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Author: PublicInvest   |   Latest post: Tue, 14 Jul 2020, 10:11 AM

 

PublicInvest Research Headlines - 6 Mar 2020

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Economy

Global: IIF lowers 2020 global, US and China growth forecasts. The Institute of International Finance (IIF) downgraded its economic growth forecast for the US and China on Thursday, while warning that world growth could reach its weakest since the global financial crisis. Citing the economic impact of the coronavirus outbreak, the IIF lowered its forecast for US growth this year to 1.3%, down from 2% previously, with the epicenter of weakness in the 2Q, and China to just shy of 4% from 5.9% previously. Global growth in 2020 could conceivably approach 1%, far below the 2.6% expansion in 2019 and the weakest since the financial crisis. (Reuters)

US: Weekly jobless claims edge down slightly less than expected. The Labor Department released a report on Thursday showing a modest decrease in first-time claims for US unemployment benefits in the week ended 29 Feb. Initial jobless claims edged down to 216,000, a decrease of 3,000 from the previous week's unrevised level of 219,000. Economists had expected jobless claims to slip to 215,000. Continuing claims also rose by 7,000 to 1.72m in the week ended 22 Feb. (RTT)

US: Labor productivity growth unexpectedly downwardly revised in 4Q. Revised data showed US labor productivity increased by less than initially estimated in 4QFY19. Labor productivity climbed by 1.2% in the 4Q compared to the previously reported 1.4% jump. Economists had expected the pace of productivity growth to be unrevised from the initial estimate. The increase in productivity in 4Q came following a 0.3% drop in the 3Q, which was downwardly revised from a previously reported 0.2% dip. The weaker than previously estimated productivity growth in the 4Q came as output surged up by slightly less than initially estimated and hours worked jumped by slightly more than initially estimated. (RTT)

US: Factory orders pull back more than expected in Jan. New orders for US manufactured goods pulled back by much more than expected in the month of Jan. Factory orders slid by 0.5% in Jan after surging up by 1.9% in Dec. Economists had expected factory orders to edge down by 0.1%. Orders for durable goods dipped by 0.2% in Jan after spiking by 2.8% in Dec, with the drop in durable goods orders unchanged from the estimate reported last week. New orders for non-durable goods also slumped by 0.8% in Jan after jumping by 1.1% in the previous month. Shipments of manufactured goods also fell following three consecutive monthly increases, decreasing by 0.5% in Jan after climbing by 0.5% in Dec. Inventories of manufactured goods also edged down by 0.1% Jan after rising by 0.4% in the previous month. (RTT)

EU: German construction sector grows most since early 2018. Germany's construction sector grew for a sixth consecutive month in Feb to its strongest level in over two years, led by a robust residential building activity and an improving commercial activity sector. The PMI, rose to 55.8 from 54.9 in Jan. The latest reading was the best since Jan 2018. Homebuilding growth accelerated for the fifth consecutive month at its quickest pace in over two years. Commercial construction activity grew for a second month in a row to an 11-month high. Meanwhile, civil engineering activity continued to fall, but the decline was marginal. The overall increase in construction activity in Feb was partly due to the unseasonably mild weather. (RTT)

Singapore: Cars drag retail sales down 5.3% in Jan, in 12th straight month of decline. Takings at the till fell 5.3% in Jan from a year ago, weakening for the 12th consecutive month on the back of sliding auto sales. Excluding motor vehicles, retail sales edged up 0.6% in Jan. Sales of motor vehicles plunged 33.6% in Jan because of a lower COE quota, after a 24.1% drop in Dec. Household equipment and furniture sales dropped 16%, while those of optical goods and books fell 9.4%. Also seeing lower sales were computer and telecommunications equipment (-6.4%) and other products (- 4.9%). (The Straits Times)

Markets

Dagang NeXchange: Bags five-year Pan Malaysia umbrella contract. Dagang NeXchange has received a five-year Pan Malaysia umbrella contract from Petronas Carigali SB. The contract involves providing drilling equipment and services for its petroleum arrangement contractors. The company said the contract value and the detailed scope of work will depend on the work order request by Petronas Carigali throughout the contract duration. (The Sun Daily)

Pentamaster: Proposes one-for-two bonus issue. Pentamaster Corporation has proposed a one-for-two bonus issue of up to 237.43m new shares. Pentamaster said the issue is intended to reward shareholders and enable them to have greater participation in the equity of the group while maintaining their percentage of equity interest. The exercise may possibly be able to encourage trading liquidity and marketability of Pentamaster’s shares. The bonus issue is expected to be completed before the end of June. (The Edge)

Careplus: Sets RM26.97m as final sum to sell 50% stake in unit to Ansell. Careplus has determined the final disposal consideration for its 50% stake in loss-making subsidiary Careplus (M) SB (CMSB) at RM26.97m. On Feb 5, the company proposed a JV with Ansell Services (Asia) SB, in which the latter will acquire the 50% stake, equivalent to 14.55m shares. Careplus is expected to record a pro forma gain on the proposed disposal of RM16.3 million. Careplus has also agreed to grant Ansell options to buy Careplus’ remaining stake in CMSB, or to sell back its stake in CMSB to Careplus, pending certain criteria such as a change in Careplus’ shareholdings or the period of the JV. (The Edge)

FGV: Achieves 100% MPSO certification. FGV Holdings has announced that all of its 68 mills and 173 estates covering 373,517ha of land in the country are now fully certified under the Malaysian Sustainable Palm Oil (MSPO) certification Malaysian Standard MS 2530:2013. “It was an arduous but fruitful journey for us given the enormity of our operations all over Malaysia. We are thankful to MPOCC for their support and guidance throughout the certification process,” said FGV. It added that the MSPO certification was a reinforcement of FGV's commitment to sustainability and support for the government's efforts through the MPOCC to elevate Malaysian palm oil in the eyes of the world. (StarBiz)

Tanco: Plans to settle RM17m debt to major shareholder with new shares. Tanco Holdings is settling RM17.08m worth of debt owed to major shareholder and group MD Andrew Tan via the issuance of 341.59m new shares in the group at 0.5 sen each. Tanco's existing issued shares total 830.4m, of which Tan holds 51.49% stake. The settlement will raise Tan’s stake in Tanco to 65.63%, in an enlarged share base of 1.17bn shares. The proposed debt settlement is to clear off the total sum that Tanco owes to the Tan family, which has been providing financial support in the form of cash advances and payments since the FY12. (The Edge)

Comintel: Gets extension to July 24 to submit regularisation plan. Bursa Malaysia has granted Comintel Corp an extension of time up to July 24 to submit a regularisation plan. While an extension has been granted, Bursa said that it has the right to suspend the trading of Comintel’s shares and delist the company in the event the company fails to submit a regularisation plan by July 24. (The Edge)

Market Update

Covid-19 fears gripped markets again as California declared a state of emergency and the number of cases doubled overnight in New York. Countries around the world are also extending quarantines and travel restrictions. Weekly jobless claims underscored labour market strength amid the coronavirus outbreak however, slipping only 3,000 for the week to 216,000. The Dow Jones Industrial Average and S&P 500 slumped 3.6% and 3.4% while the Nasdaq Composite fell 3.1%. It was the same in Europe, with investors brushing off earlier optimism following the International Monetary Fund’s USD50bn aid package to low income and emerging market countries. OPEC has also agreed to a huge supply cut to offset the impact of the virus, pending Russian approval. France’s CAC 40 led major markets lower with a 1.9% drop. UK’s FTSE 100 and Germany’s DAX fell 1.6% and 1.5% meanwhile. Asian markets were mostly higher in positive reaction to Wall Street’s strong overnight performance and the IMF’s financial aid, the latter meant to bolster health care systems first and then for targeted fiscal stimulus programs. The Hang Seng Index and Shanghai Composite Index surged 2.1% and 2.0% respectively while the Nikkei 225 rose 1.1%.

Dagang NeXchange has secured a 5-year Pan Malaysia umbrella contract from Petronas Carigali for drilling-related works. Careplus Group has determined the final disposal consideration for its 50% stake in loss-making subsidiary Careplus (M) Sdn Bhd (CMSB) at RM26.9m, which will see the Group record a pro forma gain of RM16.3m

Source: PublicInvest Research - 6 Mar 2020

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