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PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 2 Dec 2020, 9:34 AM

 

PublicInvest Research Headlines - 25 Aug 2020

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Economy

  • US, China: US-China tensions visible in CNY trend. Market indicators are showing caution over the CNY, despite China leading the global recovery and the yuan’s favorable interest-rate differential vis-à-vis the dollar. The yuan’s appreciation against the dollar has been smaller than major currencies and emerging market currencies, while the forward market has been showing increased bets on its depreciation. Such misalignment against China’s broader economic trend may reflect a price-in of risks from escalating USChina tensions. (Bloomberg)
  • UK: sunak faces tough choices on job furlough program. Rishi Sunak’s tenure as UK Chancellor of the Exchequer is reaching a defining moment as he decides whether millions of workers living off government aid should soon begin fending for themselves in a crippled economy. In just over two months, his furlough plan that pays up to 80% of an employee’s salary will finish. Sunak has dismissed mounting pressure to extend the program, whose cost is about GBP35bn (USD46bn), albeit rising more slowly than before. (Bloomberg)
  • Singapore: CPI remains in the red in July, with core inflation falling to lowest in decade. Singapore’s core and headline inflation remained in the red in July 2020, despite the Phase Two measures which allowed most businesses to resume activities from June 19. Core inflation – a key metric used by the central bank to develop Singapore’s monetary policy based on price increments to sectors other than accommodation and private transport – touched its lowest point in more than a decade with a 0.4% contraction. (The Edge)
  • Korea: Bank of Korea under pressure to buy more bonds after Covid spike. Bond analysts see pressure rising on the Bank of Korea to signal increased debt purchases at its policy meeting this week as a renewed surge in coronavirus cases pushes yields higher. After being lauded for its success in containing the virus earlier this year, South Korea is now warning of a “massive nationwide outbreak.” This and damage from recent torrential rains have added to expectations for a further boost in government debt sales to fund stimulus, pushing 10-year yields up about 8 basis points this month. (Bloomberg)
  • Australia: Recession will extend into Third Quarter, CBA Says. Australia’s recession will extend into a third quarter, making it the longest slump since 1982-83, and unemployment remain elevated next year due to a tepid recovery, according to Commonwealth Bank of Australia. It predicts GDP will fall 0.7% in the current quarter after declining 6% in the prior period; the economy contracted 0.3% in the first three months of the year. Australia’s jobless rate is forecast to peak at 9% in the final months of this year and then average 8.8% through 2021, the bank said. (Bloomberg)
  • Thailand: Exports fall less than expected in July. Thailand's exports declined less than expected in July, data from commerce ministry revealed. Exports were down 11.37% on a yearly basis to USD18.8bn. Shipments were expected fall 17.8% in July. At the same time, imports logged a sharp decrease of 26.38% compared to economists' forecast of 23.2% drop. (RTT)

Markets

  • Fajarbaru: Secures RM108m high-rise development contract from Malton. Fajarbaru Bulider Group has secured a RM108m contract from Malton to develop the second phase of the Duta Park Residences high-rise residential project along Jalan Kuching. The two-year contract is for the second phase of the project, the group said. The first phase, awarded in June last year, was worth RM297.5m. (The Edge)
  • Ho Hup: Lands RM137m contract under KVDT project. Ho Hup Construction Co has bagged a RM137m contract for upgrading works under phase two of the Klang Valley Double Track (KVDT) project. The group said the three-year contract, awarded by Dhaya Maju Infrastructure (Asia) SB, entails the design, construction and maintenance of the proposed upgrading of Keretapi Tanah Melayu's stations and facilities. (The Edge)
  • PetChem: To build plant at Pengerang complex with LG Chem. Petronas Chemicals Group (PCG) has entered into a strategic partnership with LG Chem Ltd to build a nitrile butadiene latex manufacturing plant at Pengerang Integrated Complex (PIC) in Johor. Construction of the plant will begin in 2021 while production is scheduled to start in 2023. "When completed, the plant will have an annual NBL production capacity of 200,000 tonnes," it said. (Business Times)
  • Tan Chong: Granted stay on RM180.1m tax claim, leave application hearing set for Nov. Tan Chong Motor Holdings said the Shah Alam High Court has granted an interim stay of the RM180.1m excise duty claim by the Customs Department until Sept 3. The interim stay also covers all further proceedings, said Tan Chong. "The interim stay is to be renewed upon its expiry," it added. (The Edge)
  • Asia Poly: Plans private placement to raise up to RM76m. Asia Poly Holdings plans to raise up to RM76.4m, almost 30 % of its current market capitalisation of RM278.7m, through a private placement of up to 20% of its issued shares, mainly for funding its future investments. The issue price of the placement shares will be determined at a later date after receipt of all relevant approvals, the group said. The group expects the private placement to be completed by the 4Q of this year. (The Edge)
  • Revenue Group: To provide e-wallet at Caltex. Revenue Group has teamed up with Chevron Malaysia Ltd to provide electronic wallet (e-wallet) services at all Caltex petrol stations nationwide. Chevron Malaysia owns and markets the retail brand Caltex in the country. Revenue said the partnership would see it deploy smart digital payment terminals at more than 420 Caltex petrol stations, which will accept local e-wallet payments from Touch 'n Go eWallet, Boost and GrabPay. (Business Times)
  • MMC: Posts higher net profit in 2Q, revenue down 20%. MMC Corp's net profit increased 15% to RM77.4m in the 2QFY20 from RM67.2m a year ago. MMC said the increase was mainly due to higher volume handled at Port of Tanjung Pelepas (PTP) as well as higher contribution from Johor Port and higher share of results of associated company Malakoff Corp. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after the S&P 500 and Nasdaq Composite clinched fresh closing and intraday records on Monday, as hopes for a potential COVID-19 treatment bolstered trading for more growth-sensitive sectors that have lagged the rest of the market. The Dow Jones Industrial Average surged 378.13 points, or 1.4%, to end at 28,308.46, finishing above 28,000 for the first time in six months and only 4.2% away from its Feb. 12 record closing high. The S&P 500 gained 34.12 points, or 1%, closing at a record 3,431.28, near its fresh intraday record. The Nasdaq Composite rose 67.92 points, or 0.6%, ending at a record 11,379.72, following its intraday all-time high at 11,462,05. The Stoxx Europe 600 jumped to close up 1.6% and U.K.’s FTSE benchmark advanced 1.7%, getting a boost after the FDA announcement.

Back home, the FBM KLCI underperformed the broader market to close 8.54 points or 0.54% lower, mainly dragged by Petronas Chemicals Group Bhd (PetChem) and banking stocks. In the region, China’s CSI 300 rose 0.8%, the Shanghai Composite ended 0.2% higher, and Japan’s Nikkei closed with a gain of 0.3%.

Source: PublicInvest Research - 25 Aug 2020

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