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PublicInvest Research

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

 

PublicInvest Research Headlines - 7 Jan 2021

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Economy

US: Factory orders jump 1.0% in Nov, more than expected. A report released by the Commerce Department showed new orders for US manufactured goods increased by more than expected in Nov. The Commerce Department said factory orders surged up by 1.0% in Nov after jumping by an upwardly revised 1.3% in Oct. The report said durable goods orders advanced by 1.0% in Nov following a 1.8% spike in Oct, with orders for transportation equipment helping to lead the way higher. Orders for non-durable goods also increased by 1.1% in Nov after climbing by 0.8% in Oct. The Commerce Department said shipments of manufactured goods also rose by 0.7% in Nov after jumping by 1.2% in Oct. Inventories of manufactured goods also climbed by 0.7% in Nov following a 0.3% uptick in Oct. (RTT)

US: Private sector employment unexpectedly drops for first time since April. With the impact of the coronavirus pandemic on the labor market intensifying, payroll processor ADP released a report showing an unexpected drop in private sector employment in the US in Dec. ADP said private sector employment fell by 123k jobs in Dec after jumping by a downwardly revised 304k jobs in Nov. The decrease surprised economists, who had expected employment to climb by about 88k jobs compared to the addition of 307k jobs originally reported for the previous month. (RTT)

EU: Producer prices fall further in Nov. Eurozone producer prices declined further in Nov, data from Eurostat showed. The PPI decreased 1.9% YoY in Nov, after a 2.0% fall in Oct. Economists had forecast a fall of 2.2%. Excluding energy, producer prices remained unchanged in Nov, after a 0.2% fall in Oct. Prices of energy declined 7.5% annually in Nov and that of intermediate goods decreased 0.6%. Non-durable consumer goods prices edged down 0.1%. Meanwhile, durable consumer goods prices rose 1.2% and capital goods prices grew 0.8%. On a MoM basis, producer prices rose 0.4% in Nov, the same as seen in Oct. (RTT)

UK: Car sales sees toughest year since 1992 – SMMT. The UK new car market declined by almost a third in 2020 with demand falling the most since 1992, the Society of Motor Manufacturers and Traders (SMMT) reported. New car registrations declined 29.4% to 1.63m in 2020. This was the toughest year for the market since 1992, the lobby said. According to SMMT, there was a 680,076-unit decline equivalent to GBP20.4bn in lost turnover in 2020. In Dec, car sales fell 10.9% YoY to 132,682. (RTT)

China: Services sector expands at a slower pace — Caixin PMI. China's services sector activity expanded at a slower pace in Dec, a private sector survey showed, as sporadic coronavirus outbreaks tempered the recovery in consumer confidence and weighed on new business growth. The Caixin/Markit services PMI eased to 56.3, a three-month low, in Dec from 57.8 in Nov. A sub-index for new business stood at 54.3, down markedly from 58.7 the previous month, the survey showed. Growth in new export business, which only returned to expansion in Nov, eased as a surging pandemic restrained overseas demand. (Reuters)

Japan: Service-sector activity falls for 11th month in Dec. Activity in Japan's services sector extended its run of declines to the 11th month in Dec, a private sector survey showed, as a new wave of coronavirus infections led to a contraction in business conditions. The data comes after Japan's government in Dec cut its view on private consumption, which contributes about 55% of the country's GDP, as sectors such as domestic tourism were showing weakness. (Reuters)

India: Services sector loses more steam in Dec, job cuts resume. Growth in India's dominant services industry continued to lose momentum in Dec as a resurgence in coronavirus infections weighed on new business and employment, a private survey showed. It has been gradually recovering from a coronavirus-induced recession but is not expected to return to pre-pandemic levels soon, especially within the service industry — the engine of economic growth and jobs in the country. The Nikkei/IHS Markit Services PMI fell to 52.3 in Dec from Nov’s 53. ”A spike in Covid-19 cases was reported as a key factor restricting growth of new work intakes among service providers, which in turn curbed the rise in output and led to increased business uncertainty about the outlook," IHS Markit said. (Reuters)

Markets

Yong Tai (Neutral, TP: RM0.28): Inks deal with Tiong Nam for Covid-19 vaccine distribution. Yong Tai signed up Tiong Nam Logistics Holdings to provide distribution services for the vaccine. Under the deal, Tiong Nam’s subsidiary Tiong Nam Logistics Solutions Sdn Bhd will provide logistics services, which also include transportation and warehouse space storage for the vaccine. (The Edge)

Top Glove (Trading Buy, TP: RM7.30): BlackRock voted against re-election of Top Glove independent directors amid foreign worker issue. BlackRock, which holds a 1.61% stake in Top Glove Corp, voted against the election of six independent directors at the rubber glove maker's AGM , as it is of the view that the board had failed in its duty to mitigate the issues of migrant workers' health and safety. The six independent directors are Datuk Lim Han Boon, Datuk Noripah Kamso, Datuk Norma Mansor, Tan Sri Rainer Althoff, Sharmila Sekarajasekaran and Lim Andy. (The Edge)

LBS (Trading Buy, TP: RM0.55): Plans to launch RM2.65bn GDV of projects in 2021. LBS Bina Group plans to launch projects worth an accumulated GDV of RM2.65bn this year. The group continues to adapt to new norms and shift its marketing strategies through digital platforms. New developments in the pipeline in the Klang Valley include new phases at the KITA @ Cybersouth township in Dengkil which consist of serviced apartments, single- and double-storey terraced houses and town houses. (The Edge)

AwanBiru: Partners Huawei to promote cloud, AI adoption. AwanBiru Technology has signed a MoU with Huawei Technologies SB to promote the adoption of cloud and artificial intelligence products and services in the public sector. It said in a statement that the collaboration will drive the adoption of Huawei Cloud products and Services at both the federal and state levels as well as among Malaysia's statutory bodies, government-linked companies and commercial organisations. (StarBiz)

Metronic: Unit's MoA with MVC terminated. Metronic Global’s subsidiary, Metronic Medicare SB, and Taiwan-based Medigen Vaccine Biologics Corporation (MVC) have mutually agreed to terminate their memorandum of agreement (MOA) on the exclusive distribution rights for MVC’s COVID-19 vaccine. Metronic Global said the MOA was terminated as the company had not paid the deposit totalling USD1.5m to MVC within the agreed timeframe. (Bernama)

Techfast: To diversify into petroleum trading and oil bunkering. Techfast Holdings plans to diversify into petroleum trading and oil bunkering by acquiring a 35% stake in a company that supplies marine fuels. The group said it is buying the stake in CCK Petroleum SB from Kuah Choon Ching for RM26.25m, of which RM16.17m will be paid in cash and the balance via the issuance of 23.44 new Techfast shares at 43 sen per share. It added that Kuah has issued a profit guarantee of RM10m for CCK Petroleum in FY21 and FY22. (The Edge)

Censof: Bags RM10m contract from MoF. Censof Holdings has bagged a RM10.12m contract from the Ministry of Finance to undertake the provision of maintenance and support services for the latter's budget management information system, MYResults. (The Edge)

MARKET UPDATE

The FBM KLCI might open with a positive bias today after the Dow and the S&P 500 ended higher, soaring to all-time highs on Wednesday, as investors piled into financial and industrial stocks on bets a Democratic sweep in Georgia would lead to more fiscal stimulus and infrastructure spending. But Wall Street pared earlier gains and the Nasdaq index closed lower after swarms of protesters stormed the US Capitol on Wednesday as they sought to force Congress to undo President Donald Trump’s election loss to Joe Biden. Lawmakers evacuated after Trump supporters breached the building as police officers stood watch. Some police responded with drawn guns and tear gas. The Dow Jones Industrial Average closed 437.8 points higher, or 1.44%, to 30,829.4, the S&P 500 gained 21.28 points, or 0.57%, to 3,748.14 and the Nasdaq Composite dropped 78.17 points, or 0.61%, to 12,740.79. The pan-European STOXX 600 index rose 1.36%.

Back home, the FBM KLCI closed below the 1,600 level, after being in the negative territory throughout the trading session in line with weaker regional markets. The benchmark index closed 16.38 points or 1.02% lower at 1,591.97 after touching an intraday low of 1,586.25. In the region, South Korea’s Kospi closed 0.75% lower at 2,968.21, and Japan’s Nikkei 225 closed 0.38% lower at 27,055.94.

Source: PublicInvest Research - 7 Jan 2021

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