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PublicInvest Research

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

 

PublicInvest Research Headlines - 24 Feb 2021

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Economy

US: Consumer confidence rises to three-month-high in Feb . US consumer confidence rose in Feb to a three-month-high as Americans grew more upbeat about the current labor market and economy’s progress. The Conference Board’s index of sentiment increased to 91.3 from a revised 88.9 reading in Jan, according to a report. The gauge of sentiment about current conditions rose to 92 from 85.5 in Jan, while a measure of expectations fell. The improvement in sentiment comes as Democrats in Congress race to pass a USD1.9trn economic stimulus package, which includes additional aid checks and expanded unemployment benefits. Vaccine distributions continue to ramp up with over 40m Americans having received at least one dose. (Bloomberg)

US: Powell signals Fed to keep buying bonds even as outlook improves . Federal Reserve Chairman Jerome Powell signaled that the central bank was nowhere close to pulling back on its support for the pandemic-damaged US economy even as he voiced expectations  for a return to more normal, improved activity later this year. “The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” he said in the text of testimony to be delivered to the Senate Banking Committee. The Fed is currently buying USD120bn of assets per month -- USD80bn of Treasury securities and USD40bn of mortgage-backed debt -- and has pledged to keep up that pace “until substantial further progress” has been made toward its goals of maximum employment and 2% inflation. (Bloomberg)

UK: British retailers expect sales to fall next month: CBI . UK retailers expect sales to fall sharply next month, according to the Distributive Trades Survey results from the Confederation of British Industry. A net balance of 45% said sales declined in the year to Feb compared to -50% in Jan. However, a net 62% forecast sales to decline further in March. The retail order balance came in at -36 versus -45% in Jan. A net 59% expects another deterioration in the year to March. Among retailers, only grocers registered any growth in volumes in Feb, with non-store sales flat and other retail sectors reporting sharp declines. (RTT)

UK: Unemployment rate near 5 year-high . The UK unemployment rate rose to a near five-year high in the fourth quarter as the coronavirus pandemic continued to weigh on the labor market amid the ongoing tight restrictions. At 5.1%, the jobless rate was the highest since 2016, data from the Office for National Statistics revealed. The rate was 0.4%age points higher than the previous quarter and matched economists' expectations. At the same time, the employment rate dropped 0.3%age points from the prior quarter to 75.0%. The number of people looking for jobs increased by 121,000 sequentially, while employment declined by 144,000. (RTT)

Singapore: Consumer prices rise in Jan. Singapore's consumer prices rose in Jan, data from the Monetary Authority of Singapore and the Ministry of Trade and Industry showed. The consumer price index rose 0.2 YoY in Jan, after remaining unchanged in Dec. This was in line with economists' expectations. This latest consumer prices outcome was largely due to a rise in core inflation and prices for private transportation cost, and accommodation inflation. MAS core CPI, which excludes costs of accommodation and private road transport, fell 0.2% annually in January, following a 0.3% decrease in the preceding month. (RTT)

Australia: Exports decline in Jan. Australia's exports declined in Jan largely due to a fall in iron ore shipments, preliminary data from the Australian Bureau of Statistics showed. Exports fell 9% on month in Jan. Shipment of metalliferous ores dropped 10% and that of meat declined 39%. At the same time, coal exports were down 8%. Imports decreased 10% from the previous month. Data showed that road vehicle imports slid 23%, the first decline since May. Imports of general industrial machinery were down 16% and that of miscellaneous manufactured articles decreased 13%. (RTT)

Indonesia: Finance ministry lifts pandemic recovery budget again. Indonesia's government had increased its budget to control the coronavirus pandemic and help the economy recover to IDR699.43trn (USD49.6bn), a Finance Ministry presentation showed. "This is the most important engine in our economy right now," Finance Minister Sri Mulyani Indrawati said during the virtual presentation. The budget has been increased several times from an initial IDR372.3trn figure and the new figure marks a 21% increase from realised pandemic spending last year. (Reuters)

Markets

Genting Malaysia (Neutral, TP: RM2.20): Resorts World Genting invests over USD800m in Genting SkyWorlds. Genting Malaysia’s Resorts World Genting (RWG) has spent over USD800m on the long-awaited theme park. Genting SkyWorld, which is targeted to be ready and open to the public by the mid of this year, is now in the final stages. (The Edge)

AT Systematization: Inks agreement to supply 30m boxes of nitrile gloves. AT Systematization inked an agreement with Kenteam SB (KSB) to manufacture and supply nitrile examination gloves. It has reached an agreement to supply 30m boxes of nitrile examination gloves for a period of 12 months and allocate 10 production lines to KSB. (The Edge)

Nestle Malaysia: Plans big new investments in 2021. Nestle (Malaysia) plans to allocate significant fresh investments to expand and upgrade its manufacturing facilities. This comes after Nestle Malaysia saw its net profit fall 17.86% to RM552.71m in the year ended Dec 2020 from RM672.91m net profit previously. The group revenue had fallen 1.99% to RM5.41bndue to Covid- 19 especially during the first haf of 2020. (Business Times)

Hong Seng: Partners Hong Kong company to explore healthcare opportunities. Hong Seng Consolidated entered into a cooperation framework agreement with Fosun Trade Co Ltd to jointly cooperate and collaborate to explore business opportunities in the healthcare sector in Malaysia. The agreement is valid for one year. (SunBiz)

Frontken: Posts record net profit in 4Q and FY20, declares 2.8 sen dividend, proposes bonus issue. Frontken Corp has registered a record net profit of RM23.29m in the 4QFY20, 28% higher than RM18.2m a year ago, due to improved revenue and better profit margin resulting from continual efforts to improve efficiency across the group. EPS rose to 2.22sen, from 1.74sen in 4QFY19. (The Edge)

Petronas Gas: 4Q net profit up 3.7% to RM503.35m. Petronas Gas (PetGas) net profit for the 4Q ended Dec 31, 2020 grew 3.7% to RM503.35m with higher contribution from utilities, regasification and gas processing segments, due to lower operating costs, complemented by higher share of profit from joint ventures. The group recorded higher revenue by 1.2% at RM1.39bn from RM1.37bn. (SunBiz)

Takaful Malaysia: 4Q net profit up 37%. Syarikat Takaful Malaysia net profit for the 4Q ended Dec 31, 2020 jumped 37% YoY to RM103.15m mainly attributable to savings from management expenses and release of expense reserve. However, its revenue dropped 1% to RM774.94m mainly attributable to lower investment income. For the full year, the group’s net profit dropped 1% to RM362.42m. (SunBiz)

SunCon: Earnings, revenue ease in 2020. Sunway Construction Group (SunCon) net profit fell 43.7% to RM72.79m for the year ended FY20 from RM 129.32m in 2019. Revenue decreased 12.4% to RM1.55bn in FY20 from RM1.77bn in 2019, due to the fall in its construction and precast segment. For the 4Q, SunCon's net profit fell to RM30.2m from RM31.64m previously. (Business Times)

Market Update

The FBM KLCI might add a few points at opening today after US stocks clawed back losses to end a wild trading day higher after Federal Reserve Chairman Jay Powell signalled he had no immediate plans to change monetary policy despite the rising growth and inflation expectations that have been roiling markets. The benchmark S&P 500 gained 0.1%, reversing losses that had pushed the index 1.8% lower earlier on Tuesday. The technology focused Nasdaq Composite went on an even wilder ride, sliding as much as 3.9% in early trading before recovering to end down just 0.5%. Tech stocks have sold off sharply since last week as investors tried to price in the risk that faster inflation and rising long-term interest rates could pose to record-high equity market valuations. At the end of Tuesday’s session, some tech darlings had bounced back, with Amazon and Google-parent Alphabet ending the day in positive territory. High-flyers such as Tesla and Square still closed lower, however, and the rotation away from faster-growing companies weighed on many stocks that had benefited as consumers stayed at home during the pandemic. London’s energy-biased FTSE 100 benchmark eked out a small 0.2% gain as oil prices and other commodities hovered near recent highs. Brent crude, the global benchmark, settled 0.2% higher at USD65.37 a barrel. Germany’s Xetra Dax, meanwhile, was off 0.6%.

Back home, the FBM KLCI Index continued to end lower following declines in its glove maker constituents, in contrast with other regional bourses trending higher in anticipation of insights from the US Federal Reserve. The local benchmark index closed 0.34% or 5.41 points lower at 1,565.05, following declines in Hartalega Holdings Bhd, Top Glove Corp Bhd and Supermax Corp Bhd. In the region, Japan's Nikkei 225 finished 0.46% or 138.11 points higher at 30,156.03, while Hong Kong's Hang Seng closed 1.03% or 312.81 points higher at 30,632.64. That being said, the Shanghai Composite was down 0.17% or 6.09 points at 3,636.36. The sell-off was prompted by concerns that the country’s rapid economic recovery from the Covid-19 pandemic could bring on the removal of policy support for asset prices.

Source: PublicInvest Research - 24 Feb 2021

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