Kenanga Research & Investment

Author: kiasutrader   |   Latest post: Wed, 25 Nov 2020, 10:23 AM


ESG - Navigating Sustainability on the Investment Landscape

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Last week, we organised a half-day ESG webinar led by PWC’s Sustainability Team to better understand the impact and value of sustainability in the investment landscape. Projections data up till 2050 suggest the risk of flooding in coastal areas which could be harmful to a multitude of industries (utilities, ports, industrial facilities, housing and development projects located by the coast) as well as plantation companies, with rising temperatures brought about by climate change if no action is taken immediately. As such, we advocate governmentbusiness collaborations to avert these risks for national well-being. We also favour companies that are making efforts to incorporate Integrated Reporting (IR) which provides a deeper understanding of business processes and is crucial in determining the value of sustainable initiatives. Advanced IR would include the triple bottom line methodology which measures net profits to include the impact on people, profit and planet, thus giving ESG a dollar value today. All in, we favour companies that are making strides in IR for now, and look forward to a sustainably focussed Budget 2021 next month as indicated by our Prime Minister. Our Preferred Picks are DIGI, SIMEPROP, DIALOG, ASTRO, TM, RHBBANK, AMBANK, MISC, KLCC given their efforts in IR and commitment to long term sustainability, while fundamentals warrant an OUTPERFORM call at current levels.

Last week, we organised a half-day ESG webinar led by PWC’s Sustainability Team; Andrew WK Chan (Sustainability & Climate Change Leader, South East Asia), Redha Shukor (Operations and Sustainability Leader, Malaysia) and Xing Juen Goh (Sustainability and Strategy, South East Asia). The webinar provided attendees with a thorough understanding of ESG or sustainable investing and its motivations, its impact on businesses, local and global responses taken, the value of ESG to a business, and sustainability data and disclosures. We have highlighted some of these points in our previous ESG report (dated 24th December 2019 “A Growing Tide of Responsible Investors”), but salient topics that piqued our interest were, the potential impact of climate change on Malaysian industries, and how sustainability impacts value in a business. Below are our key highlights.

Source: Kenanga Research - 27 Oct 2020

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Chart Stock Name Last Change Volume 
DIGI 4.15 -0.02 (0.48%) 2,519,000 
SIMEPROP 0.58 +0.02 (3.57%) 3,343,300 
DIALOG 3.69 -0.01 (0.27%) 9,401,300 
ASTRO 0.81 +0.01 (1.25%) 2,618,500 
TM 4.84 +0.24 (5.22%) 12,412,900 
RHBBANK 5.05 +0.07 (1.41%) 5,247,700 
AMBANK 3.33 +0.03 (0.91%) 3,727,600 
MISC 6.90 -0.01 (0.14%) 1,547,200 
KLCC 7.69 +0.05 (0.65%) 153,500 

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