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PublicInvest Research

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

 

PublicInvest Research Headlines - 16 Jul 2020

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Economy

US: Industrial production spikes more than expected in June. Industrial production in the US spiked by even more than anticipated in the month of June, according to a report released by the Federal Reserve. The report said industrial production soared by 5.4% in June after jumping by 1.4% in May. Economists had expected production to surge up by 4.3%. Despite the substantial increase, the Fed noted industrial production remained 10.9% below its pre-pandemic February level. The central bank also said industrial production for the second quarter as a whole plunged by an annual 42.6%, reflecting the largest quarterly decrease since the industrial sector retrenched after World War II. (RTT)

US: Import prices surge up 1.4% in June as fuel prices continue to skyrocket. With fuel prices continuing to skyrocket, the Labor Department released a report showing US import prices surged up by more than expected in the month of June. The report said import prices shot up by 1.4% in June after climbing by a downwardly revised 0.8% in May. Economists had expected import prices to jump by 1.0%, matching the increase originally reported for the previous month. Fuel import prices led the way higher once again, soaring by 21.9% in June after spiking by 15.4% in May. Higher prices for both petroleum and natural gas contributed to the jump, which reflected the biggest increase since the index was first published monthly in September 1992. (RTT)

UK: Inflation rises unexpectedly in June. UK consumer price inflation increased unexpectedly in June driven by games and clothing cost, data from the Office for National Statistics showed. Consumer price inflation rose to 0.6% from a four-year low of 0.5% in May. The rate was expected to slow to 0.4%. Nonetheless, inflation continues to remain well below the central bank's 2% target. Confounding expectations for a decline of 0.2%, consumer prices gained 0.1% on a monthly basis after remaining unchanged in May. Meanwhile, excluding energy, food, alcoholic beverages and tobacco, core inflation advanced to 1.4% from 1.2% in May. The rate was forecast to remain unchanged at 1.2%. Prices for games and clothing provided upward contributions to inflation, while food prices eased in June. (RTT)

UK: Financial job vacancies shrink by 60% in second quarter – data. The volume of UK financial sector job vacancies dropped by 60% in the quarter to end-June, data showed, as the Covid-19 pandemic inflicted fresh injury to a labour market already reeling from restructuring and Brexit. The latest Morgan McKinley Spring London Employment Monitor, which details hiring trends across Britain's financial industry, showed the number of job-seekers fell by almost a third in the three month period from April, with available jobs plunging by 72% YoY in that month alone. The latest figures follow a rapid slowdown in hiring seen in March, when the number of available jobs dropped by 38% compared with Feb. The early part of the April-June quarter was dominated by government imposed lockdowns to stem the novel coronavirus outbreak and there were tentative signs of job market activity resuming towards the end of the period. (Reuters)

Japan: BoJ keeps policy unchanged, sees sharp downturn in FY21. The BoJ maintained its massive monetary policy stimulus as the economy is expected to contract more sharply in the current financial year due to the challenges posed by the novel coronavirus. The Policy Board of the BoJ voted 8-1 to retain the interest rate at - 0.1% on current accounts that financial institutions maintain at the central bank. The bank will continue to purchase necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around 0%. The bank will actively buy exchange-traded funds and Japan real estate investment trusts so that their outstanding amounts will increase at annual paces with the upper limit of about JPY12trn and JPY180bn, respectively. As for CP and corporate bonds, the bank will maintain their outstanding amounts at JPY2trn and JPY3trn, respectively. (RTT)

Singapore: Home sales more than double as strict lockdown eased. Singapore home sales more than doubled in June as buyers flocked back to the market following the end of a two-month lockdown. The number of new units sold rose to 998 last month from 487 in May, according to Urban Redevelopment Authority data released. That’s the most since November and up from a near six year low of just 277 in April. First-home buyers taking advantage of a drop in prices and workers in sectors that have not felt the pain of the pandemic-induced recession, such as technology and the civil service, are underpinning demand, said APAC Realty Ltd. “Developers are also looking to launch more developments,” which had been put on hold during the lockdown, Mak said. “Pent up supply is meeting pent up demand.” (Bloomberg)

Markets

Econpile: Bags RM21.4m contract for Mont'Kiara condo. Econpile has bagged a RM21.4m contract from Allevia SB. The group said the contract comprises earthworks, piling, pile caps, substructure, elevated road and earthing system works for a development with a 44 and a 40 storey condominium blocks, basement and podium car parks and recreation facilities at Jalan Kiara 4, Batu district, Kuala Lumpur. The overall duration of the contract is approximately 14 months and work is expected to commence in July 2020. (The Edge)

MGB: Bags piling and building works worth RM215m . MGB has secured a RM215m contract from its major shareholder LBS Bina Group's subsidiary to deliver the piling and building works for a housing development project in Kuala Selangor. The housing project consists of 901 units of double-storey terrace house and 250 units of double-storey townhouses. MGB said the construction and completion of the contract will take 30 months and is scheduled to commence in Oct 2020. (The Edge)

Gagasan Nadi: Secures RM40m affordable housing project in Serendah. Gagasan Nadi Cergas has secured a RM40m contract to construct affordably-priced homes in Serendah, Selangor. The construction company entered into a development rights agreement (DRA) with Menteri Besar Selangor (Pemerbadanan) (MBI) to build 148 units of affordable-priced homes that has a gdv of RM60.8m. The project comprises 108 units of affordably-priced terrace houses and 40 units of townhouses under the Rumah Selangorku programme. (NST)

Ni Hsin: Aborts plan to acquire stake in O&G services firm . Ni Hsin Resources has aborted its plan to acquire a 22.73% stake in Seamog Group SB through a share subscription agreement entered into by both companies on Feb 13. This is in view of the adverse global economic condition coupled with the Covid-19 pandemic, which the group said is untenable for both parties to proceed with the plan. (The Edge)

MQTech: Partners with HK company to acquire medical rubber glove factory. MQ Technology (MQTech) has teamed up with Hong Kong-based JD Resources International Ltd to potentially buy a medical rubber gloves company. MQTech, through wholly-owned Microlead Manufacturing SB (MMSB), inked a JV agreement with JD Resources on the prospect. Under the JV, both parties would explore the potential to buy a company involved in the manufacturing and marketing of gloves. MQTech and JD would form a 30:70 JV company. (NST)

Ancom: To restructure, see entry of immigration tech company S5 . Ancom, Ancom Logistics and Nylex (Malaysia) will undergo a restructuring exercise that will see the logistics business move to Nylex and the entry of immigration technology company S5 Holdings Inc into Ancom Logistics. The group wants to put the logistics assets under one roof. Following this, the entire supply chain will be complete.

Zhulian: 2Q net profit falls 42%, declares three sen dividend . Zhulian Corp’s quarterly net profit contracted 42% for the 2QFY20 to RM11.39m, from a year earlier dragged by lower sales. Notably, its operating profit for the quarter stood at RM10.36m, down 41% from the previous corresponding quarter. The group still declared a second interim dividend of three sen per share totalling RM13.8m in respect of the FYE20. (The Edge)

Market Update

The FBM KLCI might open higher today as US stock indices closed modestly higher on Wednesday, as investors focused on COVID-19 vaccine hopes and early signs of an upswing in business activity during the pandemic. Investors also bid equities higher as the first few corporate earnings reports for the second quarter have come in better than expected, even as the number of coronavirus cases rise in many US states. The Dow Jones Industrial Average advanced 227.44 points, or 0.9%, to end at 26,870.03, after briefly rising as high as 27,071.33 at the start of the session. The S&P 500 index rose 29.04 points, or 0.9%, to close at 3,226.56, or 0.1% away from erasing its year-to-date losses. The Nasdaq Composite finished 61.91 points higher, or 0.6%, at 10,550.49. In Europe, the pan-European Stoxx 600 Europe Index settled 1.8% higher, while London’s FTSE 100 was up 1.8%.

Back home, the FBM KLCI finished down at its intraday low after falling 13.19 points or 0.83% to 1,585.56 while Bursa Malaysia small market capitalisation (small cap) index rose more than 1% as Covid-19 vaccine hopes spurred world stock markets. In the region, the Shanghai Composite fell 1.6% to end at 3,361.30, while the CSI 300 Index fell 1.3%. Japan’s Nikkei 225 Index added 1.6%, while the Hang Seng Index in Hong Kong eked out a gain of 3.69 points to close at 25,481.58.

Source: PublicInvest Research - 16 Jul 2020

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