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PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 25 Nov 2020, 10:24 AM

 

PublicInvest Research Headlines - 24 Jul 2020

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Economy

US: Weekly jobless claims unexpectedly rise as labour market takes step back. The number of Americans filing for unemployment benefits unexpectedly rose last week for the first time in nearly four months, suggesting the labour market was stalling amid a resurgence in new Covid-19 cases and depressed demand. The weekly jobless claims report from the Labor Department also showed nearly 32m people were collecting unemployment checks in early July. Relentless labour market weakness puts pressure on the US Congress to extend a USD600 weekly jobless benefit supplement, which expires on July 31. "There is no gradual and uneven recovery for the labour market," said Chris Rupkey, chief economist at MUFG in New York. "Washington policymakers looking for signs that additional stimulus is necessary can judge for themselves with the millions and millions of jobless workers getting unemployment benefits. The economy cannot carry on for long, if it has to drag almost 32m unemployed workers with it. (Reuters)

US: Leading economic index extends rebound in June. Reflecting improvements brought about by the incremental reopening of the economy, the Conference Board released a report showing another significant increase by its reading on leading US economic indicators in the month of June. The Conference Board said its leading economic index jumped by 2.0% in June after soaring by an upwardly revised 3.2% in May and plunging by 6.3% in April. Economists had expected the index to surge up by 2.5% in June compared to the 2.8% spike originally reported for the previous month. Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board, noted labor market conditions and stock prices made particularly strong positive contributions. (RTT)

EU: Consumer confidence unexpectedly weakens in July . Eurozone consumer confidence deteriorated slightly in July, defying expectations for further strengthening, preliminary survey data from the European Commission showed. The flash consumer confidence indicator for euro area fell to -15 from -14.7 in June. Economists had forecast an improvement to -12. The reading had improved strongly in May and June after plummeting in March and April due to the impact of the coronavirus, or Covid-19, pandemic. For the EU, the flash consumer confidence index showed a reading of -15.6, which was unchanged from June. In May, the score was -19.5. Both indicators remain well below their long-term averages of -11.1 and - 10.5, respectively, the commission said. (RTT)

UK: German Gfk consumer confidence to strengthen in August. German consumer confidence is set to continue strengthening into August from the weaker level caused by the coronavirus pandemic, as the reduction in the value-added tax boosted the propensity to buy, survey data from market research group GfK showed. The forward-looking consumer sentiment index rose to -0.3 points from revised -9.4 in July. The expected reading was -5.0. The consumer climate has risen significantly for the third consecutive period. Gfk said German consumers are gradually putting the coronavirus shock of earlier this year behind them. (RTT)

UK: Manufacturers expect output to recover in months ahead – CBI. British manufacturers expect output to begin recovery in months ahead for the first time since the Covid-19 crisis hit the economy, the quarterly Industrial Trends Survey from the Confederation of British Industry showed. A balance of manufacturers forecasting output to recover in the next quarter came in at +15%, the first increase since February 2020. According to the survey, the output volumes declined in the quarter to July, with the balance falling to -59% from -57% in June. (RTT)

Singapore: Consumer prices decline slows in June. Singapore's consumer prices declined at a softer rate in June, data from the Monetary Authority of Singapore and the Ministry of Trade and Industry revealed. The consumer price index fell 0.5% YoY in June, following a 0.8% decrease in May. Economists had expected a 0.6% decline. This fall in the CPI was largely due to a smaller decline in private transport costs. MAS core CPI, which excludes the costs of accommodation and private road transport, fell 0.2% annually in June, same as in the preceding month. (RTT)

Markets

Prestariang: Seeks to raise RM35m through one-for-three rights issue . Prestariang announced another cash call. It is planning to raise a further RM35.37m via a renounceable rights issue of ordinary shares with free detachable warrants. The rights issue will involve up to 176.84m new shares at an issue price of 20 sen per rights share, on the basis of one rights share for every three Prestariang shares held. The rights issue will come with free detachable warrants, on the basis of one warrant for every one rights share subscribed. (The Edge)

MTouche: To raise up to RM18m via private placement for media platform development . MTouche Technology has proposed a private placement to raise up to RM18.06m for the development of a new over the top media platform. Up to 777.6m shares or 30% of the group's issued share capital will be issued to independent third-party investors to be identified later. (The Edge)

Opcom: Secures RM21.4m contract from TM. Opcom Holdings' 70%-owned subsidiary, Opcom Cables SB, has secured a RM21.37m contract from Telekom Malaysia Bhd (TM) for the manufacture, supply and delivery of optical fibre cables. The company said the award was valid from Aug 1, 2020 until May 20, 2022, and expected to contribute positively towards the group's earnings and net assets for the period. (Bernama)

Nexgram: Partners Indonesian firm to sell PPE in Indonesia . Nexgram Holdings subsidiary has partnered with Indonesian firm PT Mitra Abadi Propertindo Utama (MAPU) to distribute personal protection equipment (PPE) in Indonesia. Nexgram said its wholly-owned Nexgram Biomedic SB (NBSB) has inked a conditional offtake and purchase agreement with MAPU, under which NBSB will sell PPE — including AAMI isolation gowns powder-free nitrile examination gloves — to MAPU that MAPU will promote, market and distribute in Indonesia. Under the agreement, NBSB will sell 2m pieces of the isolation gowns and 500,000 boxes of gloves to MAPU every month, starting from November 2020 until October 2021. There is also an option to extend the deal for another 24 months on mutual agreement of both parties. (The Edge)

Rubberex: Offer not fair, not reasonable, says independent adviser. Rubberex Corp (M) have been advised to reject the takeover offer from chemical firm Hextar Global's ED Datuk Ong Choo Meng and his 90%-held Hextar Rubber SB for the remaining Rubberex shares at RM1.80 apiece. Its independent adviser MainStreet Advisers SB said the offer was “not fair and not reasonable”. (The Edge)

Vivocom: Plans 10-to-1 share consolidation . Vivocom International Holdings is planning to consolidate every 10 shares in the ACE Market-listed construction firm into one new share. (The Edge)

Willowglen: Gets RM8.5m contract from TNB . Willowglen Msc has been awarded a contract worth RM8.5m from Tenaga Nasional Bhd for the supply, installation and testing of field terminal units for its distribution automation project. The contract commenced on July 22 and is expected to be completed by Jan 20, 2024, the technology solutions provider said in a filing. (The Edge)

Market Update

  • The FBM KLCI might open lower today as US stocks ended Thursday sharply, with technology giants Apple and Microsoft at the vanguard of a selloff in large-capitalization stocks. The tech duo’s decline accounted for more than half of the Dow’s losses, with investors parsing weak data on employment and growing concerns that another Congressional financial aid package for businesses and pandemic-stricken households may be held up by political wrangling. The Dow Jones Industrial Average closed 353.51 points lower, 1.3%, at 26,652.33, while the S&P 500 index finished off 40.36 points, or 1.2%, at 3,235.66. The technology heavy Nasdaq Composite Index lost 244.71 points, or 2.3%, to reach 10,461.42. In Europe trading was muted, with the Stoxx 600 Europe index finishing fractionally higher, and while the UK’s FTSE closing with a slight 0.1% gain.

    Back home, the FBM KLCI closed up 19.44 points or 1.23% at 1,606.42 while trade volume across Bursa Malaysia rose past 12bn securities again this week as the rubber glove- and healthcare-related sectors continued to be a major theme in the local equities market due to the Covid-19 pandemic. In Asia, the Nikkei closed 0.6% lower, at 22,751.61, while China’s CSI 300 gauge was virtually unchanged at 4,712.44. Hong Kong’s Hang Seng index rose 0.8% to close at 25,263

Source: PublicInvest Research - 24 Jul 2020

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