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InstaForex

May 10, 2021

HIDE Implementation Makes This Counter Deplete

 Shares in retail counters declined in this morning’s trading session after the Ministry of Science, Technology and Innovation (MOSTI) ordered premises marked as Covid-19 hotspots by the Hotspots Identification for Dynamic Engagement (HIDE) system to be closed for three days.


Some locations where these retailers operate such as shopping malls, have been marked with HIDE.


However, Real Estate Investment Trusts (REITs) that have mall assets and were ordered to close by the HIDE system remained unchanged after analysts did not expect their earnings to be significantly affected.


At 9.58am, AEON Co (M) Bhd declined one sen or 0.84% ​​to RM1.18; Parkson Holdings Bhd declined half -a -sen or 2.13% to 23 sen and MyNews Holdings Bhd declined one sen or 1.1% to 89.5 sen.


Padini Holdings Bhd is seen unchanged at RM2.90 after declining RM2.86 this morning.


Pavilion REIT, Sunway REIT, IGB REIT, CapitaLand Malaysia Mall Trust and KLCC Stapled Group are also unchanged.



Central REIT jumped half a sen or 0.56% to 89.5 sen while KIP REIT declined half a sen or 0.59% to 84 sen.


According to BIMB Securities Research analyst Azharuddin Nordin in his note today, the latest list of HIDE hotspots introduced by HIDE over the weekend will have an additional impact on the market as well as consumer spending.


“The HIDE system can affect the recovery of the already weak retail sector as companies like Padini will struggle as risky shopping malls have to be temporarily closed.


“Padini's sales are mainly contributed from its premises in Kuala Lumpur and Selangor. Although movement orders are generally accepted as the new norm, we are of the opinion that the implementation of movement control beautification (PKP) is inconsistent and HIDE has become endemic, ”he said.


Meanwhile, PublicInvest Research analyst Tan Siang Hing estimates that earnings for IGB REIT and Sunway REIT are likely to be less than 1% following the mandatory closure of the premises.


“Our revenue estimates remain unchanged while waiting for more clarity on the impact of HIDE. We maintain a neutral recommendation on REITs for now, ”he explained.


According to PublicInvest Research, the premises listed as Covid-19 hotspots by HIDE include major shopping malls such as Mid Valley Megamall, Suria KLCC, Sunway Pyramid and 1 Utama Shopping Center.