PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 30 Nov 2020, 4:57 PM


PublicInvest Research Headlines - 23 Sept 2020

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US: Existing home sales jump to nearly 14-year high in Aug. Existing home sales in the US climbed to their highest level in nearly fourteen years in August, according to a report released by the National Association of Realtors. NAR said existing home sales jumped 2.4% to an annual rate of 6.0m in August after skyrocketing by 24.7% to a rate of 5.9m in July. The continued increase in sales matched economist estimates. With the sharp increase, existing home sales reached their highest level since December of 2006. "Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market," said Lawrence Yun, NAR's chief economist. (RTT)

EU: Consumer confidence improves more than expected. Eurozone consumer confidence rose improved more-than-expected in September to its highest level in six months, preliminary data from the European Commission showed. The flash consumer confidence index climbed to -13.9 from -14.7 in August. Economists had expected a score of -14.6. The latest reading was the highest since March, when it was at -11.6. The corresponding index for EU rose to -14.9 from -15.5 in August. That is also the highest since March, when the coronavirus pandemic was just starting to spread in the region. (RTT)

EU: German economy’s Covid hit may be smaller than feared. Germany may weather its pandemic-induced recession better than expected, private sector indicators suggested, in a hopeful sign for the economy that traditionally serves as Europe's driver of growth. With much economic activity still constrained by Covid-19, Germany's government moved swiftly to boost spending and that cash, along with another shot in the arm from the ECB, appears to have cushioned the pandemic's impact. GDP is now only seen shrinking by 5.2% this year, the Ifo institute projected, more optimistic than its previous estimate for a 6.7% drop and the Bundesbank's 7.1% forecast. "The decline in the second quarter and the recovery are currently developing more favourably than we had expected," Ifo chief economist Timo Wollmershaeuser said. For 2021 it cut its growth forecast to 5.1% from 6.4%, but even that indicates that Germany's economy could be close to its pre-crisis level by the end of next year. The ECB still expects the euro zone as a whole to need a further year to make up the decline. (Reuters)

Hong Kong: Consumer prices fall for second month. Hong Kong's consumer price declined for the second straight month in August, data from the Census and Statistics Department showed. The consumer price index fell 0.4% YoY in August, following a 2.3% decrease in July. The smaller annual fall in prices was mainly due to the effect of the Government's payment of public housing rentals and waiver of two-thirds of rent for tenants of in some housing estates in July dissipated in August, the agency said. Excluding the effects of all government's one-off relief measures, core inflation was 0.1% in August versus 0.2% in the previous month. The underlying consumer price inflation rate edged down further as economic conditions remained weak amid the third wave of the coronavirus epidemic, a government spokesman said. (RTT)

Thailand: Cabinet backs USD2.2bn cash aid to boost economy, jobs. Thailand’s cabinet backed several stimulus measures worth a combined budget of THB70bn (USD2.2bn) to boost consumption and jobs to counter the economic downturn from the Covid-19 outbreak. The ministerial meeting also passed a resolution to add three additional holidays this year to encourage domestic travel, as the country’s vital tourism sector has been crushed by the absence of international tourists for months because of the pandemic. The latest stimulus plans include cash incentives for welfare cardholders and funds for members of a co-payment program geared to low income earners and small retailers, Prime Minister Prayuth Chan Ocha said. “Both the programs will help stimulate spending, increase purchasing power and reduce the cost of living,” Prayuth said. The Thai economy is forecast to contract by more than 8% this year, its worst annual performance on record, led by a slump in exports and tourism. (Bloomberg)


IJM Corp (Outperform, TP: RM1.55): Announces 3-year strategic focus . IJM Corporation has announced a three-year strategic focus built around three pillars: build resilience, drive growth, and nurture capabilities. Its CEO and MD, Liew Hau Seng, said IJM was optimistic that its performance in the quarters of this financial year ending March 31, 2021, would improve with the strategic focus. The company said the pillars were mainly to address shorter business cycles, changing consumer behaviour, digital disruptions, rising costs, and stiffer competition on the back of global macro headwinds and economic slowdown. (Bernama)

T7 Global: To acquire remaining 49% stake in T7 Wenmax for RM39m . T7 Global has proposed to acquire the remaining 49% equity interest in its partially owned subsidiary, T7 Wenmax, from Megaxus Resources SB for a cash consideration of RM39.2m via its wholly owned subsidiary, T7 Gastec SB. After the acquisition, T7 Wenmax will become a wholly owned subsidiary of the group. The consideration sum of RM39.2m was arrived at on a willing buyer-willing seller basis, calculated based on a price-to-earnings multiple of about 7.72 times to the 49% of the company’s latest audited profit of tax as at the financial ending Dec 31, 2019 of about RM10.36m. (The SunDaily)

Widad: Expands IFM business to include prevention, control of airborne diseases. Widad Group Bhd has entered into an agreement with IAQ Solutions SB (ISSB) to collaborate in indoor air quality solutions for the prevention and control of airborne diseases. Widad group managing director Datuk Mohd Rizal Mohd Jaafar said as concerns about indoor air quality has become more intense due to the coronavirus outbreak, the group has identified that indoor air quality will become an important component in facilities management. (New Straits Times)

Notion VTec: Secures RM337m nitrile glove supply contract. Notion VTEC Bhd's unit Notion Venture SB will supply disposable nitrile examination gloves to a European company in the personal protection equipment space for USD82.2m (RM337.8m). The gloves will be delivered over two tranches to Europe for meeting the medical needs in Covid-19 affected areas, it said in a filing with Bursa Malaysia. (Starbiz)

Kanger: Ventures into COVID-19 vaccine distribution. Kanger International has inked a proxy agreement with Shenzhen Public Health Technology Co, Ltd (SZPHT) to get the rights to distribute a COVID-19 vaccine developed by China National Pharmaceutical Group Corp (Sinopharm). Under the agreement, SZPHT will get dealership status from Sinopharm, following which Kanger would get the right to distribute the vaccine in Southeast Asia. (The Edge)

Asdion: Bursa reprimands Asdion, fines five directors for breach of rules . Asdion and five of its directors have been reprimanded by Bursa Malaysia for breaching ACE Market Listing Requirements, with the five directors being hit with a collective fine of RM145,000. Asdion was found to have failed to have carried out a limited review on its quarterly report for the financial periods ended March 31,2018 and June 30,2018, with its board accused of failing to look at the competency in its finance and accounting resources and ensuring proper procedures for financial reporting. (The Edge)

Market Update

The FBM KLCI might open higher today as US stocks rose Tuesday, recovering from intraday losses as the bulls appeared to overcome worries about renewed coronavirus lockdowns in Europe and rising political uncertainty in the US. Investors also watched testimony by Federal Reserve Chairman Jerome Powell and Treasury Secretary Steven Mnuchin before a House panel. The Dow Jones Industrial Average rose 140.48 points, or 0.5%, to close at 27,288.18, after hitting an midday low of 26,989.93. The S&P 500 rose 34.51 points, or 1.1%, finishing at 3,315.57. The Nasdaq Composite rose 184.84 points, or 1.7%, to 10,963.64. On the economic front, data showed existing-home sales in August rose by 2.4% to an annual rate of 6 million, the fastest pace in nearly 14 years. The pan-European Stoxx Europe 600 Index rose 0.2% and the UK’s benchmark FTSE gained 0.4%.

Back home, the FBM KLCI ended 6.35 points or 0.42% higher at 1,505.78, partly helped by banking stocks' price rise, to buck Asian equity indices drop as the rising global number of Covid-19 infections raised economic growth concerns. In the region, Hong Kong’s Hang Seng Index fell 1% and the Shanghai Composite Index lost 1.3%, while Japan’s Nikkei remained closed for a public holiday.

Source: PublicInvest Research - 23 Sept 2020

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