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Author: PublicInvest   |   Latest post: Wed, 12 May 2021, 9:06 AM

 

PublicInvest Research Headlines - 8 Dec 2020

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Economy

  • EU: Sentix investor confidence improves in Dec. EU investor confidence strengthened notably in Dec on vaccine hopes, survey data from Sentix showed. The investor sentiment index advanced to -2.7 in Dec from -10.0 in Nov. The score was forecast to rise moderately to -8.3. "Hopes for an early use of vaccines are fuelling the fantasy that the economy in 2021 will recover more clearly than previously expected from the consensus," the think tank said. The current conditions indicator rose to -30.3 from -32.3 in Nov. The expectations index came in at 29.3 in Dec, up from 15.3 in Nov. In Germany, the investor confidence index climbed to 6.9 in December from 1.3 in Nov, the survey showed. (RTT)
  • EU: German industrial output surges on booming car sales. Booming car sales drove a stronger-than-expected jump in German industrial output in Oct, in a further sign that the exportoriented manufacturing sector helped Germany to get off to a solid start in 4Q. The German government has unleashed an unprecedented array of rescue and stimulus measures to help companies and consumers get through the Covid-19 pandemic as unscathed as possible, including incentives to buy electric and hybrid cars. Industrial output was up by 3.2% MoM after an upwardly revised increase of 2.3% in Sept, figures released by the Federal Statistics Office showed. (Reuters)
  • UK: House prices rise by most since 2016, Halifax says. British house prices showed their biggest annual rise since June 2016 last month, as people sought to move into bigger houses following the Covid lockdown earlier this year, mortgage lender Halifax said. House prices in Nov were 7.6% higher YoY, a slightly faster increase than Oct’s 7.5% rise and the biggest increase since June 2016, just before Britain voted to leave the EU. Halifax said it did not expect the recent pace of price increases to last as the economic outlook was likely to remain challenging, even with the roll-out of coronavirus vaccines. "With unemployment predicted to peak around the middle of next year, and the UK's economy not expected to fully recover the ground lost over CY20 for a number of years, a slowdown in housing market activity is likely over the next 12 months," Halifax MD Russell Galley said. (Reuters)
  • China: Exports surge on hot demand for PPE, remote working tech. China's exports rose at the fastest pace in almost three years in Nov, as strong global demand for goods needed to ride out the pandemic landed China a record trade surplus. A brisk factory recovery in China from coronavirus shutdowns earlier. has far outpaced reopenings seen in major trading partners, many of which are still struggling with outbreaks. Exports in Nov rose 21.1% YoY, customs data showed, the fastest growth since Feb 2018. The strong exports come despite CNY hovering near multi-year peaks against the USD. Imports rose 4.5% YoY in Nov, slower than Oct’s 4.7% growth. I.mproving domestic demand and higher commodity prices helped buoy the reading. "We believe China's export growth could remain elevated for another several months due to the worsening Covid-19 situation overseas," analysts said. (Reuters)
  • China: Forex reserves increase in Nov. China's foreign exchange reserves increased to its highest level in more than four years in Nov, data from the People's Bank of China showed. Forex reserves rose about USD50.5bn to USD3.178trn at the end of Nov. This was the highest level since Aug 2016. However, the value of gold reserves decreased to USD110.4bn at the end of Nov. Data released earlier showed that exports advanced 21.1% YoY Nov, while imports grew moderately by 4.5%, resulting in a surplus of USD75.4bn. (RTT).
  • Taiwan: Nov exports up again, boosted by new phones. Taiwan's exports rose in Nov for the fifth consecutive month, boosted by surging global demand for the island's electronic goods as people work from home during the Covid-19 pandemic and new phone launches. Exports jumped 12.0% YoY to USD31.99bn in Nov, the second highest on record for any month, the Ministry of Finance said. The ministry attributed the growth to continued robust demand for electronics, driven by new technology such as 5G telecommunications networks and telecommuting, as millions of people are forced to work from home globally. (Reuters)
  • Singapore: Retail sales continue decline at slower pace. Singapore’s retail sales slid for yet another month in Oct, albeit at a smaller pace MoM. The total sales value was down 8.6% YoY in Oct, making this the metric’s eighth consecutive month in the red. Still, this is an improvement from Sept’s revised figure of a 10.7% fall, data released by the Department of Statistics (Singstat) revealed. The pattern of declines in Oct was similar to that in Sept, with sectors such as food and alcohol (-44.7% YoY), department stores (-35.2% YoY) and cosmetics, toiletries and medical goods (- 30% YoY), taking the worst hit on a YoY basis. Other consumer sectors remained in the red too, with spending declining on apparel and footwear (-26.3% YoY), watches and jewelry (-24.3% YoY), computer and telecommunications equipment (-17.2% YoY) and petrol station services (-12.4% YoY). (The Edge)

Markets

  • Yong Tai (Neutral, TP: RM0.28): To raise up to RM92m via private placement. Yong Tai announced a private placement to raise up to RM92m. It said the money raised would be used to fund the development of its Impression City and Impression UThant projects, as well as for working capital. The group said the private placement will consist of up to 20% of its total number of shares to independent third party investors to be identified later. (The Edge)
  • Comment: Despite recent vaccine-related fervour, the Impression City project remains its core earnings driver. This move is positive, with the recent spike in share price likely to make it easier to raise requisite funds to drive its next level of growth. Near-term property market weakness may continue to weigh, though optimism on its venture into distribution of the COVID-19 vaccine could keep interest in the stock relatively robust. We retain our Neutral call
  • Genting Malaysia (Neutral, RM2.40): Resort in the Bahamas to reopen on Dec 26. Genting Malaysia’s resort in the Bahamas, which includes some 305 rooms and a casino, will be reopening on Boxing Day (Dec 26). Resorts World Bimini Bahamas said that it had been taking extra precautions for the safety of its guests, noting that limited packages including twonight packages are currently available for booking. (The Edge)
  • Masteel: Seeks RM81.5m via rights issue exercise. Malaysia Steel Works (KL) (Masteel) is seeking to raise up to RM81.5m by selling rights shares with free detachable warrants. The company has allocated up to RM69m for working capital requirements, RM10m for the repayment of bank borrowings, and the balance RM2.5m to defray the estimated expenses. (StarBiz)
  • Solarvest: Secure solar PV contracts. Solarvest Holdings has secured a contract from Southern Cable Group to install a 2.7 megawatt (MW)-peak rooftop solar PV system on its cable and wires manufacturing facility in Kuala Ketil, Kedah. Solarvest will undertake the full turnkey engineering, procurement, construction and commissioning works to equip the facility with Southern Cable’s in-house, locally manufactured and TÜV SÜD certified cables and wires. (Bernama)
  • Batu Kawan: Makes formal offer for remaining CCM shares at RM3.10 each. Batu Kawan made a formal offer to buy all shares in Chemical Company of Malaysia (CCM) that it does not already own at RM3.10 per share. This is the price the group is paying to acquire a 56.32% stake in CCM for RM292.97m cash from Permodalan Nasional Bhd (PNB). Upon completion of the acquisition, Batu Kawan’s shareholding in CCM will be increased to 59.73% from 3.41%. (The Edge)
  • MyEG: Inks three-year cooperation with Zhifei to obtain JAKIM certification, distribute Covid-19 vaccine. MyEG Services (MyEG) has entered into a cooperation with Anhui Zhifei Longcom Biopharmaceutical Co Ltd (Zhifei), via a MoU, to obtain Malaysian halal certification for the Chinese biopharma company’s Covid-19 vaccine and to exclusively distribute the vaccine in Malaysia for a three-year period. The commencement of the Phase 3 trials will make Zhifei’s vaccine one of the first to undergo the final-stage trials in Malaysia, under the purview of the Ministry of Health (MoH). (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today as rally in riskier assets that has propelled global equities to record highs in recent weeks lost momentum on Monday. Optimism about the progress of several Covid-19 vaccine candidates and an oil supply agreement among major producers helped lift stocks to new heights last week. But US and European benchmark stock indices both slipped on Monday, with the S&P 500 slipping 0.2% and the Stoxx 600 closing down 0.3%. Falls were most pronounced in those economically-sensitive sectors of the market that had recently rallied, including financials and energy stocks. Meanwhile, the Dow Jones Industrial Average also retreated 148.47 points, or 0.5%, to close at 30069.79 but the technology-heavy Nasdaq Composite gained 55.71 points, or 0.4%, to 12519.95, notching a record.

Back home, the FBM KLCI managed to eke out a 0.06% or 1.04- point gain, rising to 1,622.89. The regional indices were mostly in the red. In Japan, the Nikkei 225 was down by 0.76% or 203.8 points at 26,547.44. Meanwhile, the Shanghai Composite finished lower at 3,416.6 after falling 0.81% or 27.98 points, whereas the Hong Kong Hang Seng concluded the trading day 1.25% or 334.94 points lower at 26,500.98. However, in South Korea, the Kospi was up by 0.51% or 13.99 points at 2,745.44. Data released on Monday showed the country’s exports grew in November at their fastest pace this year, which pushed China’s trade surplus to its highest-ever monthly level.

Source: PublicInvest Research - 8 Dec 2020

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