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PublicInvest Research

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

 

PublicInvest Research Headlines - 3 Sept 2020

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Economy

US: Factory orders continue to skyrocket in July. New orders for US manufactured goods showed another substantial increase in the month of July, according to a report released by the Commerce Department. The Commerce Department said factory orders soared by 6.4% in July, matching the upwardly revised spike seen in June. Economists had expected factory orders to surge up by 6.0% compared to the 6.2% jump originally reported for the previous month. Factory orders continued to spike as orders for durable goods skyrocketed by 11.4% in July after soaring by 7.7% in June. Orders for transportation equipment led the way higher. The Commerce Department said orders for non-durable goods also increased by 1.8% in July after jumping by 5.3% in June. The report also showed a continued increase in shipments of manufactured goods, which surged up by 4.6% in July after spiking by 10.0% in June. (RTT)

US: Private sector job growth misses estimates in August. Payroll processor ADP released a report showing much weaker than expected private sector job growth in August. ADP said private sector employment increased by 428k jobs in August after rising by an upwardly revised 212k jobs in July. Economists had expected employment to jump by 950k jobs compared to the addition of 167k jobs originally reported for the previous month. "The August job postings demonstrate a slow recovery," said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. She added, "Job gains are minimal, and businesses across all sizes and sectors have yet to come close to their pre-covid-19 employment levels." (RTT)

EU: Producers prices fall at slower pace in July. Eurozone producer prices continued to decline in July but the pace of annual fall slowed further, data from Eurostat showed. Producer prices fell 3.3% YoY in July, following a 3.7% decrease in June. Economists had forecast an annual fall of 3.4%. Excluding energy, producer prices were down 0.4% annually versus a 0.5% drop a month ago. The annual fall was largely driven by an 11.6% decrease in energy prices. Intermediate goods prices declined 2%. Partially offsetting these declines, durable consumer goods prices gained 1.6% and non-durable consumer goods prices moved up 0.4%. Prices of capital goods advanced 0.9%. MoM, producer prices climbed 0.6% in July compared to a 0.7% rise in June. But this was faster than the expected increase of 0.5%. (RTT)

EU: German retail sales unexpectedly fall in July. Germany's retail sales declined for a second straight month in July, defying expectations for a rebound after the coronavirus pandemic-related lockdown curbs were eased, preliminary data from the Federal Statistical Office showed. Retail sales fell 0.9% MoM, while economists had forecast a 0.5% increase. The decline for June was revised to 1.9% from 1.6%. On a YoY basis, retail sales grew 4.2% in July after a 6.7% gain in June, which was revised from 5.9%. Compared to February 2020, the month before the outbreak of Covid-19 in Germany, the turnover in July 2020 was 0.9% higher, Destatis said. Sales of food, beverages and tobacco grew 4.2% YoY and non-food sales increased 4.4%. Sales in supermarkets, self-service department stores and hypermarkets rose 4.6%. (RTT)

UK: House prices surge to new high in August, Nationwide says. British house prices leapt to hit an all-time high in August, mortgage lender Nationwide said, adding to signs of a sharp rebound in the country's housing market after the coronavirus lockdown. Prices jumped by 2.0% from July, the biggest MoM increase since 2004 and far outstripping the median forecast for an increase of 0.5% in a Reuters poll of economists. Nationwide said prices were 3.7% higher YoY. The Reuters poll had pointed to a 2.0% annual increase. "House prices have now reversed the losses recorded in May and June and are at a new all-time high," Robert Gardner, Nationwide's chief economist, said. The Covid-19 lockdown had prompted people to rethink the kind of home they want to live in as well as creating pent-up demand, Gardner said. (Reuters)

Thailand: Announces USD2.2bn worth of additional stimulus in handouts, job measures. Thailand announced THB68.5bn (USD2.2bn) worth of fiscal stimulus in cash handouts and job measures to support Southeast Asia's second-largest economy which has been battered by the coronavirus pandemic. The government plans to spend THB45bn on THB3k handouts for 15m people to boost domestic consumption. It has earmarked THB23.5bn to help the private sector hire 260knew graduates for a year. "The government will continue introducing additional measures" to help domestic activity and investment, said Deputy Prime Minister. Thailand's economy suffered its deepest contraction in over two decades in the 2Q20 as the pandemic hit tourism and domestic activity. (Reuters)

Markets

Iconic Worldwide: To diversify into PPE manufacturing with RM155.5m investment. Iconic Worldwide is looking to diversify its existing core businesses to include manufacturing and trading of personal protective equipment, as well as disposable face masks and gloves, with a total investment of RM155.5m. (SunBiz)

MGB: Bags RM122m construction contract in Sepang. A unit of MGB has bagged a contract worth RM122.3m to undertake the construction of serviced apartments and related facilities in Sepang, Selangor. The project will commence on Feb 15, 2021, and will be completed on May 14, 2022, adding that its outstanding order book now stands at RM1.6bn. (The Edge)

Advancecon: Secures two East Coast Rail Link contracts worth a total of RM80.8m. Advancecon Holdings has secured two East Coast Rail Link (ECRL) contracts totalling RM80.8m, from China Communications Construction (ECRL) SB. The first contract is worth RM53.7m starting from Sept 7, 2020 to Jan 6, 2023. The second contract is valued at RM27.1m, commencing Sept 7, 2020 to Sept 6, 2022. (SunBiz)

LKL: Secures RM78m contract to supply nitrile gloves. LKL International's unit has secured a USD19m (RM78.5m) contract to supply nitrile gloves to a China-based company. The contract is expected to contribute positively to the earnings for the FYE April 30, 2021. (SunBiz)

MAHB: Slashes rental by as much as 30%. Malaysia Airports Holdings (MAHB) said tenants who have signed up or are going to sign up under its ongoing airport commercial reset programme will get to benefit from a rental reduction of up to 30% from the current rate. This is equivalent to a total annual savings of RM45m for the participating tenants. (The Edge)

Inta Bina: Gets RM52.1m construction contract from Eco Majestic. A unit of Inta Bina Group has bagged an RM52.1m contract to undertake the main building works for the Eco Majestic gated community township in Semenyih, Selangor. The construction period is 22 months. (The Edge)

Teck Guan: Buys 510-acre land for RM12m to boost oil palm output. Teck Guan Perdana's wholly-owned unit Tawau Cocoa Estate SB is buying a 510.6-acre agriculture land in Tawau for RM11.9m. (The Edge)

Perdana Petroleum: Lands RM10m vessel charter contract. Perdana Petroleum will be supplying an anchor handling tug supply vessel to ROC Oil (Sarawak) SB for drilling and project activities. The contract is for a duration of up to 210 days, with an option for a 145-day extension. (The Edge)

Vizione: To buy controlling stake in specialty medical gloves maker. Vizione Holdings is planning to acquire a 51%-stake in specialty medical gloves maker SSN Medical Products SB for RM5m, cash, to venture into the glove-making sector. (The Edge)

MQTech: Signs deal to buy Penang-based manufacturer. MQ Technology (MQTech) has entered into an agreement with Kibaru Manufacturing SB's shareholders to negotiate with a view of acquiring a 70% stake in it. (Business Times)

Market Update

The FBM KLCI might open higher today after US equity benchmark indices closed in record territory Wednesday, as investors drew hope from progress in the development of tests and vaccines for COVID-19. Investors largely ignored a mixed batch of economic reports, including a private-sector jobs reading that came in weaker than expected, suggesting only a slow recovery from the coronavirus pandemic. The Dow Jones Industrial Average surged 454.84 points, or 1.6%, ending at 29,100.50, or 1.5% away from its Feb. 12 closing high of 29,551.42. The S&P 500 index climbed 54.19 points, or 1.5%, to settle at a record 3,580.84, its 22nd record close this year. The Nasdaq Composite Index advanced 116.78 points to close at a record 12,056.44, a gain of 1%, and its 43rd record close of the year. The Stoxx Europe 600 finished 1.7% higher Wednesday, while UK’s FTSE 100 benchmark rose 1.4%.

Back home, the FBM KLCI closed up 16.11 points or 1.06% at its intraday high of 1,537.54 while Bursa Malaysia's technology index rose by a larger quantum as the healthcare gauge fell in an apparent tack change where investors price in an earnings recovery after businesses were hit by the COVID-19 pandemic. In the region, China’s CSI 300 closed less than 0.1% higher and Hong Kong’s Hang Seng finished 0.3% lower. Japan’s Nikkei 225 rose 0.5%, while the South Korea’s Kospi gained 0.6%.

Source: PublicInvest Research - 3 Sept 2020

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