Retailers fall, REITs mostly unchanged on HIDE impact

Retailers fall, REITs mostly unchanged on HIDE impact
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KUALA LUMPUR (May 10): Shares in retailers fell this morning after the Ministry of Science, Technology and Innovation (MOSTI) ordered premises flagged as Covid-19 hotspots by the Hotspot Identification for Dynamic Engagement (HIDE) system to close for three days. Some of the locations that these retailers have operations in, such as malls, have been flagged by HIDE.

However, real estate investment trusts (REITs) that have their mall assets closed down by the HIDE system were mostly unchanged as analysts did not expect their earnings to be significantly dragged by this. 

At 9.58am, AEON Co (M) Bhd had slipped one sen or 0.84% to RM1.18, Parkson Holdings Bhd slid half a sen or 2.13% to 23 sen and MyNews Holdings Bhd had fallen one sen or 1.1% to 89.5 sen.

Padini Holdings Bhd was unchanged at RM2.90 after falling to a low of RM2.86 this morning.

Pavillion REIT, Sunway REIT, IGB REIT, CapitaLand Malaysia Mall Trust and KLCC Stapled Group were unchanged at the time of writing.

Sentral REIT had grown half a sen or 0.56% to 89.5 sen, while KIP REIT was half a sen or 0.59% lower at 84 sen.

BIMB Securities Research analyst Azharuddin Nordin said in a note today the new list of hotspot places or HIDE introduced by MOSTI over the weekend could have an additional impact on the market and consumer spending.

“The HIDE system could jeopardise an already soft retail sector recovery as companies such as Padini would struggle as malls are at risk of temporary shutdowns, while consumers could become apprehensive in visiting malls/places that are on the HIDE list, hence affecting traffic or footfall.

“Padini sales are mainly derived from department stores in Kuala Lumpur and Selangor. Although lockdowns are generally accepted as the new norm, we think the inconsistencies in pronouncements such as the movement control order (MCO) and HIDE have become endemic,” he said.

Meanwhile, PublicInvest Research analyst Tan Siang Hing estimated that earnings for IGB REIT and Sunway REIT could be lower by less than 1% only due to the mandatory store closure.

“Our earnings estimates remain unchanged pending more clarity of the impact of HIDE. We maintain our 'neutral' stance [on REITs] for now,” he said.

According to PublicInvest Research, the premises flagged as Covid-19 hotspots by HIDE, among others, include megamalls such as Mid Valley Megamall, Suria KLCC, Sunway Pyramid and 1 Utama Shopping Centre.

Read also:
Tony Pua: HIDE poorly designed and assumptions behind data misguided
MMA suggests MoH to conduct mass Covid-19 test in HIDE's hotspot areas
Conflicting HIDE statements by Khairy, Ismail Sabri wreak havoc among retail outlets

Joyce Goh