MCO 3.0 likely to be less painful than previous MCOs - CGS-CIMB

However, the stockbroking firm is concerned that corporate earnings risks could rise if the current measures fail to flatten the COVID-19 infection curve within the next month, as the pace of the national immunisation programme for COVID-19 is likely to only pick up in June when more vaccines arrive for Phase 3.

"Concerns over increasing COVID-19 cases could dampen near-term sentiment and prompt investors to profit-take on recovery play stocks (banks, auto, real estate investment trusts, property, construction and tourism-related names) as well as names that have done well.

"Some investors could switch to defensive plays such as utilities, telco and glove makers," it said in a note today.

On May 8, the government announced that the Kuantan district in Pahang as well as several districts and sub-districts in Penang and Perak will be placed under the MCO from May 10-23.

They will be joining Kelantan, Kuala Lumpur, some districts and sub-districts in Johor, Terengganu, Selangor and Kedah, which were earlier placed under a targeted MCO.

The government also announced a ban on all inter-district and inter-state travels, as well as social functions by the public and private sectors starting from today until June 6.

It had also ordered the three-day closure of potentially high-risk premises identified by the Hotspots Identification for Dynamic Engagement (HIDE), which includes major malls in Kuala Lumpur and Selangor, effective till May 11.