• Live to fight another day. The Government announced acomprehensive stimulus package valued at MYR250bn(16.5% of 2019’s GDP), designed to ensure that people andbusinesses have a safety net and support to survive thischallenging time. The lengthy gestation period of COVID-19means that a prolonged containment is necessary, albeiteconomically destructive. MYR128bn has been earmarkedto protect the people’s welfare while MYR100bn is tosupport businesses including SMEs, coupled with theMYR20bn initially announced by Tun Mahathir Mohamad.

• Positive for consumers and businesses. The measure isheavily focused on the man in the street as well as small andmedium enterprises (SMEs) to alleviate the impact of theCOVID-19 pandemic with the highlights being the reducedEPF contributions, dispensation to make withdrawals fromEPF savings, and automatic moratorium on loans. Theseinitiatives will help to sustain consumer spending. Taken as awhole, we believe these measures are sufficientlycomprehensive and granular to cushion the economy fromthe pandemic.

• Growth revised lower. Despite the myriad of stimulusmeasures announced, we still expect economic activity tomoderate significantly in 2Q20 before gradually recoveringin 2H20. Of course, this view relies heavily on theassumption that the pandemic can be contained at amanageable level in the next few weeks. In total, GDPgrowth is now expected at 0.0% (from 4%) in 2020 before astrong rebound to 5.7% in 2021.

• Fiscal deficit to rise. The Government’s fiscal injection ofMYR25bn could effectively increase the budget deficit from3.2% of GDP to 4.9% but is unlikely to spark a ratingdowngrade. This unprecedented condition that the globaleconomy is facing requires significant fiscal support, which isalso being conducted by many other countries. Hence, ratingagencies would likely see this as a global issue and providesome leeway for most of the countries.

•Strategy. The extensive monetary and fiscal measuresbeing implemented around world should be supportive ofrisk assets, but is also akin to governments and central banksexpending much of their policy ammunition. Near termhowever, market volatility is likely to remain elevated in linewith COVID-19 news flow as infection rates in keytransmission centres continue to grow. Market conditionsare fertile ground for traders, although capital preservationis paramount. Our base-case assumption for the COVID-19pandemic to be contained within 1H20 remains viable.Investors with longerterm investment horizons should beginpositioning for a cyclical recovery. This involves graduallyaccumulating resilient, quality stocks in the banking, oil &gas, construction, plantations, gaming, and technologysectors.

Easing cash flow of affected businesses• Businesses in the tourism sector are allowed to defermonthly income tax instalment payments from April toSeptember• Affected companies are allowed to revise profit estimatesfor 2020 with respect to the payments without penalty• Tourism and hospitality sector will enjoy a 15% discounton monthly electricity bills from April to September• Bank Negara Malaysia (BNM) provides MYR2bn relieffacility for SMEs at 3.75% interest rate• Bank Simpanan Nasional (BSN) provides MYR200m microcredit at 4% interest rate• All banks are required to reduce monetary burden in theform of payment moratorium comprising R&R loans• MAHB to cut rental for tenants, landing charges andparking fees at airports

Stimulate demand for travel and tourism• MYR500m will be allocated for voucher and tourismpromotion and each person is eligible for tourism vouchersof up to MYR100• Personal income tax relief of up to MYR1,000 onexpenditure related to domestic tourism

Boosting rakyat-centric economic growth• Workers may reduce EPF contributions to 7% from 11%,from 1 Apr to 31 Dec 2020• Household Living Aid (Bantuan Sara Hidup (BSH)recipients will receive MYR200 cash in March instead ofMay, additional MYR100 cash in May, and anotheradditional MYR50 in e-Tunai• Agrofood facility of MYR1bn will be provided by BNM atan interest cost of 3.75%• Allocation of MYR2bn for the implementation of smallinfrastructure projects especially in rural areas

Promoting quality investments• Quota of 1,400MW for solar power generation will beopen for bidding. This is expected to involve MYR5bn ofprivate investments and generate 25,000 jobs• BNM will provide an SME Automation & DigitalisationFacility of MYR300m at an interest cost of 3.75%• Securities Commission Malaysia and Bursa Malaysia willwaive listing fees for one year, for companies seeking listingon LEAP or ACE markets, as well as companies with marketcapitalisation of less than MYR500m seeking listing on theMain Market• MYR500m will be co-invested and matched by privateinvestors on a ratio of at least one to three, raising a totalMYR2bn for investment into early-stage and growth-stageMalaysian companies• Import duty and sales tax exemption on importation orlocal purchase of machinery and equipment used in portoperations for three years commencing 1 Apr 2020• Government-link companies (GLCs) such as TenagaNasional (TNB MK, NEUTRAL, TP: MYR12.88) will investMYR13bn to accelerate projects such as LED street lightsand rooftop solar installations

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Stayin’ Alive, Stayin’ Alive…Strategy - Malaysia

COVID-19 infection trend

Figure 1: 2020 Economic Stimulus Package (27 Feb 2020)

Financial assistance to employees on unpaid leave•Monthly financial aid of MYR600 for every qualifiedemployees for a maximum duration of six months• The financial aid is eligible for employees with given noticeperiod beginning 1 Mar, and contributors to EmployeeInsurance System (EIS) with existing monthly salary lessthan MYR4,000• This measure is estimated to cost up to MYR120m

Electricity discounts for sectors affected by COVID-19• In addition to the tourism sector that will be receiving 15%discount on electricity charges mentioned in the previousstimulus package, other commercial, agriculture anddomestic electricity consumers will enjoy a 2% discount forthe similar period (between 1 Apr and 30 Sep 2020).• The cost of the 2% discount is expected to reachMYR500m

Early handout of BSH• An early payment of up to MYR200 (total MYR760m) to allBSH recipients on 16 Mar 2020 benefitting around 3.8mBSH households• Additional payment of MYR100 (total MYR500m) will behanded out in May 2020, benefitting 5m BSH recipients

Implementation of small infrastructure projects• MYR2bn worth of small infrastructure projects will start inApr 2020.• The implementation will be overseen by the ChiefSecretary and a weekly report will be given to the PrimeMinister• All these projects will focus on the infrastructuredevelopment in rural areas and will be executed by localbumiputera contractors• The Ministry of Finance has increased the procurementthreshold value for balloting from MYR50,000 toMYR100,000 and for quotations from MYR500,000 toMYR800,000, effective 16 Mar 2020

Source : RHB, Various media reports

Figure 2: Additional strengthening measures to the existing Economic Stimulus Package 2020 (17 Mar 2020)

Source: Bloomberg

Source: Google

Note: ^FY20 valuations refer to those of FY21Source: Company data, RHB

Moratorium on repayment of loans• Banks to automatically grant moratorium on all loan andfinancing repayments (excluding credit cards) by individualsand SME borrowers for six months from 1 Apr 2020• For credit card balances, where individuals demonstratedsigns of repayment difficulties, banks shall automaticallyconvert their balances into term loans with tenures nolonger than three years and carry not more than a 13%effective rate from 1 Apr to 31 Dec 2020• Banks are strongly encouraged to facilitate corporateborrowers' moratorium requests, which may includeadditional financing• Loans that are granted moratorium, converted or R&Rneed not to be tagged as R&R or impaired loans in CCRIS

Ample liquidity conditions• BNM will continue to provide daily MYR liquidity tobanking institutions through reverse repo, purchase ofgovernment securities, and standing facility• BNM has also taken pre-emptive measure through therecent reduction in SRR by 100 bps and flexibilities grantedto principal dealers

Revising lending/financing limits• Requirements on lending to the broad property marketsector and for purchasing shares or unit trust funds are to belifted• Limit for exposures to counterparties connected to TenagaNasional, Petronas and Telekom Malaysia (T MK, NEUTRAL,TP: MYR3.90) is temporary increased to 35% from 25%–subject to certain conditions

Drawdown of prudential buffers• Banks are allowed to drawdown 2.5% of CCB, operatebelow 100% LCR, and reduce regulatory reserves againstexpected losses to 0%• Banks are expected to rebuild their buffers to minimumregulatory requirements by 30 Sep 2021• NSFR minimum requirement lowered to 80%, butimplementation date remains on 1 Jul. Banks shall meet the100% minimum requirement by 30 Sep 2021

MFRS 9 and financial reporting requirements• Banks’ guidance should reflect the temporary nature ofshock and fully account for the economic and financialsupport measures announced in deriving the ECL• BNM continues to engage with relevant standard settingbodies on the potential impact of ECL provisioning underMFRS 9.

Easing operational burden• Extend deadlines for regulatory and supervisorysubmission to BNM, including results of the stress test forthe period up to 30 Jun 2020 and regulatory applicationsthat have been affected by the Movement Control Order(MCO)

Source : RHB, Various media reports

Figure 3: BNM measures to assist borrowers/customers affected by COVID-19 (25 Mar 2020)

Analysts

Alexander Chia+603 9280 8889alexander.chia@rhbgroup.com

Economist

Peck Boon Soon+603 9280 2163bspeck@rhbgroup.com

Makcik Kiah: “The Government has got us covered”

Reduction in contribution and withdrawal from EPF• EPF members under the age of 55 can withdraw savings up to MYR500 a month for the next 12 months• Reduction in EPF contribution from 11% to 7%

Allocation to Ministry of Health (MOH)• MYR500m allocation to purchase equipment such as ventilators, ICU and protective equipment• MYR100m allocation to allow hospitals to employ more nurses on a contract basis

Allocation to State Governments• MYR130m allocated to state governments to help hawkers and small business owner affected by COVID-19

Extension of PTPTN loan repayments• Suspension of PTPTN loan repayments to be extended from three months to six months until 30 Sep 2020

Source : RHB, Various media reports

Figure 4: Additional measures to reduce effects of COVID-19 (23 Mar 2020)

Allocation to combat COVID-19• Additional allocation of MYR1bn for the purchase of equipment needed to combat COVID-19. This includes getting medical expert services from the private healthcare side• MYR8m fund to cover COVID-19 testing costs of up to MYR300 for all insurance policy and takaful holders• Deferment of insurance premium payment for those who are affected by COVID-19• Medical staff directly involved in handling the COVID-19 situation will see an increase in special allowance from MYR400 to MYR600 a month• Special allowance of MYR200 a month will be given to front liners, police, customs, immigration officer, and RELA members from 1 Apr 2020 until the pandemic ends

Bantuan Prihatin Nasional – one-off cash hand-outs totalling MYR10bn• MYR1,600 for households earning MYR4,000 or less per month• MYR1,000 for households earning above MYR4,000 to MYR8,000 per month• MYR800 for single individual, aged 21 years old and above with monthly income of MYR2,000 and below• MYR500 for single individual, aged 21 years old and above with monthly income above MYR2,000 and up to MYR4,000

Other cash hand-outs and measures• Allocation of MYR270m to be given to students of higher education institution (up to MYR200 per student)• Allocation of MYR25m for providing food and healthcare supplies to those with special needs• Deferment of PTPTN loan repayment up to six months, with estimated collection value of up to MYR750m• Deferment of Perbadanan Tabung Pembangunan Kemahiran (PTPK) loan repayment up to six months, with estimated collection value of up to MYR149.2m• Under mySalam, up to MYR50 per day will be given to B40, who are quarantined as a suspected patient (previously given to only those infected)• Private Retirement Scheme (PRS) holders can now take out a total of MYR1,500 from Apr to Dec 2020• MYR500 one-off cash hand-out to public servants and retired government servants

Rental waivers• Rental waiver of up to six months (previously one month) for those who stays in Projek Perumahan Rakyat dan Perumahan Awam. This will cost the Government MYR3m• Rental waiver of up to six months for those under the rent-to-own units of Projek Perumahan Rakyat dan Perumahan Awam. This will cost the Government MYR5.7m• Rental waiver of up to six months for those staying in Perumahan Awam• Rental waiver of up to six months for all Federal Government’s premise such as school canteen, pre-school, cafeteria, convenience shop, etc

Electricity bill discount• 50% discount for usage below 200kW• 25% discount for usage between 201 to 300kW• 15% discount for usage between 301 to 600kW• All discounts will be take effect for six months starting Apr 2020• The earlier 2% discount announced in the previous stimulus package will still be enjoyed by all households

Telecommunication and multimedia• Free internet to all users (worth MYR600m) from 1 Apr 2020 until MCO ends• Additional MYR400m will be invested to increase bandwidth and coverage

Ensuring sufficient food supply• MYR1bn allocation to ‘Dana Jaminan Makanan’ to ensure sufficient food supply• MYR100m allocated to set up food storage and distribution facilities• MYR64m allocated to competent Pertubuhan Peladang Kawasan dan Pertubuhan Nelayan Kawasan to encourage production of short-term agrofood

Program Subsidi Upah• Wage subsidy of MYR600 per month per employee for three months to employers that are experiencing 50% drop in earnings since 1 Jan 2020. This is applicable for employees with a salary below MYR4,000• For three months, employers must not sack or ask its employee to take unpaid leave• Employers must not cut its employee’s existing wages• All these involves an allocation of MYR5.9bn

Supporting the e-hailing drivers• MYR60m allocation to the e-hailing drivers. MYR500 will be given to each e-hailing drivers• MYR600 will be given to taxi drivers as announced in the previous stimulus package

Ensuring welfare of contract employees• Salaries borne by contractors involved in the service sector, such as cleaning services and food supply in government agencies, will be paid by the government throughout the MCO period• Total allocation of MYR110m is involved here

Assistance to corporates, SMEs and micro entrepreneurs• Additional allocation of MYR3bn to the Special Relief Facility for SMEs (totalling MYR5bn) with its interest rate lowered to 3.5% (from 3.75%)• An increase of the fund under All Economic Sector (AES) Facility to MYR6.8bn from MYR5.8bn to allow ease of access to financing for SMEs• Additional allocation of MYR500m to Micro Credit Scheme (total MYR700m). Application requirements is lowered to a minimum six months of operations (from one year) and the maximum financing amount is increased to MYR75,000 for every applicant• SMEs with operation record of less than four years can benefit from the BizMula-I and BizWanita-I scheme from Credit Guarantee Corporation (CGC) for financing up to MYR300,000• Syarikat Jaminan Pembiayaan Perniagaan will provide guarantee schemes worth MYR5bn and up to 80% coverage for SMEs facing difficulties in obtaining credit facilities• Introduction of Khidmat Rundingan Majikan programme that will allow employers to postpone, restructure, or reschedule their mandatory EPF contribution for employees, beginning 15 Apr• Human Resource Development Fund (HDRF) levy exempted for all sectors for six months starting Apr 2020• Deferment of income tax payment for SMEs for three months starting Apr 2020;• Interest income of banks will only be taxed after the moratorium period;• Moratorium on loans to be expanded to include loans from TEKUN, MARA and cooperatives as well as government agencies that grant loans to SMEs, starting Apr 2020• A social finance programme will be introduced for affected B40 entrepreneurs, which comprises entrepreneurship lessons and guidance on finance management• MYR50bn guarantee scheme facilities will be provided between 1 May and 31 Dec 2020 (or until the loan is used up) with guarantee of up to 80% for working capital purposes. The minimum borrowing here is MYR20m for each business• The facilities will be ready for application starting from 1 May to 31 Dec 2020

Continuing construction works• MYR2bn will be allocated to upgrade roads, schools in East Malaysia, police stations and vacation spots for the benefit of G1-G4 contractors• The MYR2bn announced in the previous stimulus package will begin in Apr 2020. This involves MYR600m infrastructure works at FELDA areas, MYR350m for upgrading works of schools in East Malaysia and MYR150m to refurbish houses for the poor.• The Government will proceed with all the projects under Budget 2020 which include East Coast Rail Link (ECRL), Mass Rapid Transit 2 (MRT2), and National Fiberisation and Connectivity Plan (NFCP)

Source : RHB, Various media reports

No stone left unturnedPrime Minister Tan Sri Muhyiddin Yassin announced a stimulus package to a staggering amount of MYR250bn (16.5% of 2019’s GDP) to combat the dampening impact of the MCO and the COVID-19 pandemic.

Comparatively, the stimulus is significantly larger than the ones introduced during SARS in 2003 at MYR7.3bn (1.7% of 2003 GDP) as well as during the Global Financial Crisis in 2008-2009 at MYR67bn (8.7% of 2008 GDP).

Out of the MYR250bn, the bulk of the support is aimed at providing a social safety net at MYR128bn (51.2% of the total), while MYR100bn (40% of the total) goes into addressing SMEs funding and cash flow issue. The rest of the allocation is for economic support and the MYR20bn from the first stimulus.

The Government said that the fiscal injection is MYR25bn or 1.7% of GDP. This could effectively increase the Government’s budget deficit from 3.2% of GDP (announced under Budget 2020) to 4.9% of GDP.

Notable measures from the announcement include:i. Cash handouts of MYR1,600 and MYR500 to B40 and M40 income groups amounting to MYR10bn;

ii. Loan guarantee of MYR50bn;

iii. 15-30% discount on monthly electrical bills depending on usage;

iv. Salary subsidy scheme where the Government pays MYR600 for three months for each worker retained amounting to MYR5.9bn;

v. MYR500 for e-hailing drivers;

vi. Support for SMEs funding facility;

vii. Deferment of the corporate income tax to all SMEs for three months starting April.

Extending support to the M40Support in terms of cash handouts appears significant. The Government indicated that a household could, in theory, receive up to MYR8,600 in the form of cash and benefits. However, we believe these are exceptional cases and the benefit is smaller, albeit, still substantial.

These measures are expected to benefit up to 5.1m households on top of the additional handouts to 4.6m single persons, students and vulnerable groups. Comparatively, the number of household in Malaysia is estimated at 8m, making the coverage of the support engulfed a large portion of the M40. (The M40 income bracket is those between the MYR4,360-9,619 monthly income, for Budget 2020).

While appearing significant for now, the effect of the cash support will only become more visible once the spread of COVID-19 is put under a manageable situation and the MCO is relaxed and economic activity slowly resumes its normalcy. In this aspect, we might still see the dampening impact of the MCO on consumer spending, and hence, economic growth.

Retaining workersThe announcement of the salary subsidy of MYR600 per month for each retained worker is an extension of the Employment Retention Programme announced on 16 Mar 2020. Essentially, the current measure gives financial assistance to businesses to encourage them to retain workers, as the MCO is supposed to be a short-term measure to ensure that the virus spread could be contained at a manageable level.

Also, previous measures such as the Employment Retention Programme as well as existing job search allowance facility should provide some support to retrenched and unpaid workers. The Government sees that keeping employment is a major factor to ensure the demand shock is contained, hence, it is necessary that workers are retained as much as possible.

Addressing the cash flow issuesThe most pressing concerns for SMEs at the moment is the negative cash flow issue due to loss of revenue arising from the MCO. In this aspect, the Government has come up with few support measures such as deferring payment of corporate income tax, exempting payment for the HRDF levy and deferring the payment of employer’s EPF contribution.

The central bank also stepped in to provide additional soft loans of MYR4.5bn for businesses, while banks have suspended loans and interest repayments for six months. The banks’ move is unprecedented that could release about MYR100bn of funds for consumers and businesses.

These measures, in our view, should help to alleviate some of the SMEs cash flow problem although businesses will still have to face the problems again in the next few months once the deferred payments are due.

Figure 5: PRIHATIN stimulus package

Figure 9: Earnings outlook and valuations

Figure 10: FBM KLCI – weightings & valuations

Growth revised downKey focus of the stimulus measures is to address each segment of society that is affected by the MCO. The goal is not necessarily to offset the losses incurred, which is likely to be unavoidable, but to minimise the impact whenever possible.

As such, we see economic activity to moderate significantly in 2Q20 before gradually recovering in 2H20. Of course, this view relies heavily on the assumption that the pandemic can be contained at a manageable level in the next few weeks. In total, growth is expected at 0.0% in 2020 before rebounding strongly at 5.7% in 2021.

Meanwhile, we think the higher projected fiscal deficit at 4.9% of GDP from 3.2% (announced in Budget 2020) should not spark a rating downgrade. The unprecedented condition that the global economy is facing requires significant fiscal support, which is also conducted by many other countries. Hence, rating agencies would likely see this as a global issue and provide some leeway for most of the countries.

On the monetary policy, we are of the view that BNM would maintain an easing bias considering weaker growth prospects ahead. We expect a 50bps cut in the interest rate, bringing the policy rate to 2.0%, a similar rate seen during the global financial crisis of 2008-2009.

Sector: AviationImpact: NeutralComment: i. No details provided for Malaysia Airports (MAHB MK, NEUTRAL, TP: MYR6.15) on the quantum or the authority responsible to provide rebates on rental for premises at the airport as well as landing and parking charges. Having said that, this should have been priced in given that it was announced in the previous stimulus several weeks ago.ii. AirAsia X (AAX MK, NEUTRAL, TP: MYR0.105) should benefit slightly from the rebates but the main earnings driver is still passenger volume. In the near term, we expect a challenging operating environment for AirAsia X until COVID-19 subsides.

Sector: BanksImpact: Positive Comment: i. Assistance provided to individuals, namely the B40 segment, in the form of direct monetary handouts, relief on utility expenses, study loans, and others, will complement BNM’s automatic moratorium on loan repayments by individuals and SME borrowers. This should help those facing cash flow strain and improve their ability to service their bank borrowings once the 6-month moratorium is overii. For SMEs, BNM increased the allocation of the Special Relief Facility to MYR5.0bn (from MYR2.0bn) with interest rate lowered to 3.5% pa (from 3.75%), and the All Economic Sectors (AES) facility to MYR6.8bn (from MYR5.8bn) with maximum financing rate reduced to 7% pa (from 8%). We believe the higher allocations will help more SMEs weather the economic fallout from the pandemic, thereby preserve jobs.iii. Overall, we believe the assistance provided to individuals and SMEs will provide some reprieve for those facing cash flow issues as well as reduce job losses. For the banking sector, this would mitigate the risk of a sharp deterioration in asset quality as borrowers will likely be in a better position to service their borrowings six months down the road. The accrual of interest income, even if not compounded, means that banks will not be disadvantaged by the loan moratorium.

Sector: Basic MaterialsImpact: Neutral Comment: Minimal impact aside from special tax deduction on renovation/refurbishment costs which could spur demand for bag cement.

Sector: ConstructionImpact: Neutral Comment: The overall impact is Neutral, as we see no positive surprises from the announcement. While the cumulative MYR4bn (MYR2bn of Stimulus 1 and MYR2bn of Stimulus 3) allocation is expected to bring jobs and stimulate activities, our rough estimate on the impact is only around 3%. Notably, G1 to G4 contractors (classified as SMEs, paid-up capital <MYR150,000) are expected to benefit the most, given the focus is on small size projects. These include upgrading works for roads and tourism facilities, repair works for dilapidated schools in Sabah and Sarawak, as well as development of basic infrastructure in rural areas. In our view, works are likely to commence in the middle of April, provided that the MCO is not extended. The continuation announcement of mega projects namely ECRL and MRT2, does not come as surprise. Works are already ongoing, with progress expected to pick up steam in 2H20.

Sector: ConsumerImpact: Positive Comment: i. Cash payment to targeted B40 and M40 households is timely particularly for the affected families to cope with the basic living needs.ii. Rental exemption and electricity bill discount are straightforward measures to aid in managing the cost of living whereas the wage subsidy and various assistance to SME showcase the Government’s inclination to prevent a sharp rise in the unemployment rate, which would be a huge dampener to consumer sentiment.iii. All in, we see the Government’s firm intention to mitigate the negative impact from COVID-19 to the economy and consumer spending by introducing the slew of stimulus measures.iv. Under current situation, we believe any aid or relief given by the Government will be mainly utilised to make rental and utilities payments before the allocation for basic food and other daily necessities. Hence, this should sustain consumer spending notwithstanding the negative impact to economy caused by the COVID-19 pandemic.v. The prime beneficiary would be staple consumer goods players including Nestle (M) (NESZ MK, NEUTRAL, TP: MYR132), Power Root (PWRT MK, BUY, TP: MYR2.80, QL Resources (QL MK, NEUTRAL, TP: MYR8.16, Leong Hup International (LHIB MK, BUY, TP: MYR1.16), and NTPM (NTPM MK, BUY, TP: MYR0.48).

Sector: LogisticsImpact: Neutral Comment: We expect Westports (WPRTS MK, NEUTRAL, TP: MYR4.20) to benefit slightly from import duty and sales tax exemption on importation or local purchase of machinery and equipment used. The tax savings should be realised from 2Q20 since the exemption will commence from 1 Apr 2020 and be effective for three years. While this initiative by the Government should lend some support to earnings, the biggest factor is still TEU volume. In its recent results announcement, Westports said that it initially expected minor single-digit container throughput growth for FY20. However, there is less visibility on the overall volume outlook due to COVID-19.

Sector: HealthcareImpact: Neutral Comment: i. mySalam coverage is extended to include B40 patients who are admitted to hospital due to COVID-19. It also covers a patient admitted as patient under investigation. Patient is allowed to claim MYR50 per day for a maximum of 14 days.ii. We are neutral on the measure as it does not affect private hospitals.

Sector: Non-Bank FinancialsImpact: Neutral Comment: i. The testing cost borne by each insurance company/takaful operator should be rather minimal as it is capped at MYR300 per policyholder with a maximum total outlay of MYR8m for the whole industry.ii. Insurance companies and takaful operators are working with the regulator on the 3-month premium holiday. We opine that they will not let the policies lapse even if no premium is received during this 3-month period but premium income will still be charged on the policyholders’ fund value.iii. The higher allowances for civil servants bode well for RCE Capital.iv. Cash handouts to households and individuals will help lower the burden and partially mitigate the impact on AEON Credit’s asset quality.

Sector: REITsImpact: Neutral Comment: i. Similar to the first stimulus package, announced on 27 Feb, further emphasised initiatives to provide between 15% and 50% discounts on electricity – mildly positive to reduce operating costs in shopping malls and hotels. This shall benefit Pavilion REIT (PREIT, BUY, TP: MYR1.98) the most, as its role in providing power supply to Pavilion Hotel has dragged earnings the past couple of quarters.ii. Since the start of the MCO and the Government’s decision to extend it, incentives announced in the earlier package to encourage domestic travel are rendered void – a definite negative for REITs with a large hospitality exposure. Tax exemptions for hotels may prove positive, but any incentives to mitigate the impact of cancellations and a lack of bookings during the MCO period remain to be seen.iii. All things considered, we are largely neutral on the measures highlighted thus far across all three packages as no true incentives to cushion the adverse impact on asset owners have been brought up. We await measures that would be able to address the pressure now exerted on hotels’ occupancy rates and shopping malls’ rental rates.

Sector: TelecomsImpact: Neutral Comment: The MYR600m contribution in the form of free daily 1GB data for prepaid and postpaid users will benefit over 30m subscribers during the MCO. With the mobile revenues of the Big-4 mobile operators combined being in excess of MYR20bn pa, the revenue foregone works out to be <5%. The implied data yield (based on the MCO period and about 600m GB generated) translates into approximately MYR1 per GB, below the current average data yield realised of over MYR3 per GB. We see little incremental opex from the move although the mobile operators would have to frontload their capex (part of the MYR400m capex investments committed) to ensure that their networks are able to meet the increased traffic/capacity demands during the period.

Sector: UtilitiesImpact: Neutral Comment: The Government, together with Tenaga, has allocated MYR530m for staggered discounts between 15% and 50% for electricity usage up to a maximum of 600kW per month between Apr and Sep 2020. We understand that Tenaga will bear MYR150m and the remaining will be contributed by the Government and KWIE. Earnings impact to Tenaga is fairly minimal at 2% of our FY20F earnings. Thus, we maintain our forecast and NEUTRAL call on the stock with unchanged TP of MYR12.88.

Figure 6: Economy could face tougher times ahead

Source: CIEC, RHB

Figure 7: Budget deficit could weaken to 4.9% of GDP

Figure 8: Impact of the COVID-19 stimulus package

Source: CIEC, RHB

Note: Excludes FBM KLCI stocks not under RHB Research’s coverage, ie HLFG, RHB Bank, PPB and Hap Seng Consolidated

Source: Bloomberg, RHB

Source: Bloomberg, RHB

Figure 11: Top BUYs

Figure 12: RHB basket – sector weightings & valuations

Figure 13: FBM KLCI’s forward P/E band

RHB Guide to Investment Ratings

Note: ^FY20-21 valuations refer to those of FY21-22Source: RHB

Source: RHB

Source: Bloomberg

Buy: Share price may exceed 10% over the next 12 monthsTrading Buy: Share price may exceed 15% over the next 3 months, however longer-term outlook remains uncertainNeutral: Share price may fall within the range of +/- 10% over the next 12 monthsTake Profit: Target price has been attained. Look to accumulate at lower levelsSell: Share price may fall by more than 10% over the next 12 monthsNot Rated: Stock is not within regular research coverage

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This report does not purport to be comprehensive or to contain all the information that a prospective investor may need in order to make an investment decision. The recipient of this report is making its own independent assessment and decisions regarding any securities or financial instruments referenced herein. Any investment discussed or recommended in this report may be unsuitable for an investor depending on the investor’s specific investment objectives and financial position. The material in this report is general information intended for recipients who understand the risks of investing in financial instruments. This report does not take into account whether an investment or course of action and any associated risks are suitable for the recipient. Any recommendations contained in this report must therefore not be relied upon as investment advice based on the recipient's personal circumstances. Investors should make their own independent evaluation of the information contained herein, consider their own investment objective, financial situation and particular needs and seek their own financial, business, legal, tax and other advice regarding the appropriateness of investing in any securities or the investment strategies discussed or recommended in this report.

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The research analysts responsible for the production of this report hereby certifies that the views expressed herein accurately and exclusively reflect his or her personal views and opinions about any and all of the issuers or securities analysed in this report and were prepared independently and autonomously. The research analysts that authored this report are precluded by RHB in all circumstances from trading in the securities or other financial instruments referenced in the report, or from having an interest in the company(ies) that they cover.

The contents of this report is strictly confidential and may not be copied, reproduced, published, distributed, transmitted or passed, in whole or in part, to any other person without the prior express written consent of RHB and/or its affiliates. This report has been delivered to RHB and its affiliates’ clients for information purposes only and upon the express understanding that such parties will use it only for the purposes set forth above. By electing to view or accepting a copy of this report, the recipients have agreed that they will not print, copy, videotape, record, hyperlink, download, or otherwise attempt to reproduce or re-transmit (in any form including hard copy or electronic distribution format) the contents of this report. RHB and/or its affiliates accepts no liability whatsoever for the actions of third parties in this respect.

The contents of this report are subject to copyright. Please refer to Restrictions on Distribution below for information regarding the distributors of this report. Recipients must not reproduce or disseminate any content or findings of this report without the express permission of RHB and the distributors.

The securities mentioned in this publication may not be eligible for sale in some states or countries or certain categories of investors. The recipient of this report should have regard to the laws of the recipient’s place of domicile when contemplating transactions in the securities or other financial instruments referred to herein. The securities discussed in this report may not have been registered in such jurisdiction. Without prejudice to the foregoing, the recipient is to note that additional disclaimers, warnings or qualifications may apply based on geographical location of the person or entity receiving this report.

The term “RHB” shall denote, where appropriate, the relevant entity distributing or disseminating the report in the particular jurisdiction referenced below, or, in every other case, RHB Investment Bank Berhad and its affiliates, subsidiaries and related companies.

RHB Guide to Investment Ratings

MalaysiaThis report is issued and distributed in Malaysia by RHB Investment Bank Berhad (“RHBIB”). The views and opinions in this report are our own as of the date hereof and is subject to change. If the Financial Services and Markets Act of the United Kingdom or the rules of the Financial Conduct Authority apply to a recipient, our obligations owed to such recipient therein are unaffected. RHBIB has no obligation to update its opinion or the information in this report.

ThailandThis report is issued and distributed in the Kingdom of Thailand by RHB Securities (Thailand) PCL, a licensed securities company that is authorised by the Ministry of Finance, regulated by the Securities and Exchange Commission of Thailand and is a member of the Stock Exchange of Thailand. The Thai Institute of Directors Association has disclosed the Corporate Governance Report of Thai Listed Companies made pursuant to the policy of the Securities and Exchange Commission of Thailand. RHB Securities (Thailand) PCL does not endorse, confirm nor certify the result of the Corporate Governance Report of Thai Listed Companies.

IndonesiaThis report is issued and distributed in Indonesia by PT RHB Sekuritas Indonesia. This research does not constitute an offering document and it should not be construed as an offer of securities in Indonesia. Any securities offered or sold, directly or indirectly, in Indonesia or to any Indonesian citizen or corporation (wherever located) or to any Indonesian resident in a manner which constitutes a public offering under Indonesian laws and regulations must comply with the prevailing Indonesian laws and regulations.

DISCLOSURE OF CONFLICTS OF INTEREST

SingaporeThis report is issued and distributed in Singapore by RHB Securities Singapore Pte Ltd which is a holder of a capital markets services licence and an exempt financial adviser regulated by the Monetary Authority of Singapore. RHB Securities Singapore Pte Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, RHB Securities Singapore Pte Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact RHB Securities Singapore Pte Ltd in respect of any matter arising from or in connection with the report.

Hong KongThis report is distributed in Hong Kong by RHB Securities Hong Kong Limited (興業僑豐證券有限公司) (CE No.: ADU220) (“RHBSHK”) which is licensed in Hong Kong by the Securities and Futures Commission for Type 1 (dealing in securities). Any investors wishing to purchase or otherwise deal in the securities covered in this report should contact RHBSHK. RHBSHK is a wholly owned subsidiary of RHB Hong Kong Limited; for the purposes of disclosure under the Hong Kong jurisdiction herein, please note that RHB Hong Kong Limited with its affiliates (including but not limited to RHBSHK) will collectively be referred to as “RHBHK.” RHBHK conducts a full-service, integrated investment banking, asset management, and brokerage business. RHBHK does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this research report. Investors should consider this report as only a single factor in making their investment decision. Importantly, please see the company-specific regulatory disclosures below for compliance with specific rules and regulations under the Hong Kong jurisdiction. Other than company-specific disclosures relating to RHBHK, this research report is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such.

United StatesThis report was prepared by RHB and is being distributed solely and directly to “major” U.S. institutional investors as defined under, and pursuant to, the requirements of Rule 15a-6 under the U.S. Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, access to this report via Bursa Marketplace or any other Electronic Services Provider is not intended for any party other than “major” US institutional investors, nor shall be deemed as solicitation by RHB in any manner. RHB is not registered as a broker-dealer in the United States and does not offer brokerage services to U.S. persons. Any order for the purchase or sale of the securities discussed herein that are listed on Bursa Malaysia Securities Berhad must be placed with and through Auerbach Grayson (“AG”). Any order for the purchase or sale of all other securities discussed herein must be placed with and through such other registered U.S. broker-dealer as appointed by RHB from time to time as required by the Exchange Act Rule 15a-6. This report is confidential and not intended for distribution to, or use by, persons other than the recipient and its employees, agents and advisors, as applicable. Additionally, where research is distributed via Electronic Service Provider, the analysts whose names appear in this report are not registered or qualified as research analysts in the United States and are not associated persons of Auerbach Grayson AG or such other registered U.S. broker-dealer as appointed by RHB from time to time and therefore may not be subject to any applicable restrictions under Financial Industry Regulatory Authority (“FINRA”) rules on communications with a subject company, public appearances and personal trading. Investing in any non-U.S. securities or related financial instruments discussed in this research report may present certain risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on non-U.S. securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in the United States. The financial instruments discussed in this report may not be suitable for all investors. Transactions in foreign markets may be subject to regulations that differ from or offer less protection than those in the United States.

RHB Investment Bank Berhad, its subsidiaries (including its regional offices) and associated companies, (“RHBIB Group”) form a diversified financial group, undertaking various investment banking activities which include, amongst others, underwriting, securities trading, market making and corporate finance advisory.

As a result of the same, in the ordinary course of its business, any member of the RHBIB Group, may, from time to time, have business relationships with or hold positions in the securities (including capital market products) or perform and/or solicit investment, advisory or other services from any of the subject company(ies) covered in this research report.

While the RHBIB Group will ensure that there are sufficient information barriers and internal controls in place where necessary, to prevent/manage any conflicts of interest to ensure the independence of this report, investors should also be aware that such conflict of interest may exist in view of the investment banking activities undertaken by the RHBIB Group as mentioned above and should exercise their own judgement before making any investment decisions.

MalaysiaSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, RHBIB hereby declares that:

1. RHBIB does not have a financial interest in the securities or other capital market products of the subject company(ies) covered in this report.2. RHBIB is not a market maker in the securities or capital market products of the subject company(ies) covered in this report.3. None of RHBIB’s staff or associated person serve as a director or board member* of the subject company(ies) covered in this report*For the avoidance of doubt, the confirmation is only limited to the staff of research department4. RHBIB did not receive compensation for investment banking or corporate finance services from the subject company in the past 12 months.5. RHBIB did not receive compensation or benefit (including gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in relation to the production of this report.

ThailandSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, RHB Securities (Thailand) PCL hereby declares that:

1. RHB Securities (Thailand) PCL does not have a financial interest in the securities or other capital market products of the subject company(ies) covered in this report.2. RHB Securities (Thailand) PCL is not a market maker in the securities or capital market products of the subject company(ies) covered in this report.3. None of RHB Securities (Thailand) PCL’s staff or associated person serve as a director or board member* of the subject company(ies) covered in this report1. *For the avoidance of doubt, the confirmation is only limited to the staff of research department4. RHB Securities (Thailand) PCL did not receive compensation for investment banking or corporate finance services from the subject company in the past 12 months.5. RHB Securities (Thailand) PCL did not receive compensation or benefit (including gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in relation to the production of this report.

IndonesiaSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, PT RHB Sekuritas Indonesia hereby declares that:

1. PT RHB Sekuritas Indonesia and its investment analysts, does not have any interest in the securities of the subject company(ies) covered in this report.For the avoidance of doubt, interest in securities include the following:a) Holding directly or indirectly, individually or jointly own/hold securities or entitled for dividends, interest or proceeds from the sale or exercise of the subject company’s securities covered in this report*;b) Being bound by an agreement to purchase securities or has the right to transfer the securities or has the right to pre subscribe the securities*.c) Being bound or required to buy the remaining securities that are not subscribed/placed out pursuant to an Initial Public Offering*.d) Managing or jointly with other parties managing such parties as referred to in (a), (b) or (c) above.2. PT RHB Sekuritas Indonesia is not a market maker in the securities or capital market products of the subject company(ies) covered in this report.3. None of PT RHB Sekuritas Indonesia’s staff** or associated person serve as a director or board member* of the subject company(ies) covered in this report.4. PT RHB Sekuritas Indonesia did not receive compensation for investment banking or corporate finance services from the subject company in the past 12 months.5. PT RHB Sekuritas Indonesia** did not receive compensation or benefit (including gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in relation to the production of this report:

Notes:*The overall disclosure is limited to information pertaining to PT RHB Sekuritas Indonesia only.**The disclosure is limited to Research staff of PT RHB Sekuritas Indonesia only.

SingaporeSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, RHB Securities Singapore Pte Ltd hereby declares that:

1. RHB Securities Singapore Pte Ltd, its subsidiaries and/or associated companies do not make a market in any issuer covered in this report.2. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated companies and its analysts do not have a financial interest (including a shareholding of 1% or more) in the issuer covered in this report.3. RHB Securities, its staff or connected persons do not serve on the board or trustee positions of the issuer covered in this report.4. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated companies do not have and have not within the last 12 months had any corporate finance advisory relationship with the issuer covered in this report or any other relationship that may create a potential conflict of interest.5. RHB Securities Singapore Pte Ltd, or person associated or connected to it do not have any interest in the acquisition or disposal of, the securities, specified securities based derivatives contracts or units in a collective investment scheme covered in this report.6. RHB Securities Singapore Pte Ltd and its analysts do not receive any compensation or benefit in connection with the production of this research report or recommendation.

This report is issued and distributed in Indonesia by PT RHB Sekuritas Indonesia. This research does not constitute an offering document and it should not be construed as an offer of securities in Indonesia. Any securities offered or sold, directly or indirectly, in Indonesia or to any Indonesian citizen or corporation (wherever located) or to any Indonesian resident in a manner which constitutes a public offering under Indonesian laws and regulations must comply with the prevailing Indonesian laws and regulations.

SingaporeThis report is issued and distributed in Singapore by RHB Securities Singapore Pte Ltd which is a holder of a capital markets services licence and an exempt financial adviser regulated by the Monetary Authority of Singapore. RHB Securities Singapore Pte Ltd may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, RHB Securities Singapore Pte Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact RHB Securities Singapore Pte Ltd in respect of any matter arising from or in connection with the report.

Hong KongThis report is distributed in Hong Kong by RHB Securities Hong Kong Limited (興業僑豐證券有限公司) (CE No.: ADU220) (“RHBSHK”) which is licensed in Hong Kong by the Securities and Futures Commission for Type 1 (dealing in securities). Any investors wishing to purchase or otherwise deal in the securities covered in this report should contact RHBSHK. RHBSHK is a wholly owned subsidiary of RHB Hong Kong Limited; for the purposes of disclosure under the Hong Kong jurisdiction herein, please note that RHB Hong Kong Limited with its affiliates (including but not limited to RHBSHK) will collectively be referred to as “RHBHK.” RHBHK conducts a full-service, integrated investment banking, asset management, and brokerage business. RHBHK does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this research report. Investors should consider this report as only a single factor in making their investment decision. Importantly, please see the company-specific regulatory disclosures below for compliance with specific rules and regulations under the Hong Kong jurisdiction. Other than company-specific disclosures relating to RHBHK, this research report is based on current public information that we consider reliable, but we do not represent it is accurate or complete, and it should not be relied on as such.

United StatesThis report was prepared by RHB and is being distributed solely and directly to “major” U.S. institutional investors as defined under, and pursuant to, the requirements of Rule 15a-6 under the U.S. Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, access to this report via Bursa Marketplace or any other Electronic Services Provider is not intended for any party other than “major” US institutional investors, nor shall be deemed as solicitation by RHB in any manner. RHB is not registered as a broker-dealer in the United States and does not offer brokerage services to U.S. persons. Any order for the purchase or sale of the securities discussed herein that are listed on Bursa Malaysia Securities Berhad must be placed with and through Auerbach Grayson (“AG”). Any order for the purchase or sale of all other securities discussed herein must be placed with and through such other registered U.S. broker-dealer as appointed by RHB from time to time as required by the Exchange Act Rule 15a-6. This report is confidential and not intended for distribution to, or use by, persons other than the recipient and its employees, agents and advisors, as applicable. Additionally, where research is distributed via Electronic Service Provider, the analysts whose names appear in this report are not registered or qualified as research analysts in the United States and are not associated persons of Auerbach Grayson AG or such other registered U.S. broker-dealer as appointed by RHB from time to time and therefore may not be subject to any applicable restrictions under Financial Industry Regulatory Authority (“FINRA”) rules on communications with a subject company, public appearances and personal trading. Investing in any non-U.S. securities or related financial instruments discussed in this research report may present certain risks. The securities of non-U.S. issuers may not be registered with, or be subject to the regulations of, the U.S. Securities and Exchange Commission. Information on non-U.S. securities or related financial instruments may be limited. Foreign companies may not be subject to audit and reporting standards and regulatory requirements comparable to those in the United States. The financial instruments discussed in this report may not be suitable for all investors. Transactions in foreign markets may be subject to regulations that differ from or offer less protection than those in the United States.

Analyst

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Company

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This publication has been prepared by RHB Bank Berhad and is solely for your information only. It may not be copied, published, circulated, reproduced or distributed in whole or part to any person without the prior written consent of RHB Bank Berhad. In preparing this article, RHB Bank Berhad has relied upon and assumed the accuracy and completeness of all information available from public references and articles or which was otherwise reviewed by RHB Bank Berhad. Accordingly, whilst we have taken all reasonable care to ensure that the information contained in this article is not untrue or misleading at the time of publication, we cannot guarantee its accuracy or completeness or fairness of such opinions and make no representation or warranty (whether expressed or implied) and accept no responsibility or liability for its accuracy or completeness. You should not act on the information contained in this article without first independently verifying its contents.Any opinion, historical account, personal profile, estimate or data contained in this article is based on information available as of the date of this article and are subject to change without notice. It does not constitute any advice, offer or solicitation by RHB Bank Berhad. This document and its contents are not intended to constitute an offer for sale and/or invitation to subscribe for or purchase or otherwise acquire any of the instruments referred to herein.

RHB Bank Berhad 196501000373 (6171-M)

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DISCLOSURE OF CONFLICTS OF INTERESTRHB Investment Bank Berhad, its subsidiaries (including its regional offices) and associated companies, (“RHBIB Group”) form a diversified financial group, undertaking various investment banking activities which include, amongst others, underwriting, securities trading, market making and corporate finance advisory.

As a result of the same, in the ordinary course of its business, any member of the RHBIB Group, may, from time to time, have business relationships with or hold positions in the securities (including capital market products) or perform and/or solicit investment, advisory or other services from any of the subject company(ies) covered in this research report.

While the RHBIB Group will ensure that there are sufficient information barriers and internal controls in place where necessary, to prevent/manage any conflicts of interest to ensure the independence of this report, investors should also be aware that such conflict of interest may exist in view of the investment banking activities undertaken by the RHBIB Group as mentioned above and should exercise their own judgement before making any investment decisions.

MalaysiaSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, RHBIB hereby declares that:

1. RHBIB does not have a financial interest in the securities or other capital market products of the subject company(ies) covered in this report.2. RHBIB is not a market maker in the securities or capital market products of the subject company(ies) covered in this report.3. None of RHBIB’s staff or associated person serve as a director or board member* of the subject company(ies) covered in this report*For the avoidance of doubt, the confirmation is only limited to the staff of research department4. RHBIB did not receive compensation for investment banking or corporate finance services from the subject company in the past 12 months.5. RHBIB did not receive compensation or benefit (including gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in relation to the production of this report.

ThailandSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, RHB Securities (Thailand) PCL hereby declares that:

1. RHB Securities (Thailand) PCL does not have a financial interest in the securities or other capital market products of the subject company(ies) covered in this report.2. RHB Securities (Thailand) PCL is not a market maker in the securities or capital market products of the subject company(ies) covered in this report.3. None of RHB Securities (Thailand) PCL’s staff or associated person serve as a director or board member* of the subject company(ies) covered in this report1. *For the avoidance of doubt, the confirmation is only limited to the staff of research department4. RHB Securities (Thailand) PCL did not receive compensation for investment banking or corporate finance services from the subject company in the past 12 months.5. RHB Securities (Thailand) PCL did not receive compensation or benefit (including gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in relation to the production of this report.

IndonesiaSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, PT RHB Sekuritas Indonesia hereby declares that:

1. PT RHB Sekuritas Indonesia and its investment analysts, does not have any interest in the securities of the subject company(ies) covered in this report.

For the avoidance of doubt, interest in securities include the following:a) Holding directly or indirectly, individually or jointly own/hold securities or entitled for dividends, interest or proceeds from the sale or exercise of the subject company’s securities covered in this report*;b) Being bound by an agreement to purchase securities or has the right to transfer the securities or has the right to pre subscribe the securities*.c) Being bound or required to buy the remaining securities that are not subscribed/placed out pursuant to an Initial Public Offering*.d) Managing or jointly with other parties managing such parties as referred to in (a), (b) or (c) above.

2. PT RHB Sekuritas Indonesia is not a market maker in the securities or capital market products of the subject company(ies) covered in this report.3. None of PT RHB Sekuritas Indonesia’s staff** or associated person serve as a director or board member* of the subject company(ies) covered in this report.4. PT RHB Sekuritas Indonesia did not receive compensation for investment banking or corporate finance services from the subject company in the past 12 months.5. PT RHB Sekuritas Indonesia** did not receive compensation or benefit (including gift and special cost arrangement e.g. company/issuer-sponsored and paid trip) in relation to the production of this report:Notes:*The overall disclosure is limited to information pertaining to PT RHB Sekuritas Indonesia only.**The disclosure is limited to Research staff of PT RHB Sekuritas Indonesia only.

SingaporeSave as disclosed in the following link (RHB Research conflict disclosures – Mar 2020) and to the best of our knowledge, RHB Securities Singapore Pte Ltd hereby declares that:1. RHB Securities Singapore Pte Ltd, its subsidiaries and/or associated companies do not make a market in any issuer covered in this report.2. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated companies and its analysts do not have a financial interest (including a shareholding of 1% or more) in the issuer covered in this report.3. RHB Securities, its staff or connected persons do not serve on the board or trustee positions of the issuer covered in this report.4. RHB Securities Singapore Pte Ltd, its subsidiaries and/or its associated companies do not have and have not within the last 12 months had any corporate finance advisory relationship with the issuer covered in this report or any other relationship that may create a potential conflict of interest.5. RHB Securities Singapore Pte Ltd, or person associated or connected to it do not have any interest in the acquisition or disposal of, the securities, specified securities based derivatives contracts or units in a collective investment scheme covered in this report.6. RHB Securities Singapore Pte Ltd and its analysts do not receive any compensation or benefit in connection with the production of this research report or recommendation.

Analyst CertificationThe analyst(s) who prepared this report, and their associates hereby, certify that:(1) they do not have any financial interest in the securities or other capital market products of the subject companies mentioned in this report, except for:

(2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.