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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 27 Nov 2020, 11:04 AM

 

PublicInvest Research Headlines - 30 Sept 2020

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Economy

US: Consumer confidence posts biggest gain in 17 years, downside risks remain. US consumer confidence rebounded by the most in 17 years in Sept amid an improvement in labor market views, but it remained below levels that prevailed before the Covid- 19 pandemic struck the nation early this year. The Conference Board’s consumer confidence index increased 15.5 points to a reading of 101.8 this month. That was the largest gain since April 2003. Economists polled by Reuters had forecast the index edging up to a reading of 89.5 in Sept. The index was at 132.6 in Feb. The cutoff date for the survey was Sept 18. (Reuters)

US: NY Fed's Williams sees about three years for full recovery . The US recovery from the coronavirus-linked recession has been more robust than expected, a top Federal Reserve policymaker said on Tuesday, though he added it could be about three years before the economy regains its full strength. “We want to get back to maximum employment as soon as possible,” New York Fed President John Williams said, adding that the economy would be strong and close to full employment “in about three years time.” Still, he added, “there’s clearly a lot of unknowns” about the next few years. (Reuters)

US: Goods trade deficit widens in Aug. The US trade deficit in goods widened in Aug, with imports rising as businesses rebuild inventories which were depleted when the Covid-19 pandemic upended the flow of goods. The Commerce Department said on Tuesday the goods trade gap increased 3.5% to USD82.9bn last month. Imports of goods rose 3.1% to USD201.3bn, eclipsing a 2.8% increase in goods exports to USD118.3bn. (Reuters)

EU: German consumer prices fall in Sept. Germany's consumer prices declined in Sept largely due to the reduction in the value added tax, flash estimate from Destatis showed Tuesday. Consumer prices dropped 0.2% on a yearly basis after staying flat in Aug. Prices were expected to drop 0.1%. MoM, consumer prices fell 0.2% versus a 0.1% decrease in Aug. Final data is due on Oct 13. Data showed that goods prices decreased 1.7% annually, while cost of services gained 1%. (RTT)

UK: Mortgage approvals leap to near 13 year-high in Aug. British mortgage approvals increased sharply in Aug to hit their highest in almost 13 years, a latest sign of a post-lockdown bounce back in the housing market, data from the BOE showed on Tuesday. Mortgage approvals jumped to 84,700, the data showed. Economists polled by Reuters had expected about 71,000 approvals. But consumer borrowing increased by only around GBP300m (USD386m) in Aug from July compared with a median forecast for a GBP1.45bn increase in the Reuters poll. (Reuters)

Singapore: Producer prices decline at faster pace. Singapore producer prices declined at a faster pace in Aug on a sharp fall in oil cost, data from the Department of Statistics showed Tuesday. Producer prices decreased 9.3% on a yearly basis in August, following a 6.4% drop in July. Oil and non-oil indices were down 35.6% and 5.4%, respectively. MoM, producer prices dropped 1.2% versus a 0.1% fall in July. Another report from the statistical office showed that import prices slid 6.8% annually, extending the 7.3% fall in July. (RTT)

Vietnam: GDP growth improves in 3Q. Vietnam's economy expanded at a faster pace in the 3Q but remained below pre pandemic level, official data showed Tuesday. GDP rose 2.6% on yearly basis in the 3Q, following a revised 0.39% rise in the 2Q. During Jan to Sept, exports grew 4.2%, while imports fell 0.8%. In Sept, consumer prices gained 2.98%. Inflation averaged 3.85% in the first nine months of the year, which was close to 4% target set by the government. The economy rebounded in the 3Q and should continue to perform strongly over the coming year, Gareth Leather, an economist at Capital Economics, said. (RTT)

Markets

Ekovest: Eyes additional 24% stake in PLS Plantations. Ekovest has entered into agreements with three related parties for the group to acquire a total of 89.1m shares and 78.3m warrants in PLS Plantations for a total RM85.8m, which will see the latter become a subsidiary of the group. The group has entered into three separate conditional share purchase agreements with its MD Tan Sri Lim Keng Cheng, Limbongan Resources SB and Lim Seong Hai Holdings SB. (The Edge)

Kanger: To collaborate with Sinopharm on distribution of Covid-19 vaccine. Kanger has entered into a collaboration agreement with Sinopharm Group Hunan Changde Medical Co Ltd (SGHC) relating to the distribution of Covid-19 vaccine and medical equipment products in Malaysia. Kanger said the products are developed by state-owned China National Pharmaceutical Group Corp (Sinopharm). Under the agreement, SGHC will appoint Kanger as the distributor of its products in Malaysia, while Kanger will promote and market the products for SGHC. (The Edge)

Inix: Ventures into durian business. After making news over its plan to enter the rubber glove industry, Inix has now proposed to venture into the durian industry. It said it had signed a strategic partnership and supply agreement with Dura Manufacturing SB (Duria). Inix will be appointed to secure the supply chain for Duria for 5k tonnes of nitrogen frozen Musang King durian, 2k tonnes of Durian paste and 1k tonnes of Musang King pulp over the next five years. Inix and Duria are looking at setting up three new primary processing plants for the fruit products. (The Edge)

MyNews: Widen loss in 3Q on Covid-19 impact. MyNews Holdings saw its net loss for the 3QFY20 widen QoQ as a result of the MCO. Its latest quarterly loss stood at RM6.09m, from RM2.33m in 2QFY20. "In summary, MyNews' 3Q results were adversely affected by the Covid-19 pandemic with a LBT of RM7.81m. Other contributing factors were losses incurred by the FPC (food processing centre) of RM2.50m, bad debts of RM440k written off and share of losses of RM700k of jointly controlled entity, WH Smith, as the travel industry was significantly affected by the pandemic," it said. (The Edge)

Hai-O: 1Q net profit jumps 32.5% on improved margins. HaiO Enterprise’s net profit rose 32.5% YoY to RM10.26m in 1QFY21, attributed to improvements in its operating profit margins from cost optimisation initiatives and favourable change of sales mix. Hai-O stated it will continue to enhance its digital marketing strategies across all major business segments to tap on opportunities and widen market coverage under the “new normal” and roll out more small ticket items. (The Sun Daily)

IPO: Southern Cable to raise RM71.2m from ACE Market listing. The Southern Cable Group aims raise RM71.2m from its IPO. RM18.5m of the proceeds would be used to purchase and upgrade its machinery and equipment, RM7.5m to construct new factories and RM4.0m to fund the purchase and installation of enterprise resources planning (ERP) system. "Additionally, RM27.5m will be set aside as working capital, while RM9.2m will be utilised for repayment of bank borrowings,” it said, adding that RM4.5m would be used to defray estimated listing expenses and RM30m for capex. (StarBiz)

Market Update

The FBM KLCI might open weaker today as US stocks finished lower Tuesday, after moving between small losses and gains throughout the session, ahead of the first presidential debate before the November election. The Dow Jones Industrial Average fell 131.40 points, or 0.5%, to end at 27,452.66; while the S&P 500 index closed 16.13 points, or 0.5%, lower at 3,335.47, and Nasdaq Composite Index slipped 32.28 points, or 0.3%, finishing at 11,085.25. All three major equity indices snapped three sessions of gains. In economic reports, US trade deficit in goods rose 3.5% in August to $82.9bn, advanced US wholesale inventories increase 0.5% on that month, while US retail inventories climbed 0.8% last month. Separately, US home prices rose 4.8% in July, up from 4.3% in the prior period, according to a three-month average reading from Case-Shiller’s national price index, buttressed by superlow mortgage interest rates.In Europe, the Stoxx Europe 600 index slipped 0.5% and the U.K.’s FTSE 100 retreated 0.5%.

Back home, the FBM KLCI closed down 7.76 points or 0.51% at 1,503.90, partly due to profit taking in rubber glove manufacturers' shares and as investors continue to weigh the impact of the resurgence in global Covid-19 infections on global markets. Meanwhile in the region, Japan’s Nikkei added 0.1% and Hong Kong’s Hang Seng Index booked a 0.9% loss, while China’s CSI 300 rose 0.2% and the Shanghai Composite Index also rose 0.2%.

Source: PublicInvest Research - 30 Sept 2020

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