A Medical personals from Petaling District Health Department collects sample for Covid-19 testing from a children at Goodyear Court flats in Subang Jaya.(Oct 29,2020). - AZHAR MAHFOF/The Star WHEN Malaysia imposed the movement control order (MCO) on March 18 last year, the 117 positive Covid-19 cases that day was enough to shake the nation. This is a far cry from the 2,643 cases recorded yesterday, which has sparked concerns over renewed restrictions in the country as the government seeks a targeted approach to break the chain of infections. For 47 days last year, the streets were empty and the economy grinded to a halt as businesses were required to close, except for those involved in essential services. Businesses and employers are pleading for targeted measures rather than a full-fledged MCO this time around and it is understandable why, after the scars they got last year. The gross domestic product (GDP) was hammered to a low of -17.1% in the second quarter, companies that were having liquidity problems were forced to shutter and unemployment rose. The GDP improved to a contraction of 2.7% in the third quarter but the fourth quarter is expected to see a contraction due to the reimplementation of the conditional MCO after a period of relaxation.Balancing act: The laggard effects to the economy of a full-fledged MCO are not something Malaysia can afford, but a targeted approach is probably something urgently needed to curb the spiralling of Covid-19 cases as it buys time for the arrival of the vaccine. And as the nation starts to heal from the aftermath of the pandemic, the spread of Covid-19 has only gotten worse, which puts the government in a tight situation on whether to protect the economy, or the people. The laggard effects to the economy of a full-fledged MCO are not something Malaysia can afford, but a targeted approach is probably something urgently needed to curb the spiralling of Covid-19 cases as it buys time for the arrival of the vaccine. Trident Analytics Sdn Bhd founder and chief research officer Lim Tze Cheng tells StarBizWeek that the economy cannot withstand another full-fledged lockdown. “It’s a very difficult balance for any authorities, not only for Malaysia but also globally. It’s a very tough call. “A reason why a lot of countries are not technically doing a lockdown because the vaccine rollout is now in place. “We have to come to terms that Covid-19 will be here to stay. Basically, another lockdown is not a solution, ” says Lim. The Federation of Malaysian Manufacturers (FMM) expresses its fear over the collapse of the business sectors and economy should a total lockdown be instituted, given that the several major states are the hub and heart of the country’s economic activities. President Tan Sri Soh Thian Lai says they support a targeted CMCO, stricter standard operating procedures (SOPs) and travel restrictions, but not a total lockdown like what was implemented in March 2020. “As it stands, the business fraternity and the economy are still reeling from the impact of the pandemic and the first lockdown and most have yet to rebuild their business back to the pre-Covid-19 level. “The business community vividly remembers the horrible and painful impact of the MCO that had crippled the operations of most businesses, ” he says in a statement, adding that FMM a lockdown of four weeks and above will render their business sustainability down to only one to three months. Kenanga Research is of the view that there is a risk that tougher restrictions may be implemented and extended, which would weigh heavily on economic growth prospects, should the local Covid-19 condition substantially worsen before vaccines are adequately distributed. But over at the stock market, its disconnect with the economy continued widening as retailers started to price in the implementation of an MCO which led to much exuberance in the local bourse last year. Retail investors are back as they rush to buy rubber glove counters again, pushing the benchmark FBM KLCI up by 30.24 points or 1.89% yesterday to 1,633.19 points. New index entrant Supermax Corp Bhd led the gainers after it surged RM1.25 or 20.66% to RM7.30. Hartalega Holdings Bhd was up RM1.60 to RM12.50 while Top Glove Corp Bhd jumped 70 sen RM6.50. The three rubber glove makers added 22.9 points to the FBM KLCI. Rubberex Corp (M) Bhd and Careplus Group Bhd – the smaller players in the sector – both hit limit up yesterday. Rubberex closed 44 sen higher at RM1.92 or a 29.73% jump while Careplus added 65 sen to RM2.95, or a 28.26% increase. The latter hit an intraday high of RM2.98. Whether the sharp rebound was a result of direct long-term buying interest of those glove stocks or short covering of previously sold down gloves stocks should be answered in the days ahead. On how an MCO could impact the stock market, Lim says it would not be something massive as long as it is a targeted measure. “I think the mindset (of retail investors) will be different this time around. March last year was a very good learning experience. “If there were to be a full lockdown, I think people would jump into the market, ” says Lim.
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