PublicInvest Research

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


PublicInvest Research Headlines - 29 Apr 2020

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US: Consumer confidence deteriorates sharply in April but expectations improve. Consumer confidence in the US deteriorated significantly in the month of April, according to a report released by the Conference Board on Tuesday, although the report also showed an improvement in consumer expectations. The Conference Board said its consumer confidence index plunged to 86.9 in April after tumbling to a downwardly revised 118.8 in March. Economists had expected the index to plummet to 90.0 from the 120.0 originally reported for the previous month. (RTT)

US: Goods trade deficit rises as auto exports tumble. The US goods trade deficit widened in March amid a collapse in exports of motor vehicles and parts, but overall imports continued to decline likely as the novel coronavirus outbreak disrupted the flow of goods. The Commerce Department said on Tuesday the goods trade gap increased 7.2% to USD64.2bn last month. The government is scheduled on Wednesday to publish its snapshot of 1Q GDP.. (Reuters)

US: White House official warns of negative shocks before rebound later in 2020. Top Trump adminstration officials on Tuesday predicted a strong economic rebound in the 4Q as the coronavirus fades, but a senior White House adviser warned that near-term unemployment and GDP data will be a “very grave” negative shock. Kevin Hassett, senior economic adviser to President Donald Trump said that unemployment could reach 16- 20%, and GDP output could fall as much as 30-40% on annualized basis in the second quarter, a prediction in line with Wall Street and Congressional Budget Office forecasts. (Reuters) US: Fed seen making small changes to keep fed funds above zero. The Federal Reserve is widely expected on Wednesday to lift the interest rates that influence its fed funds target, a technical move that could keep interbank lending running smoothly and help prevent financial market disruption should the benchmark rate fall below zero. The effective fed funds rate dropped as low as 0.04% twice in the past week. That matched the level set in Dec 2011, two years after the economy emerged from the last recession, heightening concerns among some investors that it could go negative for the first time in the wake of the Fed’s aggressive moves to limit market damage from the coronavirus outbreak. (Reuters)

EU: Spain jobless rate rises in 1Q. Spain's unemployment rate increased in the 1Q due to the lockdown imposed to curb the spread of coronavirus, data from the statistical office INE showed Tuesday. The jobless rate rose to 14.4% in the 1Q from 13.8% in the 4Q. Economists had expected unemployment to rise to 15.6%. In the same period last year, the jobless rate was 14.7%. The number of unemployed persons increased by 121,000 to 3.3m. The number of employed persons decreased by 285,600 from the previous quarter to 19.7m in the 1Q. (RTT)

EU: Italy economy minister says Fitch downgrade does not take account of EU, ECB decisions. Fitch’s downgrade of Italy does not take proper account of the important economic decisions taken by the European Union and the ECB, the Italian economy minister said. Fitch cut Italy’s credit rating to ‘BBB-‘ on Tuesday, saying the downgrade reflects the significant impact of the coronavirus pandemic on the country’s economy. Roberto Gualtieri said the government was fully aware of the need to reform the economy and bring down debt, adding the country’s economic fundamentals were solid. (Reuters)

UK: Corporate profitability hit 10-year low in late 2019. British companies’ profitability dropped to its lowest in more than a decade in the final three months of 2019, when concerns about Brexit and political uncertainty - rather than the coronavirus - were to the fore, official data showed on Tuesday. The net rate of return for private non-financial companies dropped to 9.3% in the 4Q from 9.8% in the 3Q of 2019, its lowest since the 2Q of 2009, when the economy was in the depths of the financial crisis. (Reuters)

China: USD600bn bet to revive growth with infrastructure. China is trying to build its way out of the coronavirus slump. Economists expect local governments across the country to issue as much as CNY4trn (USD565bn) in so-called special bonds this year, roughly twice last year’s total. The proceeds are to be spent on the same type of things that China splurged on following the global financial crisis more than a decade ago - roads, airports, and railways. The plan is evident in the city of Heze in Shandong province, a relative backwater that’s nevertheless starting work on a connection to its first high-speed railway line. (Bloomberg)

Singapore: Covid-19 pandemic clouds GDP outlook - MAS. Singapore's recovery prospects were dampened by the Covid-19 pandemic as it has undermined spending as well as production, the central bank said Tuesday. GDP growth forecast range was downgraded and widened, to -4% to -1.0% from -0.5% to 1.5% previously, the Monetary Authority of Singapore said in its biannual Macroeconomic Review. The signing of the US-China phase 1 trade deal and nascent signs of a turnaround in the global electronic cycle were expected to lift Singapore's growth in 2020. (RTT)


MyEG: Unit rolls out contact tracing and health profiling app in Philippines. MyEG’s Philippines unit has rolled out a contact tracing and digital health profiling smartphone app known as MyEGuard in several cities in Philippines The system was jointly developed by MyEG and S5 Systems SB. MyEGuard will enable authorities to carry out contact tracing as part of efforts to curb the spread of Covid-19. In addition to contact tracing, residents of the participating Philippine cities will be assigned a dynamic coloured QR code. (The Edge)

Permaju, AT Systemization: Teamed up to distribute Penaclo sanitizing box. Permaju Industries has teamed up with AT Systematization (ATS) to distribute and market Penaclo solutions via an engineered sanitising box. The companies said Penaclo was capable of dispensing sanitizer and disinfectant liquid solution evenly on any person walking through the box. It claimed that Penaclo was one of the very few sanitizer solutions that was successfully tested by the State Key Lab of Respiratory Disease of China as effective in eradicating over 99.95% of the Covid-19 virus within the first 30 seconds of application, and was proven safe to animal cells. (NST)

Yinson: Sumitomo to take up 25% stake in unit that operates FPSO vessel in Brazil. Japan’s Sumitomo Corp is taking up a 25% stake in Yinson’s unit that operates a FSPO vessel facility in Brazil. The stake is valued at USD3.34m (RM14.57m), Yinson said. The unit had in March entered into a time charter contract and service contract with Brazilian national oil company Petrobas for the provision of the Marlim 2 FSPO. (The Edge)

Notion Vtec: Units to ramp up ops to full capacity following MITI’s announcement. Precision components manufacturer Notion Vtec said its units will ramp up operations to full capacity, following the relaxation of the Movement Control Order (MCO) announced by MITI. Notion Vtec’s units that had previously received the approval letters from MITI to operate during the MCO, will ramp up the operations to full capacity effective April 29," Notion Vtec said. “The company will ensure that the established standard operating procedures are complied with,” it added. (The Edge)

FGV: Sees significant drop in palm oil output due to Covid- 19 control order. FGV Holdings warned its palm oil output is poised to drop this year, as the MCO limit the strength of its plantation workforce. "In terms of our crops, we are projecting a significant shortfall in production in 2020," CEO Datuk Haris Fadzilah Hassan said. "For our downstream business, we are expecting a reduction in processing volume especially for the export and bulk product segments," he said. (StarBiz)

Rubber Gloves (Outperform): Resuming full operations may take time for some companies – MARGMA. While the government has given the green light for companies in approved sectors to resume full operations, MARGMA said some of the companies may experience delays in returning to normal levels. MARGMA said that there is still some gearing up to do by the operators, and this could take weeks in some cases. “It is good that the government has been proactive in getting many industries back into operation. (The Edge)

Market Update

The FBM KLCI might open lower today after US oil prices endured another day of volatile trading on Tuesday as concerns over storage capacity prompted fears the American crude benchmark could again plummet into negative territory. The West Texas Intermediate contract for June delivery fell 20% to a low of USD10.07 a barrel in early London trading, before clawing back nearly all of its losses to settle 3.4% lower at USD12.34. At the closing bell, the S&P 500 closed down 0.5%, while the tech-heavy Nasdaq Composite slid 1.4% ahead of the release of closely watched earnings results from Alphabet, Google’s parent company. Equity markets in Europe shrugged off volatility in oil prices to push higher. The European benchmark Stoxx 600 added 1.5%, while London’s FTSE 100 rose 1.9% and Frankfurt’s Xetra Dax gained 1.3%.

Back home, the FBM KLCI closed up 2.04 points or 0.15% at 1,372.20 after erasing intraday losses as crude oil’s price drop fuelled uncertainty in world markets already laden with Covid-19 pandemic concerns. Equity markets across the region had also been largely unmoved by ructions in the oil market overnight. Japan’s Topix rose 0.1%, while South Korea’s Kospi edged up 0.6% and China’s CSI 300 added 0.7%.

Source: PublicInvest Research - 29 Apr 2020

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