WHILE the exponential surge in vaccination is encouraging, another issue may soon surface: supply will exceed demand in that sign-ups for inoculation is not picking up as fast as the availability of vaccines.
This will give rise to a peculiar situation. Vaccine administrating capabilities may soon reach a point where there are not enough sign-ups for vaxing to hit 80% which is the herd immunity target.
“Based on the projected vaccination trajectory (supply) vs demand, we estimate that almost everyone that’s already signed up on MySejahtera will be inoculated by mid-September,” projected Hong Leong Investment Bank (HLIB) Research head Jeremy Goh in a strategic note.
“Sounds good but not entirely as current sign-ups on MySejahtera only form 55% of population (as of July 11) vs the herd immunity goal of 80%.”
To fix the “vax gap” which now stand at 25% of the Malaysian population (ie 80% herd immunity target minus 55% sign up rate), sign-ups on MySejahtera needs to increase by 0.14% (of the population) daily from now until year-end to reach the 80% herd immunity target, according to the research house.
“We believe this pace isn’t out of reach as historical sign-ups have risen at a higher average daily rate of 0.38% (of population),” reckoned HLIB Research. “Closing the vax gap would complete the entire vaccine demand-supply equation needed for herd immunity to be achieved by year end.”
Assuming that herd immunity can be achieved, other challenge posers on the supply side include “vaccine nationalism” (eg Thailand is considering regulating the export of AstraZeneca vaccine) or possible supply squeeze if countries implement a third booster jab.
“From the demand perspective, unless mandatory vaccination is enforced, closing the vax gap entirely would be tough due to anti-vaxxer propaganda, alongside challenges in reaching out to rural folks and those not connected via smartphones,” observed HLIB Research.
At the end of the day, the research house opined that a vaccination ramp up is crucial for Malaysia given it is one of the three thresholds needed to expedite the re-opening phases of its National Recovery Plan (NRP).
With higher levels of inoculation, ICU and mortality rates should also ease among the infected, hence providing a much needed relief to the healthcare system.
“If this happens, absolute daily cases can perhaps take a lesser weightage in determining the transition along the NRP’s phases,” noted HLIB Research.
“For now, our base case assumes Malaysia will transition to Phase 2 in August and Phase 3 towards end-September/early-October. We maintain our 2021 GDP (gross domestic product) forecast at 4% and FBM KLCI target at 1,660 (16.5 times price-to-earnings ratio [PE]). – July 16, 2021
