KUALA LUMPUR: Malaysia and Singapore are positioned to gain from global growth in 2022, according to Moody's Analytics.
The two countries, together with their Asian peers, would benefit from China and its linkages through supply chains in Asia Pacific and the rest of the world, the firm added.
Local analysts, meanwhile, said the removal of Movement Control Order (MCO) in all but four states and rollout of Covid-19 vaccination nationwide would likely be viewed positively by stock market investors.
They said the investors would likely re-rate and shift to stocks that would benefit from the economic recovery should the execution of the vaccination programme progress smoothly.
Moody's Analytics said Malaysia and Singapore had been cautious in opening their borders to travellers despite being among the most aggressive with fiscal policy support for their economies over the past year.
It noted that the focus on getting the production side of the economy back on track had effectively allowed manufacturing to spark Chinaʼs recovery beginning in the second quarter of 2020, and lifted surrounding Asian economies in the quarter, as they eased up on many movement restrictions.
"Countries including Vietnam, Malaysia, Taiwan and Indonesia have benefitted from the carry condition of Chinaʼs growing trade demand," said Moody's Analytics in a commentary on Wednesday.
The firm said the regional trade with China last year had grown in percentage terms in double digits in Vietnam, Malaysia, Taiwan, Indonesia, Hong Kong, Japan, Thailand and Singapore.
Moody's Analytics, however, said this trade alone was not enough to guarantee full economic recovery.
"Containment of Covid-19 also is a necessary condition, which neither Indonesia nor Malaysia have yet managed to achieve," it said.
Aside from trade linkages, vaccination rates would further differentiate patterns of economic growth in 2020 but remained difficult to monitor in Asia, because there were little data available from consolidated sources, the firm added.
Meanwhile, CGS-CIMB analysts Ivg Ng and Nagulan Ravi said the MCO removal in all but four states would likely reduce corporate earnings risk concerns.
They said there could be potential hiccups along the way as the government started the vaccination in February.
"Among the concerns is that the number of vaccine doses may not be sufficient to meet the tight deadline. The government has so far only provided a detailed timeline on the deliveries of Pfizer-Biotech vaccines but not for the other four vaccine types," Ng and Ravi wrote in a report today.
For Malaysia's Pfizer vaccine order, the first batch of one million doses (for 500,000 people, at two doses each) reportedly is slated to arrive by end-February, with another 1.7 million doses in the second quarter (Q2), 5.8 million doses in Q3 and 4.3 million doses in Q4.
"We believe that a successful execution of the National Covid-19 Immunisation Programme will be key to lifting market sentiment," they said, keeping their Bursa Malaysia's benchmark index target of 1,759 points.
The benchmark FBM KLCI ended at 1,595.29, or down 10.85 points, yesterday as investors continued to take profit particularly in selected heavyweights following four days of gains.