https://twitter.com/bernamadotcom/status/1349196751849209858?s=21

Wearing gloves for Jokowi vaccine

Yes, CDC have had to temporarily adjust guidelines due to extreme shortage of gloves in the US

The test argument by JPM is BS. Testing is only increasing or at least staying at a very high level

What difference does the bonus issue make at all?

Only unsophisticated retail investors place any importance on bonus issues

I think we will see a further sell-down in domestic plays today as UK/US investors would have only had the chance to assess the state of emergency and worsening Covid situation overnight. Could be ugly

Orderbook has already extended from to 510 days at 1Q result on 9 December to 560 days currently

I think we will see a further sell-down in domestic plays today as UK/US investors would have only had the chance to assess the state of emergency and worsening Covid situation overnight. Could be ugly

The pain is only going to worsen for the crazy shorts

'Herd immunity' is a myth - it's never been achieved

Why do we still need vaccinations for polio?

Ugly outlook for the domestic economy from CLSA:

Industrial production index (IPI) growth fell for the second straight month in November, down by 2.2% YoY from a 0.5% contraction in October. The rebound in IPI from its low point in April (from 78.7 to 113.8 in October) has hit a speed bump following a surge in Covid cases that has triggered the re-imposition of stricter Conditional Movement Control Orders.

All sectors saw output contract MoM in November. On a year-on-year basis, the slump in mining (-15.4% YoY) weighed down the overall index, reinforced by a 2.5% YoY decline in electricity output. Meanwhile, manufacturing output continued to expand (by +2% YoY from +2.4% in October) with gains in the core electronics products and transport equipment.

However, we flag the moderation in manufacturing output driven by Covid-induced disruptions to supply chains of imported materials, noting that difficulties and rising costs faced by the domestic manufacturing sector will heighten in the near term as Covid restrictions in major trade partners were recently tightened. Malaysia also announced a second round of full lockdown (similar to the one imposed in February) on Monday in light of the dramatic spike in domestic cases.

Separately, labour market data worsened in November. The strict standard operating procedures imposed onto businesses to contain the accelerated spread of Covid has led to a rise in job losses as well as the cancellation or freezing of new hires.

The unemployment rate remained elevated at 4.8% in November (Oct: 4.7%), with the number of unemployed persons up by 2.2% YoY to a five month high of 764.4k from 748.2k in October. Meanwhile, persons employed contracted marginally by 0.1% YoY in November.

The labour force participation rate edged down to 68.4% from 68.5% in October with little change in the size of the labour force (an additional 5.2k persons to 15.96mn persons in November).

While gloves won't necessarily be mandatory for administering the vaccine, many will still choose to wear them. Very small price to protect healthcare workers:
https://www.politico.com/news/2021/01/11/biden-covid-vaccination-plan-457667

In a zero/negative interest rate world... A 10%+ divvy is pretty attractive

Posted by holyman1977 > Jan 11, 2021 2:47 PM | Report Abuse

Can I check, estimated dividends for FY21 is 0.85 ringgit, so I supposed for Q2 to Q4, its 0.85 - 0.165 (1Q) = 0.685 ringgit per share? Is this correct?

IMHO, that is alot!

That is correct around 10%+ yield from next 3 quarters of dividends alone

On the vaccines - I heard from Dr Khor Swee Keng that it is very rare that a vaccine or contraction of a disease to provide life-long immunity...

So an annual booster shot is likely to be required

Also its not yet known whether the vaccines will be effective against the current and future mutations

It is quite possible that Covid-19 will end up being endemic

All bodes well for long-run glove demand

Nice 3.6%+ jump this morning already.

On the longer-term industry outlook, some supportive comments from Hartalega/Credit Suisse over the weekend:

From Stephen Hagger, head of Credit Suisse Malaysia:

Hartalega: “Demand to exceed supply for next 3-4 years”

Hartalega, the world’s 2nd largest glove player (~40bn pieces) after Top Glove (~90 bn pieces), presented at the CS ASEAN conference. The stock has historically traded at a premium to the sector, due to it being predominantly a higher margin nitrile player, but also due to its management. This has played out during this crisis. Hartalega has been praised for its treatment of workers, while others have not. It can also not be accused of being opportunistic during the pandemic, as it is a price follower, which should pay off in the long term, when supply catches up with demand. Often viewed as the voice of reason in the sector, here are some of their thoughts:

Management expects demand to exceed supply for the next 3-4 years:
* Global demand is increasing as a result of mass testing & the vaccination programmes. They are expecting 30% growth in demand from developed markets & 100% from developing markets.
* Management gave some guidance as to the constraints by new entrants: It takes 9-12m to build a plant, 4-6m for commissioning, with labour & accommodation being a particular constraint in Malaysia. The supply of raw materials for nitrile are also constrained.

This situation will feed through to higher for longer ASPs. Hartalega experienced a rise of > 50% in 4QCY20 ASPs & they are expecting another 50% increase in 1QCY21. This is as a result of industry wide ASP hikes, but also as a result of being a price follower.

As fundamentals were realised, the sector staged a convincing (12-30%) bounce last Friday.

From Stephen Hagger, head of Credit Suisse Malaysia:

Hartalega: “Demand to exceed supply for next 3-4 years”

Hartalega, the world’s 2nd largest glove player (~40bn pieces) after Top Glove (~90 bn pieces), presented at the CS ASEAN conference. The stock has historically traded at a premium to the sector, due to it being predominantly a higher margin nitrile player, but also due to its management. This has played out during this crisis. Hartalega has been praised for its treatment of workers, while others have not. It can also not be accused of being opportunistic during the pandemic, as it is a price follower, which should pay off in the long term, when supply catches up with demand. Often viewed as the voice of reason in the sector, here are some of their thoughts:

Management expects demand to exceed supply for the next 3-4 years:
* Global demand is increasing as a result of mass testing & the vaccination programmes. They are expecting 30% growth in demand from developed markets & 100% from developing markets.
* Management gave some guidance as to the constraints by new entrants: It takes 9-12m to build a plant, 4-6m for commissioning, with labour & accommodation being a particular constraint in Malaysia. The supply of raw materials for nitrile are also constrained.

This situation will feed through to higher for longer ASPs. Hartalega experienced a rise of > 50% in 4QCY20 ASPs & they are expecting another 50% increase in 1QCY21. This is as a result of industry wide ASP hikes, but also as a result of being a price follower.

As fundamentals were realised, the sector staged a convincing (12-30%) bounce last Friday.

Still trading on at least a 15% divvy yield for FY21

We should see another 10%+ day today

I think you'll find most analysts are using their estimate of 'normalised' earnings 2-3 years out for their TPs

According to KJ - the vaccine rollout is only going to be completed by mid-2022. Politicians are typically overly optimistic. Experts, e.g. Dr Khor Swee Keng, think it will take closer to the end of 2022 at best. Looks like a very long-time before things normalise and any chance of borders opening...

I think the short squeeze will continue next week