PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 15 Jun 2021, 10:29 AM


PublicInvest Research Headlines - 11 Feb 2021

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Global: Recovery in trade to stall again in 1Q - UN reports. A recovery in global trade is expected to slow again in the 1Q of 2021 as the coronavirus pandemic keeps disrupting the travel industry after world trade contracted 9% in 2020, a UN report said on Wednesday. After lockdowns caused trade to shrink 15% in the 1H of 2020, it rebounded in the 2H, with global trade in goods up about 8% in the 4Q compared with the 3Q, the UN Conference on Trade and Development (UNCTAD) said. That was largely due to developing countries, particularly those in East Asia, with trade in goods originating from the region up 12% in the 4Q YoY. (Reuters)

US: Powell argues strong labor market requires more than supportive monetary policy. Federal Reserve Chair Jerome Powell said Wednesday that maintaining "patiently accommodative monetary policy" will be important to returning to a strong labor market but argued more needs to be done. Powell cautioned that the US is still "very far" from a strong labor market despite the recovery seen since the early days of the coronavirus pandemic. The published unemployment rate fell to 6.3% in Jan, but Powell said the actual number was close to 10% when factoring in misclassifications by the Labor Department as well as those who have left the labor force since last Feb. (RTT)

US: Wholesale inventories rise more than expected in Dec. Wholesale inventories in the US increased by more than expected in the month of Dec, according to a report released by the Commerce Department on Wednesday. The Commerce Department said wholesale inventories rose by 0.3% in Dec after coming in virtually unchanged in Nov. Economists had expected inventories to inch up by 0.1%. The bigger than expected increase in wholesale inventories came as inventories non-durable goods climbed by 0.6%, while inventories of durable goods crept up by 0.1%. (RTT)

US: Consumer prices rise 0.3% amid continued spike in gas prices. With gasoline prices continuing to spike, the Labor Department released a report on Wednesday showing consumer prices in the US increased in line with economist estimates in the month of Jan. The Labor Department said its consumer price index rose by 0.3% in Jan after edging up by a revised 0.2% in Dec. Economists had expected consumer prices to climb by 0.3% compared to the 0.4% increase. (RTT)

EU: France industrial production falls for second month. French industrial production declined for the second straight month in Dec, data from the statistical office Insee showed on Wednesday. Industrial production decreased unexpectedly by 0.8% MoM in Dec, slower than the 0.7% drop in Nov. Output was expected to rise 0.2%. Manufacturing output dropped 1.7%, in contrast to an increase of 0.7% in the previous month. This was the first decline since April 2020, when output plunged 22.5%. (RTT)

China: Inflation turns negative, PPI rises for first time in a year. China's consumer price inflation returned to negative territory at the start of the year due to seasonal factors, while producer prices climbed for the first time in a year on higher raw material cost, data from the National Bureau of Statistics showed on Wednesday. Consumer prices fell 0.3% on a yearly basis in Jan, reversing a 0.2% rise in Dec. (RTT)


VS Industry (Trading Buy, TP: RM2.97): Temporarily shuts three factories in Senai on MoH orders. VS Industry said that it has received notice from the Ministry of Health of Malaysia (MoH) to temporarily close three of its factories in Senai, Johor for a week to carry out deep cleaning and disinfecting exercise at those affected factories. The factories will be closed from Feb 11 to Feb 17, it said in a stock exchange filing. “The temporary closure of those factories is not expected to have any significant impact to the company’s operations and financial performance,” the group said. (The Edge)

AirAsia Group (Underperform, TP: RM0.39): Fixes price for first tranche of new placement shares at 67.5 sen each . AirAsia Group announced the budget airline has fixed the issue price for the first tranche of its proposed private placement of 668.39m new shares to identified placees at 67.5 sen each under a scheme which allows the company to raise funds expeditiously to mitigate the impact of the Covid-19 pandemic. (The Edge)

Permaju: To buy 30% stake in hardie development, proposes private placement . Permaju Industries entered into a conditional share sale agreement with Chai Kim Chong to acquire 600,000 ordinary shares in Hardie Development SB representing 30% equity interest for RM21.8m. Hardie is an existing 70%-owned subsidiary of Permaju. Permaju has also proposed to undertake a private placement of up to 182,410,000 new ordinary shares representing 30% of its existing total number of issued shares to independent third-party investors to be identified later. (Bernama)

Supermax: Temporary halt to result in less than 1% output loss. Supermax Corp sees no significant impact on revenue and profits following the temporary suspension of its operations in Klang, Selangor after several workers were tested positive for Covid-19 infection. "The company wishes to inform that the temporary shutdown of its manufacturing facility in Meru, Klang, will result in some loss of annual production estimated at less than 1%," it said. (StarBiz)

Texchem: Warns Myanmar coup will impact its ops there . Texchem Resources warned that its operations in Myanmar may be disrupted by the volatile political situation there. In a bourse filing, the diversified conglomerate said one of its divisions has part of its operations in Myanmar. “At this juncture, as Myanmar’s political situation continues to evolve and remain unclear, the company is unable to assess and quantify the impact of Myanmar’s political situation on its operations and will continue to closely monitor the situation in Myanmar and will provide further updates, as and when there are significant developments,” the group said. (The Edge)

NWP: Hauled up for not getting shareholders' nod to pay directors’ fees . NWP Holdings was hauled up by the Companies Commission of Malaysia (SSM) for not getting shareholders’ approval at an AGM for the directors’ fees paid for the financial years ended Aug 31,2017 and 2018. In a filing with Bursa Malaysia, NWP said it had on Jan 26 and Feb 8 received the summons from the CCM for the failure to obtain the approval. “Pursuant to the summons, SSM has charged NWP for failure to obtain its shareholders’ approval at the AGM for the directors’ fees paid for the fFY17 and FY18. (StarBiz)

Market Update

The FBM KLCI might open weaker today after US stocks ended the day marginally lower, as investors spent the day parsing weak consumer price data out of Washington. The blue-chip S&P 500 ended the day less than 0.1% lower while the tech-heavy Nasdaq Composite slid 0.3%. Roughly two-thirds of the companies within the S&P 500 rose, but declines by Tesla, Apple and Amazon weighed on the index. Data out of Washington earlier in the trading day showed core consumer prices were flat for a second consecutive month, as unemployment and social curbs continued to take a toll. European markets also plotted a marginal retreat. The Stoxx 600 benchmark ended the day 0.2% lower. The UK’s FTSE 100 index closed down 0.1%.

Back home, the FBM KLCI finished up 10.72 points or 0.68% at its intraday high of 1,596.85 after an afternoon spike as world equity indices rose with crude oil prices amid optimism about a global economic recovery from the impact of the Covid-19 pandemic. In China, the Shanghai Composite advanced 1.4% to 3,655.09 to close at its highest level since August 2015. This was its last trading day before the Lunar New Year holidays. The distiller Kweichow Moutai, the biggest stock in the index, rallied 5.9% to a record closing high. Hong Kong’s Hang Seng Index rose 1.9% to 30,038.72 by the close of trading, while Japan’s Nikkei 225 gained 0.2% to 29,562.93.

Source: PublicInvest Research - 11 Feb 2021

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