PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 27 Nov 2020, 11:04 AM


PublicInvest Research Headlines - 15 Apr 2020

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Global: IMF says the world will ‘very likely’ experience worst recession since the 1930s. The global economy will this year likely suffer the worst financial crisis since the Great Depression as governments worldwide grapple with the Covid-19 pandemic. The Washington-based organization now expects the global economy to contract by 3% in 2020. By contrast, in Jan it had forecasted a global GDP expansion of 3.3% for this year. The dramatic downgrade in this year’s growth expectations comes as other institutions also warn that the coronavirus outbreak is bringing massive economic challenges. The World Trade Organization forecasted that global trade will contract by between 13% and 32% this year. (CNBC)

US: Import prices fall sharply amid nosedive in fuel prices. Import prices in the US showed a steep drop in the month of March while export prices also fell sharply. Import prices plunged by 2.3% in March after falling by a revised 0.7% in Feb. This nosedive reflected the largest monthly drop in import prices since Jan 2015. Economists had expected import prices to tumble by 1.7% compared to the 0.5% drop originally reported for the previous month. The bigger than expected decrease in import prices came as prices for fuel imports plummeted by 26.8% in March after sinking 9.0% in Feb. Prices for petroleum and natural gas both showed substantial decreases. Excluding the steep drop in fuel prices, prices for non-fuel imports were unchanged in March after rising by 0.3% in Feb. Lower prices for consumer goods and foods, feeds, and beverages offset higher prices for automotive vehicles, non-fuel industrial supplies and materials, and capital goods. (RTT)

EU: France sees economy shrinking 8% due to COVID-19 effects. The French government has scrapped its days-old economic outlook after its President extended a national lockdown, shutting down swaths of the euro zone's second-biggest economy. Their economy is now expected to contract 8% this year instead of the 6% flagged as recently, revising the number to take the longer lockdown into account. The extension would put additional strain on public finances, blowing the public sector budget deficit out to a post-World War II record of 9% of GDP. (Reuters)

UK: Economy could shrink by the most in 300 years in 2020. Britain’s economy could shrink by 13% this year due to the government’s coronavirus shutdown, its deepest recession in three centuries, and public borrowing is set to surge to a post-World War Two high. In the April-June period alone, economic output could plunge by 35%, with the unemployment rate more than doubling to 10%. A bounce-back may come later in the year if restrictions on public life to slow the spread of the coronavirus are lifted. (Reuters)

China: Exports, imports fall less than expected. China's exports and imports declined at a slower than expected pace in March despite the spread of covid-19 among its major trading partners. In dollar terms, exports decreased 6.6% on a yearly basis in March. This was slower than the expected decrease of 14%. Imports were down 0.9% versus the expected decline of 9.5%. Therefore, the trade balance showed a surplus of USD19.9bn compared to economists' forecast of USD18.5bn. In yuan terms, exports decreased 3.5% from last year, while imports grew 2.4%, taking the trade surplus to CNY130bn in March. (RTT)

China: 2020 GDP growth set to sink to 44-year low as coronavirus cripples economy - Reuters poll. China’s economic growth is set to stumble to its slowest annual pace in nearly half a century, as the coronavirus health crisis shutters businesses and brings the global economy to a standstill. Growth in the world’s second-biggest economy for 2020 was forecast at 2.5%, according to the median of 62 analysts surveyed by Reuters, which would mark the weakest clip since 1976, the final year of the decade-long Cultural Revolution that wrecked the economy. That is a sharp easing from a 6.1% gain in 2019, and is below the 5.4% growth forecast in the March poll. (Reuters)

Japan: BOJ's Kuroda told G7 ready to ease policy to combat coronavirus fallout. BOJ’s Governor explained to his G7 counterparts that the central bank would not hesitate easing monetary policy further depending on how the coronavirus pandemic affects the country’s economy. The economy is coming under pressure from the global spread of the coronavirus and he is closely watching the developments regarding the pandemic in order to take the appropriate actions. (Reuters)

Thailand: Economy could lose over USD40bn if virus crisis goes beyond 2Q. Thailand’s economy is expected to lose THB1.3trn (nearly USD40bn), almost all of it in the tourist sector, due to the initial impact of the coronavirus pandemic. However, a government package of economic measures worth THB1.9trn should help mitigate the virus impact on Southeast Asia’s second largest economy. The central bank has forecast the economy to contract 5.3% this year, which would be the weakest performance since 1998, when the Thailand was ravaged by the Asian financial crisis. (Reuters)


MyEG: Launches food service platform to help vendors get online. MyEG Services is introducing a new food service platform called Nak Makan to sell freshly cooked meals and food products online. The platform will initiate three phases that will address different elements of the fasting month and subsequent Eid festivities. This initiative is introduced since Ramadan bazaars will not be operating while the MCO is still in force. It aims to support local food vendors who may not have the IT know-how. (The Edge)

mTouche: Supplying Covid-19 test kits to pandemic frontline in SE Asia. MTouche Technology has inked a supply agreement with Network Global Solutions Pty Ltd (NGS) to market and distribute medical equipment for Malaysia and South East Asia market. Under the agreement, mTouche will collaborate with NGS to promote, market and distribute Novel Coronavirus (2019-nCoV) RT-PCR detection and diagnostic kits and Novel Coronavirus IgM/IgG rapid test kits, and other equivalent products in this region. (SunBiz)

Solarvest: Secures maiden projects in Philippines. Solarvest Holdings has secured two new contracts, involving engineering, procurement, construction and commissioning works, in the Philippines from Vivant Energy Corporation. This marks its first venture into the Philippines. The first project is for the development of solar PV systems at 10 designated buildings with a cumulative capacity of 816.2 kWp and the second solar project is the development of 377.52 kWp solar PV systems for Bulihan Industrial Park. (The Edge)

Konsortium Transnasional: Alips into PN17 status. The auditors stated its concern in the company’s audited financial statements for the year ended Dec 31, 2018. In an independent auditors’ report, Messrs Al Jafree Salihin Kuzaimi PLT said the group and company’s current liabilities, as indicated in the financial statements FYE Dec 31, 2018, exceeded current assets by RM63.07m and RM14.10m, respectively. As such, KTB said it is looking into formulating a plan to regularise its financial condition. (SunBiz)

Tiger Synergy: Calls off agreement with Quest Investments. Tiger Synergy has aborted its binding term sheet with ASX-listed Quest Investments Limited (QST) for the acquisition of its Hong-Kong based stockbroking business, Quest Stockbrokers (HK) Limited due to the non-compliance of the listing requirements of Bursa Securities Malaysia by QST. The proposed acquisition was announced last year and involved the acquisition of the entire equity interest in MQ Holdings Ltd for not less than HKD15m. (SunBiz)

AHB: Gets 6-month extension for private placement. AHB’s application to extend the time to complete its private placement by six months, has been approved by Bursa Malaysia. The new completion date is now Nov 4. The placement comprises 52.81m shares, representing 30% of the group’s issued shares. This is the second extension given to the group in relation to its private placement exercise. (The Edge)

Airlines (Underweight): Give soft loans to airlines to help them recover from Covid-19 crisis, MATTA tells govt. The Malaysian Association of Tour and Travel Agents (MATTA) has urged the government to consider providing financial support to the local aviation industry and airlines to help them survive and recover from the impact of the Covid-19 outbreak. This includes providing soft loans to the airlines including Malaysia Airlines and AirAsia Group. (The Edge)

Market Update

The FBM KLCI might open higher today as U.S. stocks closed sharply higher Tuesday, lifted by growing expectations that the worst of the human toll of the COVID-19 pandemic may have passed. But the economic fallout is only starting to be tallied as first-quarter corporate earnings reporting season kicks off, shedding more light on the business impact of government efforts to slow the spread of the disease. The Dow Jones Industrial Average rose 558.99 points, or 2.4%, to end at 23,949.76, the S&P 500 index gained 84.43 points, or 3.1%, to close at 2,846.06, and the Nasdaq Composite Index advanced 323.32 points, or 4%, to finish at 8,515.74 In Europe, stocks finished mixed, with the Stoxx Europe 600 up 0.6% and the FTSE 100 down 0.9%.

Back home, the FBM KLCI closed up 15.63 points or 1.15% at 1,371.66, while Bursa Malaysia’s ACE Market index rose by a significantly higher quantum as investors weighed updates on China’s March 2020 exports, which fell less than expected and as global economies mitigate the impact of the Covid-19 pandemic. In the region, stocks also rallied with the China CSI 300 gained 1.9%, Japan’s Nikkei 225 gained 3.1% and Hong Kong’s Hang Seng index rose 0.6%.

Source: PublicInvest Research - 15 Apr 2020

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