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PublicInvest Research

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

 

PublicInvest Research Headlines - 9 Jun 2020

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Economy

Global: World Bank says coronavirus to shrink 2020 global output by 5.2%. The coronavirus will cause global economic output to contract by 5.2% in 2020, the World Bank said, warning that its latest forecasts would be revised downward if uncertainty over the pandemic and business lockdowns persists. In its latest Global Economic Prospects report, the World Bank said that advanced economies are expected to shrink 7.0% in 2020, while emerging market economies will contract 2.5%, their first since aggregate data became available in 1960. On a per-capita GDP basis, the global contraction will be the deepest since 1945-46 as World War Two spending dried up. (Reuters)

US: Consumers grew slightly more optimistic about jobs and earnings in May. US consumers felt slightly more optimistic about their finances and job security in May as businesses began to reopen and rehire workers following the easing of coronavirus related restrictions, according to a survey released by the New York Federal Reserve. While the economic effects of the coronavirus pandemic were still broadly evident, the findings support recent employment data suggesting the worst of the job losses caused by the pandemic may have passed. (Reuters)

US: Fed expands main street to include more small businesses. The Federal Reserve expanded its Main Street Lending Program, allowing more companies to participate and lessening the burden on banks that create the loans. “Supporting small and mid-sized businesses so they are ready to reopen and rehire workers will help foster a broad-based economic recovery,” Fed Chair Jerome Powell said in a statement accompanying the announcement. “I am confident the changes we are making will improve the ability of the Main Street Lending Program to support employment during this difficult period.” (Bloomberg)

EU: Investor morale improves but road to normality is long - Sentix. Investor morale in the eurozone improved in June and an assessment of expectations rose to its highest level since Nov 2017 as the bloc is waking up from its deep sleep, a survey showed on Monday. Sentix’s index for the euro zone rose to -24.8 from -41.8 in May. That compared with the Reuters consensus forecast for a reading of -22.5. A current situation index rose to -61.5 from -73.0 in May. The expectations index rose to 21.8 from -3.0 in May, registering its third increase in a row and hitting its highest level since Nov 2017. (Reuters)

EU: German industrial output posts record plunge, no quick recovery in sight. German industrial output posted a record plunge in April as the coronavirus pandemic forced manufacturers in Europe’s largest economy to halt production, with firms expecting a bumpy road ahead despite a massive stimulus package. Industrial output dropped by 17.9% on the month, figures released by the Statistics Office showed. Manufacturers of capital goods recorded the steepest decline of -35.3%. Output in the energy sector dropped by 7.2% and construction was down 4.1%. As measures to contain the spread of the coronavirus were implemented from mid-March, the restrictions took their toll on a full scale in April. (Reuters)

UK: Consumers, retailers hit hard by coronavirus lockdown. The scale of the coronavirus’s impact on UK consumers is becoming clearer just as the lockdown is starting to ease. Britons drastically reduced spending last month after about a third of families experienced a loss of income, reports showed. Those in trouble with debt are borrowing more, while shops are waiting to see how much business will bounce back. Prime Minister Boris Johnson is moving to loosen lockdown restrictions that have been in place since March 23. More stores will re-open on June 15, and pubs and restaurants may be able to serve customers outside from July 4. The orders to work from home and maintain social distancing has hit poorer people harder. (Bloomberg)

Japan: Economy shrinks less as analysts question capex data. Japan’s economy shrank less than initially estimated in the 1Q due to surprisingly strong business investment, but analysts warn the latest revised figures likely offer a distorted view of the economy’s health. The latest data show the economy contracted at an annualized pace of 2.2% last quarter, less than a 3.4% drop in initial calculations. But the result was based on a survey that probably overstated the strength of business investment amid the coronavirus pandemic. (Bloomberg)

India: Borrowing costs for India’s shadow banks finally start to fall. Borrowing costs for India’s top-rated shadow financiers declined last month, after the most aggressive economic policies in a decade helped avert a further worsening in the sector during the pandemic. India’s policy makers are leaving no stone unturned to help non-bank lenders overcome a credit crisis that started in 2018 and worsened after the world’s biggest lockdown was imposed to contain the spread of the virus. Supporting these financiers that lend to everyone from small merchants to tycoons is essential to Prime Minister Narendra Modi’s efforts to revive an economy that’s set to shrink for the first time in four decades. (Bloomberg)

Markets

Berjaya Corp: Wins tender for luxury hotel project in Yokohama . Berjaya Corporation (BCorp) said it has won a development tender approval by the City of Yokohama to develop projects involving a global luxury hotel and hotel condominium, together with aquarium and retail outlets. The land for the project is located at the Nishi District of Yokohama, and measures approximately 22,188.34 square metres. (The Edge)

BHIC: Served with RM43m claim from Mindef over breach of obligations in submarine contract . Boustead Heavy Industries Corp (BHIC)’s 60-40 subsidiary with France’s Naval Group has been served with claims for RM11.65m and EUR6.46m (RM31.13m) from the Ministry of Defence (Mindef) for liquidated damages pertaining to a breach of obligations under the provision of two prime minister-class submarines for the Royal Malaysian Navy. (The Edge)

Econpile: Bags RM104.5m concrete works from WCT. Econpile Holdings has bagged RM104.5m contract reinforced concrete works from WCT. The contract is for the retail podium under Parcel 2 of the superstructure works for the Pavilion Damansara Heights mixed development at Jalan Damanlela in Kuala Lumpur. "The overall duration of the sub-contract is about 17 months and works are expected to commence in June 2020. Econpile Holdings ED and group CEO Raymond Pang said Econpile's current orderbook stood at RM780m, which will last the group over the next two years. (New Straits Times)

UDA Holdings: Aims to diversify further to stay relevant, competitive. UDA Holdings plans to diversify further its businesses to ensure that the government-linked company remains competitive and relevant in the future. Chairman Datuk Jalaluddin Alias said the businesses being looked at would be based on the new normal in order to boost confidence of the public, including business people, amid the COVID-19 pandemic. “We will emphasise on food and beverages (F&B) and our asset management businesses while stressing on businesses that are pertinent to the new norm, which should be practised and welcomed by businesses (operating from UDA Holdings’ premises) currently,” he told. (Bernama)

Green Packet: Diversifies into cloud computing solutions . Green Packet is diversifying its principal business activities to include cloud computing solutions. The new cloud computing business will be a key strategic pillar in its overall play in the digital and technology ecosystem. Green Packet said that by venturing into the cloud computing business, a new revenue stream will be formed. Particularly, Green Packet said it intends to focus on providing services such as Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). (The Edge)

Permaju: After sanitiser and purifier, Permaju now dips its toes into glove business . After announcing plans to venture into bottling and distributing of sanitiser products, as well as selling air purification products amid the Covid-19 pandemic, Permaju Industries is now eyeing the rubber gloves business. Permaju, said that it has incorporated a company named Permaju Glove SB (PGSB). (The Edge)

Market Update

The FBM KLCI might open higher today after major U.S. stock benchmarks finished Monday above, or near, their prior all-time closing highs, as lockdown measures eased in New York City and elsewhere, sparking optimism about the potential for economy recovery. The Dow Jones Industrial Average climbed 461.46 points, or 1.7%, to end at 27,572.44, its sixth straight gain. The S&P 500 rose 38.46 points, or 1.2%, finishing at 3,232.39. The tech-heavy Nasdaq Composite Index gained 110.66 points, or 1.1%, ending at 9,924.74, a new all-time closing record. The Federal Reserve has been wildly successful in terms of keeping credit flowing during the pandemic, with major U.S. equity and debt benchmarks already recouping significant lost ground since the COVID-19 pandemic forced the nation into lockdown. In global equities, the Stoxx Europe 600 index closed down 0.3% and the FTSE 100 index fell 0.2%. In Asia, Japan’s Nikkei closed 1.4% higher, the China CSI 300 finished 0.5% higher and Hong Kong’s Hang Seng Index finished slightly higher. South Korea’s Kospi index gained 0.1%.

Source: PublicInvest Research - 9 Jun 2020

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