PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 24 Nov 2020, 10:34 AM


PublicInvest Research Headlines - 23 Jul 2020

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US: Existing home sales rebound at record pace in June. After reporting three straight months of declines in US existing home sales, the National Association of Realtors released a report showing sales rebounded at a record pace in June. NAR said existing home sales spiked by 20.7% to an annual rate of 4.72m in June after plunging by 9.7% to a rate of 3.91m in May. Economists had expected sales to skyrocket by about 24.5%. He added, "This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue." Despite the substantial monthly rebound, NAR noted existing home sales in June were down by 11.3% YoY. (RTT)

US: Small-business loans saved as many as 3.2m jobs. Hundreds of billions of dollars in government loans to small businesses helped save between 1.4m and 3.2m jobs during the coronavirus pandemic, according to a new study by Massachusetts Institute of Technology and Federal Reserve researchers. The Paycheck Protection Program boosted employment by 2% to 4.5%, economists wrote in the study. The research suggests that providing money directly to companies helped curb job losses during the pandemic, though employment remains about 15m below pre-virus levels. (Bloomberg)

China: Central bank to pause easing as economy recovers, wary of over-stimulus – sources. China's central bank does not see an immediate need to ease monetary policy further, but will keep conditions accommodative to support a recovery in the world's second-largest economy, four policy sources told. A stronger-than expected rebound in activity in 2Q20 has reduced the urgency for the PBOC to act, after policymakers announced unprecedented emergency measures early in the year to deal with the shock from the coronavirus crisis. The PBOC also wants to avoid the side effects caused by excessive stimulus, such as a surge in debt and risks of bubbles in the property market, said the sources, who are involved in internal policy discussions. (Reuters)

Japan: Manufacturing PMI climbs to 42.6 in July – Jibun Bank. The manufacturing sector in Japan continued to contract in July, albeit at a slightly slower pace, the latest survey from Jibun Bank revealed with a manufacturing PMI score of 42.6. That's up from 40.1 in June, although it remains well beneath the boom-or-bust line of 50 that separates expansion from contraction. Individually, production and new orders continued to fall at substantial rates, albeit slower than in June. The rate of decline in employment accelerated further and was marked overall. The data also showed that the services PMI ticked up to 45.2 from 45.0 last month, while the composite index improved to 43.9 from 40.8. (RTT)

Japan: Govt raises economic assessment for second month. Japan's government lifted its economic view for the second straight month as activity showed movements of picking up. However, attention should be given to the risk that domestic and overseas infections would affect economies. Upgrading view on shipments, the government said exports are bottoming out, although the influence of the infectious disease remains. The office also raised its view on private consumption and industrial production. The government observed that private consumption is picking up recently and industrial production showed signs of picking up recently in some sectors, although it is decreasing as a whole. (RTT)

Australia: RBA Chief says unemployment rate to rise further. Australia's unemployment rate is set to rise further, even with the recovery underway, Reserve Bank of Australia Governor Philip Lowe said. This is because many of the people who lost their jobs over recent times have been classified as not in the labor force and so are not counted as unemployed, he noted. As the labour market continues to improve, many of these people will start looking for jobs, and thus be classified as rejoining the labor force. This will push up the measured unemployment rate, Lowe observed. Although the labor market has turned the corner, the path ahead is expected to be bumpy and there are some major cross-currents in the labor market at the moment, he said. (RTT)


Careplus: To acquire Centro Heights, convert properties into workers’ hostel . Careplus Group and Tang Kin San have entered into a conditional share acquisition agreement with Chang Keng Chiang, Chang Sze Wei and Chang Kai Ping (the vendors) to acquire 100% of Centro Heights SB for RM3.8m in total. At present, Centro owns Hotel One Garden in Seremban and the purchasers intend to convert the hotel into a hostel. As such, the intended business for Centro is to manage its properties as workers’ hostels for Careplus’ workers. “The proposed acquisition will allow Careplus to convert the hotel property and shoplot to be used as Careplus’ workers’ hostel. (The SunDaily)

Bioalpha: Bags RM2.1bn five-year contract to supply health food products to China. Bioalpha Holdings has secured a five year contract worth CNY3.5bn (RM2.1bn) to supply ingredients for health food and nutritional meals to private and public sectors in China. The contract, which is subject to annual renewal, is expected to contribute CNY700m (RM426.7m) to the group's revenue per year, with the first batch of supply to kick off in September. (The Edge)

Peterlabs Holdings: Ventures into consumer goods distribution . Peterlabs Holdings (PHB) said it is venturing into distribution of consumer goods, through the acquisition of a 60% stake in Thye on Tong Trading SB. The RM10.8m purchase consideration for the stake will be satisfied via a cash payment of RM3m and the issuance of 39m new PHB shares at 20 sen per share. (The Edge)

Xidelang: Plans par value reduction, ESOS. Xidelang Holdings is proposing a par value reduction by cancelling 3.9 US cents out of the par value of every existing share of 4 US cents each, to facilitate the implementation of an employees' share option scheme. (The Edge)

Pestech: To launch Cambodia unit IPO on Monday. Pestech International is set to launch the initial public offering (IPO) of its unit in Cambodia on Monday, July 27. The company said the IPO for Pestech Cambodia Plc (PCL) has been approved by Securities & Exchange Commission of Cambodia. The listing involved a public offering of 3.945m new PCL shares at KHR3,120 each. (The Star)

Alam Maritim: Bags RM9.9m underwater services work order . Alam Maritim Resources has won an RM9.9 m work order for underwater services from IPC Malaysia BV. The contract was secured by Alam Maritim’s wholly-owned subsidiary Alam Maritim (M) SB for works related to FPSO Bertam underwater inspection in lieu of dry-docking activities, the group said. This marks the fourth work order announced by Alam Maritim year to date, amounting to about RM69m in total. (The Edge)

Microlink: Partners Scicom to bid for e-government solution jobs. Microlink Solutions is partnering Scicom (MSC) to collectively bid for e-government solution jobs. Microlink said it has inked a JV agreement with Scicom to take up a 50% stake in Scicom's wholly owned Asian Contact Solutions SB for RM5,000, which it will finance with internal funds. The core business of the (JV company is the provision of e-government solutions and services which include the design, development, implementation, operation and maintenance of software and the provision of associated support services. (The Edge)

Market Update

  • The FBM KLCI might open higher today after US stocks closed higher Wednesday ahead of corporate results from Tesla and Microsoft, but with buying seen in utilities and other sectors viewed as defensive as Sino-American tensions rise. Market participants also remain concerned about the status of Congressional negotiations on another financial aid package for businesses and individuals coping with the economic damage wrought by the coronavirus pandemic. The Dow Jones Industrial Average jumped 165.44 points, or 0.6%, to end at 27,005.84. The S&P 500 gained 18.72 points, or 0.6%, to close at 3,276.02, its fourth straight day of gains. The Nasdaq Composite Index added 25.76 points, or 0.2%, finishing at 10,706.13, after trading in negative territory earlier in the session. In Europe, the Stoxx 600 Europe index ended 0.9% lower, while the UK’s FTSE finished 1% lower.

    Back home, the FBM KLCI closed 8.95 points or 0.56% lower at 1,586.98, as world equities took cue from the US-China spat. In the region, the Nikkei closed 0.6% lower, while China’s CSI 300 gauge added 0.5%. South Korea’s Kospi finished in negative territory but virtually unchanged; and Hong Kong’s Hang Seng index tumbled 2.3%.

Source: PublicInvest Research - 23 Jul 2020

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