PublicInvest Research

Author: PublicInvest   |   Latest post: Thu, 29 Jul 2021, 9:29 AM


PublicInvest Research Headlines - 24 Jun 2021

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US: New home sales tumble to one-year low as prices soar. Sales of new US single-family homes fell to a one-year low in May as the median price of newly built houses soared amid expensive raw materials, including framing lumber. The second straight monthly decline in sales reported by the Commerce Department was the latest indication that the tailwind from the COVID-19 pandemic could be subsiding. Single-family housing benefited from a migration from cities as millions of Americans sought more spacious accommodations for home offices and schooling during the pandemic. New home sales dropped 5.9% to a seasonally adjusted annual rate of 769,000 units last month, the lowest level since May 2020. April's sales pace was revised down to 817,000 units from the previously reported 863,000 units. (Reuters)

US: Fed officials say 'temporary' inflation surge may last longer than thought. A period of high inflation in the US may last longer than anticipated by two US Fed officials, prompting one to pull forward his views on when the central bank should start raising interest rates. Atlanta Fed President Raphael Bostic said with growth surging to an estimated 7% this year and inflation well above the Fed’s 2% target, he now expects interest rates will need to rise in late 2022. That marked a decisive shift from the end of 2020, when 12 Fed policymakers felt that crisis levels of interest rates would need to remain in place into 2024. The difference in the meantime: Vaccines that have driven back the spread of the coronavirus, and an economic reopening that has proceeded faster, and driven inflation higher, than Fed officials anticipated. (Reuters)

EU: Eurozone private sector expands at fastest pace since 2006. The euro area private sector grew at the fastest rate in 15 years in June as the economy re-opened further from virus-fighting restrictions according to flash survey data from IHS Markit. At 59.2, the flash composite output index reached its highest level since June 2006, up from 57.1 in May. The reading was also above economists' forecast of 58.8. Manufacturing continued to lead the upturn, reporting a twelfth successive month of output. Nonetheless, it was the service sector that again reported the biggest improvement in performance. The services Purchasing Managers' Index advanced to a 41-month high of 58.0 in June from 55.2 in the previous month. (RTT)

UK: Private sector logs strong growth in June. The UK private sector logged one of the fastest expansion on record in June as there were marked increases in output across the manufacturing and services sectors as the economy continued to reopen, following the COVID-19 lockdown. The flash composite output index dropped to 61.7 in June from 62.9 in May, data compiled by IHS Markit and the Chartered Institute of Procurement & Supply revealed. The score was forecast to fall slightly to 62.8. The fall in the composite PMI indicates that the pace of the recovery may have peaked, according to Kieran Tompkins, an economist at Capital Economics. Despite the four-week delay to the final easing of restrictions, monthly GDP will return to its Feb 2020 level in Aug. (RTT)

Taiwan: Industrial production growth accelerates in May. Taiwan's industrial production growth accelerated in May driven by robust manufacturing activity, data from the Ministry of Economic Affairs showed. Industrial output advanced 16.51% on a yearly basis, faster than the 14.1% increase seen in April. The annual growth in manufacturing output improved to 17.28% from 14.81% in the previous month. Mining and quarrying grew 4.52% and electricity, gas and water supply output advanced 8.6% . Meanwhile, water supply output was down 4.68%. MoM, industrial production gained 2.25%, reversing a 0.89% fall in April. (RTT)

South Korea: Consumer sentiment improves in June – BOK. Consumer sentiment in South Korea strengthened in June, according to Bank of Korea with a composite consumer sentiment index score of 110.3 - up from 105.2 in May. Consumer sentiment regarding current living standards was unchanged, at 93, while the outlook was two points higher at 95. Consumer sentiment related to future household income was two points higher at 100, while the outlook was five points higher at 113. Consumer sentiment concerning current domestic economic conditions was nine points at 94, while the outlook was 10 points higher at 109. The expected inflation rate for the following year was 2.3%. (RTT)


MAHB: Teams up with Turkish firm for Subang airport regeneration. Malaysia Airports Holdings (MAHB) latest collaboration with Teknopark Istanbul is set to bring innovation and technology leadership to Subang Aerotech Park. The move is part of the plan in fulfilling Sultan Abdul Aziz Shah Airport aspiration to be an aerospace and business aviation hub in the Asia-Pacific. (SunBiz)

Aeon Co: Allocates RM251m for capex, charts digital transformation. Aeon Co (M) has earmarked RM251m for capital expenditure (capex) this year with an emphasis on building a new retail model that integrates its offline and online shopping offerings through digitalisation as a strategic cornerstone. (SunBiz)

Binasat: To venture into solar PV segment via RM18.3m acquisition. Binasat Communications is venturing into the solar photovoltaic (PV) segment via the acquisition of a 51% stake in Borderless Connection SB (BCSB) for RM18.36m. BCSB is involved in the engineering, procurement, construction and commissioning of solar PV facilities. (The Edge)

Lagenda Properties: Buys Kuantan land for RM1bn township project. Lagenda Properties is acquiring a 202.34- hectare land in Kuantan, Pahang for RM33m. The company intends to undertake a self-sustainable township development that offers a diverse mix of affordable housing and commercial buildings. The estimated gross development value is RM1bn, and construction works are expected to start by 2023. (BTimes)

Kejuruteraan Asastera: Inks collaborative agreement to enter Vietnamese renewable energy market. Kejuruteraan Asastera has inked a collaborative agreement with Janakuasa Pte Ltd to enter the renewable energy market in Vietnam. They will form a special purpose vehicle to seek to acquire the majority stakes in three hydropower plant projects with an aggregate installed capacity of 180MW of power. (The Edge)

JHM Consolidation: Partners China’s Jiangsu Dekai Auto Parts. JHM Consolidation has entered into a technical collaboration agreement with Jiangsu Dekai Auto Parts Co Ltd to create an efficient and effective supply chain to support automotive lighting to Proton-Geely companies located in Malaysia. This will propel the group into a Tier 1 player that is able to deal directly with automotive original equipment manufacturers. (The Edge)

DNeX: Shareholders give nod to SilTerra acquisition. Dagang NeXchange (DNeX) has received its shareholders' approval for the proposed acquisition of 60% stake in SilTerra Malaysia SB from Khazanah Nasional for RM163.8m cash. SilTerra manufactures semiconductor wafers that are supplied to multinational fabless and integrated device manufacturer companies. (BTimes)

Sunway: Greenwood Capital buys stake in Sunway Healthcare. Sunway’s unit Sunway Healthcare Holdings SB will be receiving a RM750m investment from Greenwood Capital Pte Ltd, an affiliate of Singapore sovereign wealth fund GIC Private Ltd. The share acquisition collectively gives the Singapore company a 16% equity interest in Sunway Healthcare. (BTimes)

Market Update

The FBM KLCI might open with a negative bias today after US stocks slipped on Wednesday but remained near record highs as investors weighed dovish comments by Federal Reserve officials with business surveys showing companies were struggling with inflation. The S&P 500 slid 0.1%, erasing a marginal advance in the final half-hour of trading. The technology-focused Nasdaq Composite index climbed 0.1%, building on highs hit a day earlier. Shares of smaller companies also rose moderately, with the Russell 2000 index gaining 0.3%. After US central bank officials last week brought forward their projections of the first post pandemic rate rise by a year to 2023, Fed policymakers have moved quickly to soothe fears of a policy mistake that could derail the economic recovery. US service sector and manufacturing activity expanded rapidly in June, an early reading of IHS Markit’s purchasing managers’ index showed, although the gauge dropped from the previous month’s record level. The index, where a reading of 50 separates expansion from contraction, fell to 63.9 from 68.7 in May as businesses suffered from inflationary pressures. In Europe, the region-wide Stoxx Europe 600 closed down 0.7%, but remained close to its high.

Back home, the FBM KLCI closed lower , as investors remained cautious amid concerns over the domestic political and economic situation. The benchmark index finished 0.59% or 9.26 points lower at 1564.76. Most regional bourses rose however, tracking overnight gains on Wall Street, after investors cheered the US Federal Reserve's pledge to not raise rates too quickly. Japan’s Nikkei closed 0.03% lower at 28874.89, South Korea’s Kospi ended 0.38% higher at 3276.19, Hong Kong’s Hang Seng Index finished 1.79% higher at 28817.07, and the Shanghai Composite Index closed 0.25% higher at 3566.2.

Source: PublicInvest Research - 24 Jun 2021

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