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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 15 Jan 2021, 10:38 AM

 

PublicInvest Research Headlines - 1 Jul 2020

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Economy

US: Consumer confidence perks up; rising COVID-19 cases cast shadow over recovery . US consumer confidence rebounded in June as businesses reopened, strengthening views that the economic downturn was likely over, though rising COVID-19 infections threaten to derail the budding recovery. The survey from the Conference Board followed a sharp surge in hiring and consumer spending in May. The housing market and manufacturing have also improved. Federal Reserve Chair Jerome Powell acknowledged the rebound in activity, saying the economy had “entered an important new phase and (had) done so sooner than expected.” (Reuters)

US: Payouts to US jobless surged past record USD100bn in June . The US Treasury Department has paid out more than USD100bn in unemployment benefits in June, the most for a single month since the pandemic started and underscoring the importance of federal relief efforts to shore up a battered job market. With just one day left to be reported, the US Treasury paid out USD108.5bn in unemployment benefits in June -- the most on record dating back to 2005 -- according to the department’s latest daily statement. While the labor market has started to improve, the recovery has been gradual. (Bloomberg)

UK: Bounceback hopes weakened as firms see record sales slump . Hopes of a swift recovery for the UK economy could be dashed, according to a survey that revealed the parlous state of Britain’s businesses. Measures of sales, orders and cashflow in the nation’s dominant services sector have plunged by the most in the 31-year history of the British Chambers of Commerce’s quarterly survey. Demand for goods from manufacturers also dropped in the three months through June, with sentiment in the industry sliding to the weakest level since the financial crisis. The findings add weight to concerns the economy will struggle to rebound quickly from the pandemic. (Bloomberg)

China: Factory outlook brighter in June as recovery continues . A gauge of China’s manufacturing activity climbed in June, signaling the country’s gradual recovery from the coronavirus slump remains on track. The official manufacturing purchasing managers’ index rose to 50.9 from 50.6 a month earlier, according to data released by the National Bureau of Statistics on Tuesday. The non manufacturing gauge rose to 54.4. Readings above 50 indicate improving conditions from the previous month. The data confirm the trend of a gradual domestic recovery from the historic contraction in the first quarter and back up the government’s relatively modest stance on policy stimulus. But with the coronavirus hitting global demand and continued outbreaks of the virus not ruled out, the rebound may prove hard to sustain. (Bloomberg)

Hong Kong: Retail sales fall further. Hong Kong's retail sales continued to fall for the sixteenth straight month in May, figures from the Census and Statistics Department showed. The retail sales volume declined 33.9% YoY in May, following a 37.5% decrease in April. The value of retail sales decreased 32.8% annually in May, following a 36.1% fall in the preceding month. Sales value of jewelry, watches and clocks, and valuable gifts declined 69.7% annually in May. Sales of other consumer goods decreased 42.4% and those of clothing, footwear and allied products fell by 36.2%. "Retail sales continued to fall sharply in May from a year earlier, as inbound tourism remained at a standstill and job and income conditions were weak," a government spokesman said. The decline narrowed further from that in April thanks to the stabilized local epidemic situation and consequential easing of social distancing measures, the spokesman noted. (RTT)

Japan: Housing starts continue sharp fall. Japan's housing starts continued to fall sharply in May, though at a softer pace, data from the Ministry of Land, Infrastructure, Transport and Tourism showed. Housing starts decreased 12.3% YoY in May, following a 12.9% fall in April. Economists had forecast an annual decline of 15.9%. Annualized housing starts increased to 807,000 in May from 797,000 in the previous month. Data also showed that construction orders received by the big 50 contractors fell 6.1 percent yearly in May, following a 14.2% decrease in April.

Markets

Eversendai: To pay RM235m for founder AK Nathan’s liftboat firm. Eversendai is to pay RM235m to acquire liftboat firm Vahana Offshore (M) SB via the issuance of new redeemable convertible preference shares (RCPS). Vahana is the privately-owned firm of Eversendai founder Tan Sri AK Nathan. Eversendai has signed an agreement to acquire 100% equity interest in Vahana Offshore. This will involve the issuance of 770.49m RCPS in Eversendai at 30.5sen each. (The Edge)

Berjaya Land: To receive RM362.19m in Jeju project settlement. Berjaya Land have entered into a settlement agreement with Jeju Free International City Development Center (JDC) to comprehensively and finally settle and resolve any and all potential disputes arising out of and/or in connection with the Jeju project and the JDC lawsuit. The estimated total settlement sum to be received by Berjaya land is KRW102bn (RM362.19m). (The Sun Daily)

MAHB: Slashes 2020 capex to RM320m from RM1.8bn. Malaysia Airports Holdings (MAHB) has slashed its planned RM1.8bn capex for 2020 by 82.22% to RM320m, as it embarks on an aggressive cost-optimisation plan. MAHB group CEO Datuk Mohd Shukrie Mohd Salleh said the bulk of the original capex allocation comprised funds for airport expansion and other projects under the regulated asset base (RAB) framework, which have been put on hold. “This allows us to just focus on six critical areas that need spending,” he said. MAHB has also successfully reduced its operating cost by 20%. (The Edge)

Sasbadi: Huawei to collaborate in e-learning products. Sasbadi Holdings plans to collaborate with China's Huawei on the development of e-learning products by leveraging the latter's cloud AI technology and to implement joint opportunities. Sasbadi has entered into a memorandum of collaboration with Huawei, which includes jointly promoting Sasbadi’s e-learning products in Malaysia and Southeast Asia via Huawei cloud marketplace. The memorandum will remain in force for two years. (The Edge)

Ikhmas Jaya: Auditor raises issues that cast doubt on Group’s ongoing concern ability. Ikhmas Jaya’s external auditor Messrs KPMG PLT has expressed an unqualified opinion with material uncertainty related to the going concern ability of the group in respect of FY19. It said the auditor drew attention to the Group and company’s incurred net losses of RM159.5m and RM161.8m respectively for FY19. At the same time, it also noted that the group’s current liabilities had exceeded its current assets by RM21.6m. (The Edge)

Tropicana: To continue introducing new developments in 2020 with GDV of RM1.6bn. Tropicana Corp 1QFY20 net profit fell 89% YoY to RM5.16m, due to lower progress billings on its key ongoing projects and lower sales during the MCO period. As at March 31, the group had recorded unbilled sales of RM727.2m, anchored by six ongoing townships, commercial and resort themed projects and its existing land bank of 2,344 acres with a total potential GDV of RM70bn. Tropicana will continue to introduce new developments and phases across its signature Tropicana townships with a GDV of RM1.6bn. (The Edge)

Market Update

The FBM KLCI might open higher as Wall Street ended the quarter stronger yesterday. The Dow Jones Industrial Average finished up 217.08 points or 0.9%, at 25,812.88, the S&P 500 rose 1.5% to 3,100.29, and the Nasdaq Composite climbed 1.9% to 10,058.77 as data showed a recovery in consumer confidence and higher home prices, helping to offset ongoing concerns about the rising number of new coronavirus cases in many American states. In European equities, the Stoxx Europe 600 index closed 0.1% higher and London’s FTSE 100 fell 0.9%.

Back home, the FBM KLCI closed 6.54 points or 0.44% higher at 1,500.97, partly helped by share price gains in rubber glove manufacturers, amid news of resurgence in global Covid-19 cases. In Asian markets, the Japanese Nikkei gained 1.3%, Hong Kong’s Hang Seng picked up 0.5%, while South Korea’s Kospi climbed 0.7%. China’s CSI 300 rallied 1.3%, while the Shanghai Composite Index advanced 0.8%.

Source: PublicInvest Research - 1 Jul 2020

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