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Author: PublicInvest   |   Latest post: Tue, 1 Dec 2020, 10:01 AM

 

PublicInvest Research Headlines - 15 Sept 2020

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Economy

EU: Industrial production grows further . Eurozone industrial production grew at a slightly faster than expected pace in July, as the economy attempts to sustain its recovery from the slump caused by the coronavirus, or Covid-19, pandemic. Industrial production rose 4.1% from June, when it grew 9.5%, which was revised from 9.1% reported initially, preliminary data from Eurostat showed. Production gained for a third straight month. Economists had forecast a 4% increase. Production growth continued to be driven by the manufacture of capital goods, which rose 5.3%. Durable consumer goods production grew 4.7% and output of intermediate goods increased 4.2%. (RTT)

EU, China: Tear down your barriers, EU says after summit with China's Xi . EU leaders told Chinese President Xi Jinping to open up markets, respect minorities and step back from a crackdown in Hong Kong, also asserting that Europe would no longer be taken advantage of in trade. Anxious to show that the EU will not take sides in a global standoff between China and the US, German Chancellor Angela Merkel joined the bloc’s chief executive and chairman to deliver a tough-talking message to Beijing. With more than a billion euros a day in bilateral trade, the EU is China’s top trading partner, while China is second only to the United States as a market for EU goods and services. China’s Xi was not part of the post-summit news conference and there was no joint statement, but the state-owned Xinhua News Agency reported that Xi rejected any interference in Chinese affairs, particularly on human rights. (Reuters)

EU: Lagarde says Euro gains blunted stimulus boost to inflation . President Christine Lagarde said the recent appreciation of the euro has partly offset the positive impact that the ECB’s stimulus had in boosting inflation and reiterated that policy makers stand ready to adjust all of their instruments if needed. The Governing Council will carefully assess all the information coming from the euro-area economy, including developments in the exchange rate, with regard to their impact on the medium-term inflation outlook, she said on Sunday. “When it comes to meeting our price stability goal, there is and there will be no complacency,” Lagarde argued in her remarks at the meeting of the Council of Governors of the Arab Central Banks and Monetary Authorities. (Bloomberg)

UK: Job cuts set to double last recession peak in coming months . The UK is on course for more than twice as many job losses in the coming months than in the recession following the financial crisis, underscoring the bleak outlook for the labor market. Around 450,000 roles look set to be terminated in the autumn, according to the Institute for Employment Studies. The analysis is based on notifications to the government’s Insolvency Service, which employers are legally required to file if they plan to cut at least 20 positions. The figures are a stark reminder of the difficulties facing businesses after months of restrictions to slow the spread of Covid-19. Chancellor Rishi Sunak is facing growing calls from industry groups and fellow lawmakers to extend the furlough program, under which the government has paid as much as 80% of the wages of some 9.6m workers. Yet he faces spiraling costs from crisis measures that have seen government debt balloon to over GBP2trn (USD2.6trn) for the first time. (Bloomberg)

Japan: Industrial production more than estimated . Japan's industrial production rose more than estimated in July, final data from the Ministry of Economy, Trade and Industry showed. Industrial production rose a seasonally adjusted 8.7% monthly in July. In the initial estimate, output rose 8.0%. Shipments rose 6.6% MoM in July versus a 6.0% increase in the initial estimate. Inventories fell 1.5% MoM in July. According to the initially estimate inventories declined 1.6%. On a yearly basis, industrial production declined 15.5% in July. According to the initial estimate, output fell 16.1%. (RTT)

South Korea: Export prices dip 0.2% in Aug . Export prices in South Korea were down 0.2% on month in August, the Bank of Korea said - after rising 0.1% in July. On a yearly basis, export prices dropped 6.8% after sliding 5.3% in the previous month. Agricultural and forestry exports added 0.1% on month and fell 3.5% on year, while manufacturing products were down 0.2% on month and 6.8% on year. Import prices fell 1.1% on month after losing 0.8% in July, and they were down 10.5% on year after dropping 8.9% a month earlier. (RTT)

Hong Kong: Industrial production falls faster in 2Q . Hong Kong's industrial production declined at a faster rate in the second quarter, data published by the Census and Statistics Department showed. The index of industrial production for manufacturing industries as a whole fell 5.1% YoY in the second quarter, following a 4.6% decline in the previous quarter. The sub index for sewerage, waste management and remediation activities declined 2.4% annually in the second quarter. On a seasonally adjusted basis, the index of industrial production for manufacturing industries as a whole decreased by 0.8% in the second quarter compared with the previous quarter. (RTT)

Markets

Kerjaya Prospek: Bags RM154.4m contract in Penang. Kerjaya Prospek Group's subsidiary Future Rock SB (FRSB) has bagged a RM154.4m contract from Eastern & Oriental's unit Tanjung Pinang Development SB in Penang. The contract will commence on Sept 23 this year and to be completed within 40 months from the commencement date. (Business Times)

PCG: Ink deal with PCC to jointly produce specialty chemicals. Petronas Chemicals Group (PCG) is acquiring a 50% stake in PCC SE's Malaysian subsidiary PCC Oxyalkylates Malaysia SB (PCC-OM), marking its entry into the growing oxyalkylates market. PCG and PCC SE planned to build an oxyalkylates facility within the Kertih Integrated Petrochemical Complex, Terengganu. Construction of the facility is targeted to commence in 2021 while production is scheduled to begin in 2023. (Business Times)

Willowglen: Bags RM6.1m contract to maintain cable oil pressure monitoring system. Willowglen MSC's unit has been awarded a contract worth RM6.1m by Singapore’s SP PowerAssets Ltd for the comprehensive maintenance of a cable oil pressure monitoring system, as well as the system's migration. The job will complete by Sept 13, 2025. (The Edge)

LKL: Reveals details of firm granting glove supply contract. LKL International has finally revealed the identity of the Chinese company that granted it the RM78.5m nitrile glove supply contract. “Further to the company's announcements made on Sept 2 and Sept 7, 2020 in relation to the sales contract awarded to LKLAM (LKL Advance Metaltech SB) for the supply of nitrile gloves, the board of directors of LKL International wishes to announce that the name of the customer is Weihai Textile Group Import and Export Co, Ltd.” (The Edge)

Sasbadi: Plans RM5.8m private placement for digital learning biz. Sasbadi Holdings plans to raise up to RM5.8m via private placement to fund the maintenance and enhancement of the group’s digital learning business and English upskilling products. It said a portion of the proceeds will be earmarked for its fully-integrated digital learning platform i-LEARN Ace, to capitalise on the increasing demand for such services during the Covid-19 pandemic. The expected proceeds to be raised is based on an indicative issue price of 13.5 sen per placement share. (The Edge)

Green Packet: In telematics collaboration with Hannover Re. Green Packet and Kuala Lumpur-based regional underwriting centre Hannover Re SE’s Malaysia branch have teamed up for a commercial fleet usage-based insurance (UBI) telematics programme in Malaysia. This collaboration will further strengthen its smart mobility strategic initiative to improve the safety of road users. (SunBiz)

George Kent: 2Q net profit down 21% on lower engineering division revenue. George Kent (Malaysia) net profits fell 21% to RM8.7m for its 2QFY21 against RM11m reported in the same period of the previous year, on the back of lower revenue from its engineering division despite a higher fair value gains on investment. It has declared an interim dividend of 1 sen per share payable on Oct 22, 2020. (SunBiz)

Market Update

The FBM KLCI might open higher today as U.S. stocks rose Monday, taking back a chunk of last week’s losses amid fresh hope for a coronavirus vaccine, a flurry of initial public offerings and potential corporate mash-ups, including reports that Oracle plans to forge a partnership with TikTok, the popular China-based social-media platform. The Dow Jones Industrial Average rose 327.69 points, or 1.2%, to finish at 27,993.33, after briefly trading above the 28,000 threshold. The S&P 500 added 42.57 points, or 1.3%, closing at 3,383.54. The Nasdaq Composite climbed 203.11 points, or 1.7%, to end at 11,056.65, snapping a two-session losing streak. In Europe, the Stoxx Europe 600 index rose 0.2% and the U.K.’s FTSE 100 ended with a 0.1% loss.

Back home, the FBM KLCI closed up 6.51 points or 0.43% at 1,511.36 with world share indices as news on the resumption of AstraZeneca’s clinical trials of its Covid-19 vaccine raised hopes. Japan’s Nikkei closed 0.7% higher, while China’s CSI 300 index gained 0.5%.

Source: PublicInvest Research - 15 Sept 2020

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