Analysts wary of real world challenges
KUCHING: Malaysia’s vaccine demand-supply model alludes it is possible for herd immunity to be attained by year end, but analysts are cognisant on the real world challenges to this.
The research arm of Hong Leong Investment Bank Bhd (HLIB Research) gathered that despite an initial slow start since the National Covid-19 Immunisation Programme (JKJAV) began in February, the pace of vaccination has now ramped up significantly.
“Average daily vaccination has risen from 22,000 to 25,000 in March-April to 50,000 in May and 169,000 in June, while the month to date (MTD)-July sum stands at 326,000,” HLIB Research said.
“As of July 14, 26.5 per cent in Malaysia have received at least one vaccine dose (fully vaxed: 12.3 per cent), placing it at third spot within the 10-nation Asean.
“Based on the first quarter of 2021 (1Q21) population of 32.75 million and assuming a twodose regimen, this works out to 52.4 million jabs needed to hit Malaysia’s 80 per cent herd immunity goal.
“We modelled Malaysia’s vaccination trajectory based on the targets disclosed by Coordinating Minister of JKJAV, Khairy Jamaluddin.
“This assumes 390,000 average daily jabs in July, 434,000 in August before tapering to 210,000 to 215,000 in September-October, 131,000 in November and 81,000 in December.
“If these targets are met, achieving herd immunity by year end isn’t a far cry.”
According to HLIB Research, the critical targets are in July and August which is when inoculation is expected to peak.
Optimistic as it may sound, HLIB Research said in its report on July 16 that it believed July’s target of 390,000 jabs per day (up 130 per cent month on month) is attainable, seeing that daily numbers have surpassed the 400,000 mark for the past three consecutive days.
The research arm recalled that last month’s target of 150,000 was trumped, chalking at 169,000.
“With the significant rise in vaccination, daily jabs in July have consistently exceeded (by a far margin) the minimum threshold needed to hit herd immunity by year end.
“This has also resulted in the minimum threshold line tilting downwards since late-June.”
The research arm noted that intuitively, this implies Malaysia now has some ‘buffers’, that is, even if some delays occur, hitting herd immunity by year end should remain pretty much intact.
“While the exponential surge in vaccination is encouraging, another issue may soon surface: supply will exceed demand.
“Based on the projected vaccination trajectory (supply) versus demand, we estimate that almost everyone that’s already signed up on MySejahtera will be inoculated by mid-September.
“Sounds good, but not entirely, as current sign-ups on MySejahtera only form 55 per cent of population (as of July 11) versus the herd immunity goal of 80 per cent.
“In short, while vaccine administrating capabilities are there, it may soon reach a point where there are not enough sign-ups for vaxing to hit 80 per cent.”
Looking ahead, HLIB Research highlighted that JKJAV needs to narrow “the vax gap”. The research arm calculated Malaysia’s vax gap to now stand at 25 per cent of population (80 per cent herd immunity target minus 55 per cent sign up rate).
“By our estimates, sign-ups on MySejahtera would need to increase by 0.14 per cent (of population) daily from now till year end to reach 80 per cent.”
HLIB Research believed this pace is not out of reach as historical sign-ups have risen at a higher average daily rate of 0.38 per cent (of population).
The research arm also highlighted that closing the vaccination gap would complete the entire vaccine demandsupply equation needed for herd immunity to be achieved by year end.
“While our vaccine demandsupply model alludes it is possible for herd immunity to be attained by year end, we are cognisant on the real world challenges to this.
“On the supply side, these include ‘vaccine nationalism’, for example Thailand considering regulating AstraZeneca vax exports, and possible supply squeeze if other nations implement a third booster jab.
“For demand, unless mandatory vaccination is enforced, closing the vax gap entirely would be tough due to anti vaxxer propaganda, alongside challenges in reaching out to rural folk and those not connected via smartphones.”
HLIB Research noted that vaccination ramp up is crucial for Malaysia as it is one of the three thresholds needed to move up the reopening phases of its National Recovery Plan (NRP).
“With higher levels of inoculation, ICU and mortality rates should also ease amongst the infected, providing a much needed relief to the healthcare system.
“If this happens, absolute daily cases can perhaps take a lesser weightage in determining the transition along the NRP’s phases.”
For now, the research arm’s base case assumed Malaysia will transition to Phase 2 in August and Phase 3 towards endSeptember or early-October.