The Conditional Movement Control (PKPB) orders in Kuala Lumpur, Selangor and Putrajaya will not have a significant impact on business activities after firms are still allowed to operate based on standard operating procedures (SOPs) implemented in each industry.
According to the MIDF Research report, PKPB's big impact on the economy is certainly due to weak consumer spending and its spillover effect on the service industry, especially the sub-sector related to consumption, especially retail trade, restaurants, hotels, tourism, education and recreational services.
Therefore, in terms of economic growth, we expect the impact of PKPB on national economic growth for the fourth quarter of 2020 (4Q20) is minimal. Therefore, we maintain the projected contraction in Gross Domestic Product (GDP) of -4.8% for this year, ”said the research firm.
MIDF Research added that consumer spending will be supported by increased online purchases assisted by e-commerce platform facilities, home delivery services and online financial services including e-wallets and Internet banking.
In addition, MIDF Research also said telecommunications services would have a positive impact from the increasing public reliance on Internet services driven by the increase in the number of online purchases and work orders from home.
However, according to the firm, real estate investment trusts (REITS) will be severely affected.
The research firm also maintained its FBM KLCI projections for the end of this year at 1,400 points. The firm believes investors need to choose potential stocks with a solid foundation, defensive earnings and attractive dividend yields.
Among the potential stocks are Favelle Favco Bhd, UEM Edgenta Bhd, BIMB Holdings Bhd, Ranhill Utilities Bhd, Gas Malaysia Bhd, Tenaga Nasional Bhd (TNB), Top Glove Corp Bhd, Sunway Construction Group Bhd, IJM Corp Bhd, Dialog Group Bhd., Supermax Corp Bhd and Tasco Bhd.
