THE recent surge in COVID-19 cases and infectivity rate have raised concerns that movement may be further restricted in selected areas with interstate travel ban – which is vital for the facilitation of economic activities – will be prolonged.
Such development seems to be holding the Malaysian equity market to ransom as it could well impact the pace of economic and corporate earnings recovery.
The latest statistics reveal that close to 700,000 have received one dose of the COVID-19 vaccines, broadly meeting Phase 1 of the vaccination programme.
“However, the key test is Phase 2 during which the Government targets to vaccinate 9.4 mil individuals over five months,” opined CGS-CIMB Research head Ivy Ng Lee Fang.
“To achieve this, we estimate the Government will need to raise the number of shots per day, ensure sufficient vaccine supplies are available and that more individuals are registered and turning up for their vaccination.”
Any major delay in the execution of the inoculation programme coupled with the increase in COVID-19 cases, could dampen market sentiment, thus prompting investors to profit-take on recovery stocks given potential earnings risks.
“We keep our FBM KLCI target of 1,699 points (forward price-to-earnings ratio [P/E] of 15.2 times). Our top three picks are Inari Amerton Bhd, Public Bank Bhd and Telekom Malaysia Bhd,” noted the research house.
To recap, Malaysia started the national immunisation programme on Feb 24 beginning with the Pfizer vaccine before expanding to the Sinovac vaccine on March 18.
Malaysia will be kicking off Phase 2 of the National COVID-19 immunisation programme today. Under Phase 2, the Government targets to administer COVID-19 vaccines to 9.4 million people comprising the elderly, the chronically ill and people with disabilities.
As of April 17, 439,289 individuals (1.9% of Malaysia’s target to vaccinate 80% of the population) have completed the entire COVID-19 vaccination regime while 695,729 individuals (2.9% of the total target) have received the first dose of the vaccine (total dosages of COVID-19 vaccine used stands at about 1.14 million).
Also as of April 17, around 8.95 mil people have registered for vaccinations, representing 38% of the targeted population of 23.6 million to be vaccinated in order to achieve herd immunity. – April 19, 2021
