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Author: PublicInvest   |   Latest post: Fri, 7 May 2021, 9:38 AM

 

PublicInvest Research Headlines - 14 Apr 2021

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Economy

US: Consumer prices post biggest gain in 8.5 years as economy reopens. US consumer prices rose by the most in more than 8.5 years in March as increased vaccinations and massive fiscal stimulus unleashed pent-up demand, kicking off what most economists expect will be a brief period of higher inflation. The report from the Labor Department also showed a firming in underlying prices last month as the broader reopening of the economy bumps against bottlenecks in the supply chain, capacity constraints and higher commodity prices. Federal Reserve Chair Jerome Powell and many economists view higher inflation as transitory, with supply chains expected to adapt and become more efficient. The supply constraints mostly reflect a shift in demand towards goods and away from services during the pandemic, now in its second year. The CPI jumped 0.6% last month, the largest gain since August 2012, after rising 0.4% in February. A 9.1% surge in gasoline prices accounted for nearly half of the increase in the CPI. Gasoline prices rose 6.4% in February. (Reuters)

EU: German ZEW economic sentiment falls unexpectedly in April. German economic sentiment deteriorated unexpectedly in April amid the third wave of infections, survey results from the ZEW - Leibniz Centre for European Economic Research showed. The ZEW Indicator of Economic Sentiment fell 5.9 points to 70.7 points from 76.6 in March, while the score was forecast to climb to 79.0. This was the first time that the indicator has experienced a drop since November 2020. However, expectations are still at a very high level, the agency said. Meanwhile, the assessment of the economic situation advanced 12.2 points to minus 48.8 points. The expected  reading was minus 53.0. The financial market experts are somewhat less euphoric than in the previous month, ZEW President Achim Wambach, said. (RTT)

EU: German wholesale prices rise most since 2017. Germany's wholesale price rose for a second straight month and at the fastest pace in four years in March, largely led by higher prices for petroleum products. The wholesale price index rose 4.4% YoY, which was the fastest pace since March 2017, when they increased 4.8%, data from Destatis showed. The wholesale prices grew 2.3% in February and were unchanged in January. Prices for petroleum product jumped 13.7% from a year ago. Strong price increases were also seen for wholesale trade for scrap and residual materials, for ores, metals and semi-finished metal products, and for grain, raw tobacco, seeds and animal feed. Meanwhile, live animals, meat and meat products as well as data processing equipment, peripheral devices and software were cheaper. (RTT)

UK: Economy recovers in February. The UK economy recovered in February despite the coronavirus lockdown restrictions being in place, data from the Office for National Statistics revealed. GDP grew 0.4% monthly, following a revised 2.2% fall in January. Nonetheless, this was slower than the expected growth of 0.6% . February's GDP was 7.8% below the levels seen in February 2020, data showed. In the three months to February, GDP shrank 1.6%, which was worse than a revised 1.4% contraction in the three months to January. The small rise in GDP does suggest that January was probably the low point of the year, Capital Economics said. Vaccinations and the reopening of the economy will combine to trigger a rapid rebound in activity over the next few months, the economist added. (RTT)

China: Exports rise less than expected in March. China's exports logged a double-digit growth in March but at a slower than expected pace, while imports growth exceeded expectations amid rising commodity prices, data from the customs office revealed. Exports increased 30.6% YoY in March, slower than the forecast of 35.5%. The pace of expansion also eased sharply from 60.6% seen in January to February period largely lower base for comparison. Exports to the US advanced 53.3% from last year. Meanwhile, imports advanced 38.1% annually, much faster than the expected growth of 23.3% . Consequently, the trade surplus fell to USD13.8bn and well below economists' expectations of USD52.05bn. Import volume growth is likely to slow as policy support is gradually withdrawn throughout this year and new restrictions to limit the flow of credit to the property sector weigh on investment, Capital Economics said. (RTT)

South Korea: Export prices rise 3.3% MoM in March. Export prices in South Korea were up 3.3% MoM in March, the Bank of Korea said - slowing from 3.5% in February. On a yearly basis, export prices advanced 5.6% after rising just 0.6% in the previous month. Prices for agricultural, forestry and marine product exports rose 0.4% MoM and dropped 8.3% YoY - while prices for manufacturing products gained 3.3% MoM and 5.7% YoY. Import prices were up 3.4% MoM and 9.0% YoY. (RTT) 

Markets

Sapura Energy (Trading Sell, RM0.10): SapuraOMV's inks final investment decision agreement for Jerun gas field. SapuraOMV Upstream has inked a final investment decision (FID) for the Jerun gas field development in Sarawak with its partners, paving the way for the full execution of the project. The Jerun gas field development is the latest and largest operated project and to produce some 500 MMscfd gas. (The Edge)

MMHE: Bags SapuraOMV Jerun contract . Malaysia Marine and Heavy Engineering Holdings (MMHE) has secured a contract from SapuraOMV Upstream (Sarawak) Inc. The contract is to provide the engineering, procurement, construction, transportation & installation, and hook-up & commissioning services (EPCIC) for the SK408W Jerun Development Project, offshore Sarawak. (StarBiz)

UWC: Awarded a 5G product from a key customer. UWC has received a 5G product from a key customer, aptly known as Customer B, to develop and manufacture the world's highest frequency 5G over-the-air (OTA) chamber (5G tester). The 5G tester will provide a measurement environment for characterising wireless and antenna system performance of devices at millimetre-wave frequencies. (Business Times)

LYC Healthcare: Forms subsidiary to expand confinement centre ops in Johor. LYC Healthcare has incorporated a 51%- owned subsidiary to facilitate the expansion of its confinement centre operations in Johor with Singapore O&G Ltd (SOG). LYC intended principal activities were operating confinement centres, mother and child care centres and related services. (The Edge)

BIMB: Confirms placing out 222m shares at RM3.58 apiece, says placement oversubscribed. BIMB Holdings has set the issue price of its private placement shares at RM3.58 apiece, which will raise RM795.55m for the banking group. The placement has been oversubscribed. BIMB said its joint placement agents BIMB Securities SB and Maybank Investment Bank have completed the bookbuilding exercise. (The Edge)

TFP Solutions: Inks dealer agreement with Multimax Creation for fintech solutions. TFP Solutions recently signed a dealer agreement with Multimax Creations SB (MCSB) for the supply of a suite of fintech services, including an e-Wages system to pay foreign workers' salary electronically. Under the signed DA, MSSB will provide a cashless ecosystem to Euronipa Consortium Agropreneur Project. (Business Times)

Jade Marvel: Proposes private placement, one-to-two share split. Jade Marvel Group has proposed to undertake a private placement of not more than 10% of its issued share capital to raise up to RM13.18m. The shares will be issued to third party investors who will be identified later. The issue price of the placement shares will also be determined later. (The Edge)

ConnectCounty: Plans diversification into construction business. ConnectCounty Holdings has proposed to diversify its business to include the undertaking of construction, project management and related activities. It is looking for opportunities that will broaden its earnings base, while reducing its operational costs in order to improve its financial performance. (The Edge)

Market Update

The FBM KLCI might open higher today as a gauge of global shares rose to record highs on Tuesday, led by surging technology-related stocks, as Treasury bond yields eased after US consumer price data for March showed the pace of inflation was not rising wildly. The consumer price index rose 0.6%, the biggest gain since August 2012, as increased vaccinations and fiscal stimulus unleashed pent-up demand. But the data is unlikely to change Federal Reserve Chair Jerome Powell’s view that higher inflation in coming months will be transitory. MSCI’s gauge of equity performance in 50 countries gained 0.38% to an all-time peak, while the pan-European STOXX 600 index closed up 0.12%. On Wall Street, the S&P 500 gained 0.32% as it also set a new intra-day record, while the Nasdaq Composite added 0.92%. The Dow Jones Industrial Average fell 0.22%.

Back home, the FBM KLCI fell 10.71 points or 0.67%, no thanks to the stubbornly high daily new Covid-19 cases in the country. The benchmark index closed at 1,597.71 points after it had been at above 1,600 level for four trading days. Elsewhere in region, Japan’s Nikkei 225 increased 0.72%, while Hong Kong’s Hang Seng was up 0.15%, and South Korea's Kospi grew 1.07%.

Source: PublicInvest Research - 14 Apr 2021

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