move that is similar to his predecessor’s.
The PM also mentioned during his live telecast that the new government is a result-driven administration that needs to be able to demonstrate its early achievements within 100 days.
He added that each ministry is required to make short- and long-term plans and achieve the set targets. – Aug 30, 2021.
