PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 27 Jan 2021, 11:10 AM


PublicInvest Research Headlines - 20 Mar 2020

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US: Weekly jobless claims jump to 281,000 ahead of surge in coronavirus layoffs . Jobless claims rose to 281,000 last week, reflecting only the first indications of the impact the coronavirus will have on the US employment picture. That number reflected a significant rise from last week’s 211,000, which was unrevised from the initial estimate, according to the Labor Department. It was the highest number since Sept. 2, 2017. The department said the numbers were “clearly attributable to impacts from the COVID-19 virus. (CNBC)

US: Trump sticks to his China tariff guns, ignoring pleas for relief . It’s taken weeks of calls and letters to the Trump administration to get a response over potential tariff reductions as the coronavirus outbreak threatened to snuff out countless small and medium-sized US businesses. According to one estimate, suspending the duties he’s imposed on Chinese goods and global steel and aluminum imports would provide a boost to the US economy of more than USD75bn, or 0.4% of US GDP, Americans for Free Trade wrote in their letter. “There’s no reason to do that. I can’t imagine Americans asking for that,” Trump said, again falsely claiming that China pays the tariff bills. (Bloomberg)

EU: German business sentiment worst since 2009 amid Covid- 19 outbreak . Germany's business confidence plunged to its lowest level since the global financial crisis as the spread of coronavirus took its toll on economic activity, survey results from the think tank ifo showed. The ifo also downgraded its GDP forecast sharply due to the coronavirus, or Covid-19, pandemic. Elsewhere, the think tank DIW also predicted a recession for the Germany economy this year. (RTT)

UK: BOE cuts key rate, boosts asset purchases, TFSME scheme on Covid-19 . The BOE cut the bank rate again, and expanded its bond buying scheme and the targeted funding measure for small and medium businesses, extending further support to the UK economy amid the spread of the coronavirus, or Covid-19. In a special meeting, the Monetary Policy Committee voted unanimously to increase the BOE’s holdings of UK government bonds and sterling non-financial investment-grade corporate bonds by GBP200bn to a total of GBP645bn, the bank said. Policymakers were also unanimous in reducing the bank rate by 15 bps to 0.1%. (RTT)

Japan: All industry activity rises in Jan. Japan's all industry activity rose in Jan after falling in the previous month, figures from the Ministry of Economy, Trade and Industry showed. The all industry activity index rose 0.8% MoM in Jan, after a 0.1% fall in Dec. Among components, construction activity rose 0.8% monthly, after a 1.9% fall in Dec. The tertiary industry activity increased 0.8% in Jan, after a 0.3% rise. (RTT)

I ndonesia: Bank Indonesia cuts rates, steps up operations to calm market spooked by virus. Indonesia's central bank cut interest rates and flagged room for more easing, as it slashed its 2020 economic growth forecast for Southeast Asia's largest economy, with the coronavirus outbreak pilling up pressure on the rupiah. Bank Indonesia (BI) trimmed the 7-day reverse repurchase rate by 25 bps to 4.50% — the lowest since April 2018. (Reuters)


GENM (Trading Buy, TP: RM2.60): Injects RM174.8m into Empire Resorts. Genting Malaysia (GENM) has entered into a subscription agreement with Nasdaq-listed Empire Resorts Inc to inject USD40m (RM174.8m) into the latter. The equity injection is done by subscribing to Empire Resorts Series G Preferred Stock, with a maturity date of Dec 31, 2038. The injection would enable Empire to have funds for refinancing and provide additional funds for its working capital, if deemed required in view of the recently announced temporary closure of Resorts World Catskills (RWC) by the authorities due the COVID-19 pandemic. (The Edge)

Advance Synergy: Indonesian unit offered RM1.66m out-of-court settlement. Advance Synergy’s indirect Indonesian subsidiary, PT Diwangkara Holiday Villa Bali (DHVB), has entered into a settlement agreement with counterparties which it is suing. DHVB was offered an IDR6bn (RM1.66m) cash settlement by CV Telabah Nasional Trading Company and PT Diwangkara Jaya Makmur, whose shareholders are the heirs of the hotel’s owner. They had been sued by DHVB in May 2019 for alleged breach of contract. The settlement is expected to result in a gain of about RM520,000 to the group or an increase in EPS of 0.056 sen. (The Edge)

7-Eleven: Receives valid acceptance of 90.58% stake in Caring Pharmacy. 7-Eleven Malaysia Holdings’ mandatory general offer (MGO) for Caring Pharmacy Group at RM2.60 apiece has reached a valid acceptance level of 90.58%. With that, trading in Caring shares will be suspended five market days after the close of the offer, as 7- Eleven did not intend to maintain the listing status of Caring. The offer is open for acceptances until 5pm on March 27. Accordingly, the notice will be despatched to the dissenting holders within one month from March 13, 2020. (SunBiz)

Kejuruteraan Asastera: Abandons plans to venture into solar business. Kejuruteraan Asastera (KAB) has called off its solar energy investment venture. Back in January, KAB entered into a Heads of Agreement (HoA) with LeveragEdge SB (LSB) and LSB’s director Loo Chun Keat, to acquire a 30% stake comprising 37,500 shares in the enlarged issued share capital of LSB for RM2.1m. At the time, KAB said it would be expanding into the solar energy industry via the proposed acquisition. (The Edge)

Rubber Gloves (Overweight): MARGMA urges Govt to allow rubber glove industry to run at full capacity. The Malaysian Rubber Glove Manufacturers Association (MARGMA) is urging the Government to allow glove manufacturers to run at full capacity during the Movement Control Order (MCO) period compared with the current 50% operating load. Malaysia is expected to produce 220bn pieces of rubber gloves this year because rubber gloves are needed to fight COVID-19. The industry would be able to meet demand through time management and running the production lines faster. (Bernama)

Plantations (Neutral): Plantation companies to ensure enough palm oil supply for manufacturers. The government’s decision to allow sectors producing critical goods, including vegetable oils, to continue operations during the Movement Control Order (MCO) will ensure sufficient supply of palm oil for the production of household products locally and abroad. Sime Darby Plantation said while adhering to the guidelines in accordance with the directives under the National Security Council’s MCO, it reaffirmed that the health and wellbeing of its employees, customers and the public are of utmost priority. (The Edge)

Market Update

The FBM KLCI might open higher today as US stocks closed modestly higher Thursday, in another volatile session, as central banks and governments pledged support for the economic shocks from the coronavirus pandemic that’s claimed more than 8,000 lives around the globe. The Dow Jones Industrial Average gained 188.27 points, or 1%, to 20,081.19. The S&P 500 rose 0.5%, or 11.29 points, to close at 2,409.39. The Nasdaq Composite Index advanced 160.73 points, or 2.3% to end the session at 7,150.58. Elsewhere, The Bank of England on Thursday cut its bank rate by an additional 15 basis points to 0.1% and increased its bond buying program. The STOXX Europe closed 2.9% higher, while the FTSE 100 added 1.4%.

Back home, the FBM KLCI closed down 19.29 points or 1.56% at 1,219.72 after cutting losses in the afternoon, as oil palm plantation shares rose after the Malaysian government allowed the industry to continue operating during the nation’s 14-day movement control order (MCO) to curb the spread of the Covid-19 infection. The regional markets finished broadly lower with shares in Hong Kong leading the region. The Hang Seng was down 2.61% while Japan's Nikkei 225 was off 1.04% and China's Shanghai Composite was lower by 0.98%.

Source: PublicInvest Research - 20 Mar 2020

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