PublicInvest Research

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


PublicInvest Research Headlines - 2 Jul 2020

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Global: Manufacturing slump eases as world emerges from pandemic. A slump in global manufacturing showed signs of easing in June as a rebound in Chinese and US activity offered some hope the world’s two largest economies may have passed the worst of the devastation caused by the novel coronavirus pandemic, while the collapse in European factory activity abated. But sluggish global demand, the worsening US outbreak and fears of a second wave of infections elsewhere will tame any optimism on the outlook and keep pressure on policymakers to support their ailing economies. The IMF expected the global economy to shrink 4.9% this year and rebound just 5.4% next year. (Reuters)

US: Manufacturing activity hits 14-month high. US manufacturing activity rebounded in June, hitting its highest level in more than a year as the broader economy reopened, but rising Covid-19 infections threaten the recovery. The ISM said on Wednesday its index of national factory activity jumped to a reading of 52.6 last month from 43.1 in May. That was the strongest since April 2019 and ended three straight months of contraction. A reading above 50 indicates growth in manufacturing, which accounts for 11% of the US economy. Economists polled by Reuters had forecast the index rising to 49.5 in June. (Reuters)

US: Construction spending unexpectedly tumbles 2.1% in May. Construction spending in the US unexpectedly saw a continued decrease in the month of May, according to a report released by the Commerce Department on Wednesday. The Commerce Department said construction spending tumbled by 2.1% to an annual rate of USD1.35trn in May after plunging by 3.5% to a revised rate of USD1.38trn in April. The continued decrease came as a surprise to economists, who had expected construction spending to climb by 1.0% compared to the 2.9% slump originally reported for the previous month. (RTT)

US: Private jobs report shows strong growth in June, substantial upward revision to May. A report released by payroll processor ADP on Wednesday showed a significant increase in private sector employment in the month of June as well as a substantial upward revision to the data for May. ADP said private sector employment jumped by 2.36m jobs in June, which was below economist estimates for a spike of about 3m jobs. However, revised data showed private sector employment soared by 3.06m jobs in May compared to the previously reported loss of 2.76m jobs. (RTT)

EU: Italy's manufacturing sector contracts at slower pace. Italy's manufacturing sector contracted at a slower pace in June amid looser lockdown restrictions, survey data from IHS Markit showed Wednesday. The factory PMI advanced to 47.5 in June from 45.4 in May. However, the score signaled a twenty-first successive deterioration in the health of the manufacturing sector. The softer deterioration was driven by the first increase in output for nearly two years. At the same time, order book volumes were down as has been the case in each month since August 2018. Reflecting weak sales, workforce numbers fell again, extending the current sequence of reduction to over a year. (RTT)

EU: German unemployment increases less than expected. Despite the coronavirus pandemic weighing on the German economic activity, unemployment increased less than expected in June, helped by the short-time work program. Data from the Federal Employment Agency revealed that the number of unemployed persons rose by 69,000 in June from previous month, which was much less than economists' forecast of 120,000. In May, the number of people out of work had increased by 237,000. The unemployment rate rose to 6.4% in June from 6.3% a month ago. The rate was expected to climb to 6.6%. "The labor market remains under pressure due to the corona pandemic," Federal Employment Agency CEO Detlef Scheele said. (RTT)

China: Factory activity expands, but job losses quicken amid weak exports - Caixin PMI. China’s factory activity grew at a faster clip in June after the government lifted coronavirus lockdown measures and ramped up support steps, but the health crisis continues to pressure exports and jobs, a private business survey showed on Wednesday. The Caixin/Markit Manufacturing PMI rose to 51.2 last month, the fastest pace of growth since Dec, and up from May’s 50.7. Analysts polled by Reuters had expected a reading of 50.5. China’s economy is gradually emerging from a sharp 6.8% contraction in the 1Q, with much of the country reopened after weeks of disruptions early in the year due to strict lockdown measures. But demand remained subdued, as many manufacturers are still struggling with reduced or cancelled overseas orders amid faltering global demand. (Reuters)

Japan: Consumer confidence improves in June. Japan's consumer confidence improved for the second straight month in June, data from the Cabinet Office showed on Wednesday. On a seasonally adjusted basis, the consumer confidence index increased to 28.4 in June from 24.0 in May. Among the four sub indexes of the consumer confidence index, the index reflecting households' willingness to buy durable consumer goods rose to 30.8 in June, and the index for overall livelihood increased to 30.4. The indicators measuring the income growth increased to 31.4 and employment grew to 20.9. The latest survey was conducted on June 15 among 8,400 households. (RTT)

India: Manufacturing downturn slows in June. India's manufacturing conditions weakened in June with regional lockdown extensions, but the pace of contraction slowed further, survey results from IHS Markit showed on Wednesday. The headline IHS Markit manufacturing PMI, increased to 47.2 in June from 30.8 in May. Any reading below 50 indicates contraction in the sector. The manufacturing sector declined for the third consecutive month. Output contracted sharply in June and sales fell for the third straight month, albeit at a slower pace since the introduction of lockdown measures in March. New export orders fell for the fourth month in a row. (RTT)


MyEG: Secures Immigration Dept contract extension worth RM208m. MyEG Services has been awarded with the extension of Immigration Related Services by the Ministry of Home Affairs for a period of three years, estimated to be worth RM208m. it said the services are in relation to the provision of online renewal of temporary employment pass for foreign workers for the Immigration Department of Malaysia. However, it said the terms of renewal are not stated in the letter and an agreement to formalise the extension would be signed and announced in due course. (The Sun Daily)

WZ Satu: Bags RM120m EPCIC contract. WZ Satu accepted a RM120m contract from Petronas Carigali SB for the provision of engineering, procurement, construction, installation & commissioning (EPCIC) of PM 309 Gas Ledang Redev Segment 2 (Ledang S2) Development Project. It is also the consortium leader under a consortium with UMD Energy SB. (The Sun Daily)

Prestar: Bags RM80m contract for Pan Borneo Highway. Prestar has secured RM80m contracts to supply guardrails and accessories for the Pan Borneo Highway in Sarawak. Prestar had signed two supply agreements with Pansar’s unit. It was also awarded the contracts by LTC West Gate SB and Kemakmuran 2000 SB to supply and deliver guardrails and accessories for the highway. Prestar will supply guardrails and accessories to four work packages for the highway project. (StarBiz)

Solarvest: Bags RM30m solar power contract from Go Energy for UiTM campuses. Solarvest has secured a RM30m contract from Go Energy SB to develop and operate solar photovoltaic systems and all associated infrastructure across six UiTM campuses nationwide. The contract was awarded to a consortium, which is 90% owned Solarvest, and 10% by GFM Services, provide engineering, procurement, construction and commissioning services of solar PV systems across the six UiTM campuses, with a cumulative plant capacity of circa 11.1 megawatt peak. (The Sun Daily)

BHIC: Unit gets one-year extension to Mindef helicopter maintenance contract. Boustead Heavy Industries Corp (BHIC) has seen its helicopter maintenance contract with the Ministry of Defence (Mindef) extended until 2021. Its unit received a letter from Mindef for a one-year extension to provide integrated maintenance and logistic support services for three Dauphin AS365N3 helicopters operated by the Malaysian Maritime Enforcement Agency. (The Edge)

Kanger: To distribute antimicrobial coating solutions locally and overseas . Kanger is collaborating with Stoika SB to distribute long-lasting commercial antimicrobial coating solutions in Malaysia and overseas. Kanger signed a sub-distributor appointment agreement with Stoika for distribution in the Malaysian market, and also formed a JV collaboration with the latter to distribute the solutions abroad. “Kanger and Stoika will hold 51% and 49% equity stakes in the JV company, respectively. While Kanger will be a subdistributor for the Malaysian market, the JV company will endeavour to act as a main distributor in other countries,” it said. (The Edge)

Market Update

The FBM KLCI might open flat today as the Dow finished lower Wednesday, but the tech-heavy Nasdaq was vaulted to a fresh record close, giving the year’s second half a mixed start as investors focused on signs of economic recovery from the coronavirus crisis and a new Fed promise for clarity on the path of rates. Improving data on employment and the manufacturing sector helped buttress markets in the first trading day of July, even while nearly a dozen American states have hit pause or halted plans to allow more businesses to reopen. The Dow Jones Industrial Average fell 77.91 points, or 0.3%, to end at 25,734.97, snapping a two-day win streak. The S&P 500 added 15.57 points, or 0.5%, to close at 3,115.86. The Nasdaq Composite rose 95.86 points, or 1%, closing at a record 10,154.63. In European equities, the Stoxx Europe 600 index closed up 0.2% and London’s FTSE 100 retreated to end 0.2% lower.

Back home, the FBM KLCI closed up 13.46 points or 0.9% at 1,514.43, helped by a confluence of factors including share price gains for rubber glove manufacturers and higher crude oil prices. In regional markets, the Japanese Nikkei declined 0.8%, while South Korea’s Kospi finished the session 0.1% lower. China’s CSI 300 rallied 2%, while the Shanghai Composite Index advanced 1.4%.

Source: PublicInvest Research - 2 Jul 2020

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