• 2020 is a washed out year and we believe the economy may recover in 2021, given the resumption in business activities and potential vaccine availabilities next year.
• On the market outlook, we think it could be a broad based upward move next year as recovery-themed sectors will be in focus. Hence, we believe, market participants are positioning in that direction for 2021.
• Sector wise, we like travel, logistics, consumer, construction, plantation, O&G, packaging and healthcare as we opine broad recovery will be anticipated.

Covid-19 and vaccine progress

• Prolonged Covid-19 situation… The Covid-19 cases are still rising and most of the countries globally have resurgence of cases of second and third waves, with several places in curfew or lockdown modes, this may still pressure business confidence and activities at least for the near term.

• …but positive vaccine developments may ease the fear next year. Given some of the global pharmaceutical companies have developed positive vaccine progress at this juncture and that may provide a feel-good factor for business owners and public to potentially return to normalcy as soon as possible.
• Some concerns on vaccine. Despite the positive progress lately, we believe there are several concerns on (i) when is the vaccine available as well as the (ii) safety concerns on the vaccine jab, thus economic recovery process may take longer-thanexpected. Hence, we think the Low-Touch-Economy and the new normal of the SOP (wearing face mask and social distancing) will persist over the foreseeable future.
• Covid-19 vaccine efforts by Malaysia. Malaysia has (i) joined the COVAX plan, paying RM94m upfront to cover 10% of the population, (ii) signed an agreement with China to be given priority access to Covid-19 vaccines and (iii) signed the agreement with Pfizer to obtain 12.8m doses of its Covid-19, covering 20% of the population. Still, a definite date for the vaccine to arrive is unknown at this juncture.

Source: Mplus Research - 14 Dec 2020