PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 30 Nov 2020, 4:57 PM


PublicInvest Research Headlines - 7 Apr 2020

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Malaysia: Stimulus Package – SMEs. The government unveiled an additional RM10bn assistance package targeted at helping small and medium enterprises (SMEs) affected by the movement control order (MCO) and the Covid-19 pandemic. (The Edge)

Comments: The government yesterday announced a special stimulus package worth RM10bn aimed for the small and medium enterprise (SMEs) in its bid to offset the adverse impact from Covid- 19. The SMEs which contribute about 40% to GDP and make up two-thirds of the workforce in the country have been affected by the Mandatory Control Order (MCO) where business shut-downs have hit sales and cash flows subsequently affecting their ability to preserve employment. The government, among others, announced micro measures that would increase wage subsidy for employers to  RM13.8bn from RM5.9bn previously, creation of RM2.1bn Prihatin Special Grant for all SMEs, RM200m micro loan scheme to Tekun Nasional, abolishment of 2% interest rate for the RM500m Micro Credit Scheme under Bank Simpanan Nasional and a special grant of RM3,000 to each company that will benefit nearly 700,000 micro SMEs. Though the new measures are well targeted but the package value could be too small considering the significant contribution of SMEs to the economy. The SMEs may also get hit again if the MCO is extended for the third time. There is no also certainty that the economy will be resuming normally after the restricted movement order is lifted where special requirement like social distancing may still be in force, causing business activities to remain slow to pick up. All in, the ability of SMEs to preserve employment may be jeopardized especially if Covid-19 lasts longer-than-expected.

EU: Investor confidence plummets to record low on Covid-19 shock. Eurozone investor confidence sunk to a record low in April as the coronavirus pandemic spread across the globe forcing several countries to enforce lockdowns, survey data from the behavioral research firm Sentix. The Sentix investor confidence index shed 25.8 points to reach an all-time low of -42.9. (Reuters)

EU: German orders slip in February in early taste of likely coronavirus impact. Orders for German-made goods dropped 1.4% in February, data showed, as a sharp fall in orders from abroad hinted at the likely impact of the coronavirus on the exporting powerhouse’s economic prospects. The figures published by the Statistics Office relate to the period before lockdown measures began to affect the German economy in earnest: domestic orders climbed by 1.7%, while orders from abroad shrank by 3.6%. (Reuters)

UK: Construction activity falls at fastest pace since 2009. The UK construction sector contracted at the steepest rate since April 2009 reflecting the impact of the Covid-19 pandemic, survey data from IHS Markit and Chartered Institute of Procurement & Supply showed. The construction PMI dropped to 39.3 in March from 52.6 in February. (RTT)

UK: Consumer confidence logs biggest fall on record – GfK. UK consumer sentiment registered its biggest fall since records began in January 1974 as measures taken to curb the spread of coronavirus weighed on households' economic expectations and purchase decision, survey data from the market research group GfK showed. The consumer confidence index fell to -34 from -9 seen in its regular survey for March, GfK said. (RTT)

China: Nearly half a million Chinese companies close in 1Q as pandemic batters economy. More than 460,000 Chinese firms closed permanently in the 1Q as the coronavirus pandemic pummeled the world’s second largest economy, with more than half of them having operated for under three years, corporate registration data shows. (SCMP)

Singapore: Unveils USD3.5bn in economic spending to combat coronavirus. Singapore announced SGD5.1bn (USD3.55bn) in additional economic spending such as wage support, waiver of levies and one-off payments to combat the coronavirus pandemic. “This is an unprecedented budget for extraordinary times,” Finance Minister Heng Swee Keat told. (Reuters)


Genting (Outperform, TP: RM5.10): Singapore’s Resorts World Sentosa ops, casino to close temporarily . Genting Singapore plc’s Resorts World Sentosa (RWS) will be temporarily suspending all guest offerings including Universal Studios Singapore, SEA Aquarium, Adventure Cove Waterpark and Dolphin Island, and casino until May 4, 2020, in line with the Singapore government’s directives. Only selected restaurants and food and beverage outlets, which can support the necessary daily living needs of residents, will remain open for takeaways and deliveries, said RWS. (The Edge)

Majuperak: Inks agreement to supply solar energy for Perak . Majuperak Holdings entered into a JV agreement to market and propose a solar photovoltaic generating system (SPS) utilising the Net Energy Metering (NEM) scheme, to provide a supply of renewable energy for buildings in the state of Perak. The agreement was inked between Majuperak Power Resouces SB, a wholly-owned subsidiary of Majuperak Holdings, and United Solar Energy (Malaysia) SB, a company in the renewable energy industry with both local and Australian expertise, specialising in solar technology. (SunBiz)

Permaju Industries: Enters deal to make HK firm’s sanitiser for SEA market. Permaju Industries is looking into bottling and distributing a Hong Kong firm’s sanitiser product for the Southeast Asian market. The group said its wholly-owned subsidiary Team Japs SB has entered into a collaboration agreement with Pentaweft Biotech Ltd to study the feasibility of making and distributing the “Penaclo solution” in Southeast Asian countries. The countries are Malaysia, Indonesia, Singapore, Vietnam, Thailand and the Philippines. (The Edge)

Heineken: MCO operation permission revoked — minister. The government has revoked the permission given to Heineken M to operate during the MCO period, according to Federal Territories Minister Tan Sri Annuar Musa. “[The permission] has been cancelled this morning, as it was not in line with the policy set up by the government,” Annuar Musa said. This follows a statement by Heineken on April 5, saying that it has received approval from the government for the brewer to resume limited operations with a minimal number of essential workers in the period. (The Edge)

Pintaras: To shut Singapore sites and office until May 4. Pintaras Jaya’s construction site and office in Singapore will be closed on April 7 to May 4, in line with the Singapore government’s decision to close all workplaces with the exception of essential service due to the Covid-19 pandemic. The group added that its tenders and orderbook numbers in the island republic remains robust and its site activities will be able to recommence immediately when the closure period expires. (SunBiz)

Airlines (Underweight): Malaysian firm bids USD2.5bn for Malaysia Airlines, funded by European bank. Privately-held Golden Skies Ventures (GSV) has made a USD2.5bn offer to fully take over the holding company of ailing state carrier Malaysia Airlines, with financing from a European bank, its executives told Reuters. GSV made the proposal a month ago, as airlines around the world were hammered by travel restrictions, following the coronavirus pandemic. “(We have secured) in excess of USD2.5bn from the bank. We will take about three to four months to get the long-term financing,” Chief Executive Shahril Lamin said. (Reuters)

Market Update

The FBM KLCI might rise at opening today after US stocks soared more than 7% Monday, ending near session highs, as investors focused on signs that the rapid spread of COVID-19 may be stabilizing in the New York, which is now the center of the pandemic. The Dow Jones Industrial Average rose 1,627.46 points, or 7.7%, to finish at 22,679.99. The S&P 500 climbed 175.03 points, or 7%, to end at 2,663.68. The Nasdaq Composite surged 540.15 points, or 7.3%, to close at 7,913.24. Meanwhile, the New York Federal Reserve said Monday that its commercial paper funding facility will begin on April 14, which will see the Fed buy commercial paper issued by corporations, banks and municipalities that have struggled to raise cash, seen as a key backstop of the US economy. The Fed and Treasury Department also said Monday that they plan to launch a new program to buy loans that financial firms make through the government’s emergency small-business lending program. European markets also closed sharply higher with the DAX jumped 5.77% while France's CAC 40 rose 4.61% and London's FTSE 100 tacked on 3.08%.

Back home, the FBM KLCI closed up 11.04 points or 0.83% at 1,341.69 while trading volume across Bursa Malaysia neared six billion shares after Asian equities ended higher as investors weighed the possibility that the increase in new Covid-19 cases has slowed. The Saudi Arabia-Russia crude oil price war is also closely watched. The regional markets ended mixed with the Nikkei 225 gained 4.24%, the Hang Seng rose 2.21% while the Shanghai Composite lost 0.60%.

Source: PublicInvest Research - 7 Apr 2020

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