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

 

PublicInvest Research Headlines - 14 Oct 2020

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Economy

  • Global: IMF says economic contraction to be less severe than previously feared. The global economy is set to contract less severely than initially feared due to better-than-expected outcomes in the main economies in the 2Q20 despite the lockdowns to battle the coronavirus pandemic, but the outlook remains clouded with uncertainty, especially for emerging markets, the International Monetary Fund said. In its latest World Economic Outlook, the lender forecast a 4.4% contraction for the world economy this year, which is less severe than the 5.2% decline seen in June. "This upgrade owes to somewhat less dire outcomes in the 2Q, as well as signs of a stronger recovery in the 3Q, offset partly by downgrades in some emerging and developing economies," IMF said. The global economy is expected to rebound with 5.2% growth next year, which is less than the 5.4% expansion seen earlier. (RTT)
  • US: Consumer price growth matches estimates in September. Consumer prices in the US showed a modest increase in the month of September, according to the Labor Department, with the uptick in prices matching economist estimates. The Labor Department said its CPI rose by 0.2% in September after climbing by 0.4% in August. Prices for used cars and trucks spiked by 6.7%, accounting for most of the monthly increase by the headline index. The report said energy prices increased by 0.8% amid a jump in prices for natural gas, while food prices came in unchanged. Excluding food and energy prices, core consumer prices still edged up by 0.2% in September following the 0.4% growth seen in August. The uptick in core prices also matched estimates. The modest increase in core prices reflected the soaring prices for used cars and trucks as well as higher prices for shelter, new vehicles, and recreation. (RTT)
  • US: Weekly jobless claims edge down to 840k. A report released by the Labor Department showed a modest decrease in first-time claims for US unemployment benefits in the week ended October 3rd. The Labor Department said initial jobless claims edged down to 840k, a decrease of 9k from the previous week's revised level of 849k. Economists had expected jobless claims to dip to 820k from the 837k originally reported for the previous week. The report said the less volatile four-week moving average also fell to 857k, a decrease of 13.25k from the previous week's revised average of 870.25k. Continuing claims also tumbled by 1.003m to 10.976m in the week ended September 26th. The four-week moving average of continuing claims slumped to 12,112,250, a decrease of 642k from the previous week's revised average of 12,754,250. (RTT)
  • EU: German ZEW economic confidence at 5-month low. Germany's economic sentiment deteriorated to a five-month low in October amid heightened uncertainty surrounding trade talks with the UK and the run-up to the presidential elections in the US, survey data from the ZEW - Leibniz Centre for European Economic Research showed. The ZEW Indicator of Economic Sentiment fell more-than-expected to 56.1 in October from 77.4 in September. The score was forecast to drop to 73.0. The latest reading was the lowest since last May. Meanwhile, the current conditions index improved to -59.5 from -66.2 in the previous month. The expected reading was -60.0. The recent sharp rise in the number of Covid-19 cases has increased uncertainty about future economic development, as has the prospect of the UK leaving the EU without a trade deal, ZEW President Achim Wambach, said. The current situation in the run-up to the presidential election in the United States further fuels uncertainty, Wambach added. (RTT)
  • UK: Jobless rate hits 4.5% as work-protection plan nears end. Britain's unemployment rate rose by more than expected in the three months to August, before the end of the government's broad coronavirus job-protection plan and the imposition of new restrictions to slow the pandemic. The jobless rate rose to 4.5%, its highest in more than three years, from its previous reading of 4.1% and above a forecast of 4.3% in a Reuters poll of economists. The number of people counted as unemployed rose by the most since 2009, during the global financial crisis, the Office for National Statistics said. "Since the start of the pandemic there has been a sharp increase in those out of work and job hunting but more people telling us they are not actively looking for work," Jonathan Athow, the ONS's deputy national statistician, said. "There has also been a stark rise in the number of people who have recently been made redundant." (Reuters)
  • China: Imports, exports surge as global economy reopens. China's imports grew at their fastest pace this year in September, while exports extended strong gains as more trading partners lifted coronavirus restrictions in a further boost to the world's secondbiggest economy. Exports in September rose 9.9% YoY, customs data showed, broadly in line with analysts' expectations and up from a solid 9.5% increase in August. The strong trade performance suggests Chinese exporters are making a brisk recovery from the pandemic's hit to overseas orders. As the global economy restarts, Chinese firms are rushing to grab market share as their rivals grapple with reduced manufacturing capacity. "The big picture is that outbound shipments remain strong, with easing demand for Covid-19 related goods such as face masks being mostly offset by a recovery in broader demand for Chinese-made consumer goods," Capital Economics said. (Reuters)

Markets

  • GuocoLand: IRB slaps GuocoLand unit with RM82m assessment notice. GuocoLand (Malaysia) said its whollyowned subsidiary GLM Real Estate Holdings SB has received a notice of assessment for 2016 of RM82.6m, comprising income tax of RM56.3m and a penalty of RM26.3m. This is as IRB considers the gains made by GLM from the disposal of shares in a property subsidiary as chargeable under the Income Tax Act, instead of the Real Property Gains Tax Act. There is a potential net tax impact of RM70.2m to the company, as GLM had previously paid real property gains tax of RM12.4m. (The Edge)
  • Symphony Life: To sell six parcels of land in Ulu Langat for RM250m. Symphony Life is planning to sell six parcels of industrial development land in Ulu Langat, Selangor to Perdana Park City SB for RM250m, which is more than two-thirds of Symphony Life's market capitalisation. The disposal of the parcels is expected to result in a gain after tax of RM74.24m for the group. (The Edge)
  • LKL: Gets shareholders' nod on private placement, ESOS. LKL International has obtained its shareholders' approval to undertake a private placement and an employees' share option scheme (ESOS). The medical/healthcare equipment provider said the private placement, entails the issuance of up to 85.8m shares amounting to not more than 20% of its total ordinary shares, at an indicative price of RM1.10 each. The proposed ESOS, meanwhile, will encompass the issuance of up to 15% of the enlarged total number of issued ordinary shares and private placement shares. (New Straits Times)
  • Kanger: Plans private placement to raise RM68.88m. Kanger International has proposed a private placement of up to 386.97m shares or 20% of the total number of its issued shares to raise RM68.88m to third party investors to be identified later. Of this amount, RM34.38m will be allocated for future viable investment, while RM34.38m will be used as working capital for existing businesses. (The Edge)
  • Reservoir Link: Bags mechanical heating equipment contract from PTTEP. Reservoir Link Energy said its 60%- owned subsidiary has bagged a contract from Thailand’s national petroleum company PTT Exploration and Production Public Company Ltd (PTTEP) to provide downhole heating technology complete with equipment and services. The two-year contract to Reservoir Link Solutions SB was awarded by PTTEP’s units PTTEP HK Offshore Ltd, PTTEP Sabah Oil Ltd and PTTEP Sarawak Oil Ltd. (The Edge)
  • Handal Energy: Gets crane inspection, maintenance contract. Handal Energy has received a letter of award from Carigali Hess Operating Company SB for the provision of pedestal crane inspection and maintenance services. The contract is for a duration of three years, with an additional two years extension option. (The Edge)
  • IPO: Samaiden public offer of 10.5m new shares oversubscribed 56.5 times. Samaiden Group Bhd's offer of 10.5m new shares at 48 sen each to the public was oversubscribed by 56.5 times. Alliance Investment Bank said there were 15,857 applications for 603.95m new shares received from the public for the 10.5m new shares offered by Samaiden, which is seeking to list on the ACE Market. (The Star)

MARKET UPDATE

  • The FBM KLCI might open weaker today after US stocks ended slightly lower in a choppy Tuesday session as investors saw some U.S. drugmakers face setbacks in vaccine or treatment trials for COVID-19. Wall Street participants also parsed earnings from some of the biggest financial institutions, to start the third-quarter reporting season. The Dow Jones Industrial Average fell 157.71 points or 0.55% to 28679.81, while the S&P 500 fell 22.29 points or 0.63% to 3,511.93. The Nasdaq Composite edged 12.36 points lower, or 0.1%, to close at 11,863.90. Pharmaceutical giant Johnson & Johnson announced a pause of all of its COVID-19 vaccine trials. And a clinical trial for a coronavirus antibody treatment made by Eli Lilly was paused because of a “potential safety concern.” The pan-European Stoxx 600 Europe index fell around 0.6% and London’s FTSE 100 stock index lost 0.5%.

    Back home, the FBM KLCI staged a rebound from an intraday low of 1,512.18 points at 3:30pm. The benchmark index climbed 13.62 points from the intraday low to close at 1,525.20. It gained 6.77 points or 0.45% against yesterday’s closing. Elsewhere in the region, Hong Kong’s Hang Seng Index climbed 2.2% or 530.55 points to 24,649.68, while the Shanghai Composite Index rose 1.28 points to 3,359.75. Japan's Nikkei 225 was up by 0.18% or 43.09 points at 23,601.78, while South Korea’s Kospi declined 0.02% or 0.58 points at 2,403.15.

Source: PublicInvest Research - 14 Oct 2020

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