PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 15 Nov 2019, 9:19 AM


PublicInvest Research Headlines - 27 Nov 2017

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US: Black Friday, Thanksgiving online sales climb to record high. Black Friday and Thanksgiving online sales in the US surged to record highs as shoppers bagged deep discounts and bought more on their mobile devices, heralding a promising start to the key holiday season, according to retail analytics firms. US retailers raked in a record USD7.9bn in online sales on Black Friday and Thanksgiving, up 17.9% from a year ago, according to Adobe Analytics. (Reuters)

EU: Brexit spurs European banks to trim exposure to UK assets. European banks pared their exposure to Britain in the aftermath of its vote to quit the EU, slashing their UK assets by USD425bn in the span of a year. The decline was driven by a 35% drop in derivatives exposures, showing European banks are preparing for the risk that the UK fails to reach an agreement on its future relationship with the bloc before its departure. (Bloomberg)

India: Traders say delay of billions in tax refunds slows exports. Four months after India’s biggest tax overhaul, traders are still waiting for INR500bn (USD7.7bn) they say the government owes them in refunds, leaving them short of operating capital as overseas sales suffer. India’s exports dipped for the first time in 15 months this Oct, falling 1.1% to USD23.1bn, even as the government tinkered with ways to simplify the hurriedly implemented nationwide goods and services tax. (Bloomberg)

Japan: Factory output seen rebounding in Oct. Japanese factory output is expected to have rebounded while consumer inflation ticked higher in Oct, a Reuters poll showed on Friday, providing upbeat signs for the economy at the start of the fourth quarter. Industrial output probably rose 1.9% compared with Sept, when it fell 1.0%, according to the median forecast of 19 economists. With exports getting a boost from solid global demand, production is likely to continue its recovery, economists say. (Reuters)


Sime Darby (Outperform, TP: RM9.72): Listing reference price for Sime Darby Plantation at RM5.59, Sime Darby Property at RM1.50. The listing reference price for Sime Darby Plantation (SD Plantation) and Sime Darby Property (SD Property) shares have been pegged at RM5.59 and RM1.50 respectively. This was based on the allocation range of 60% to 68% for SD Plantation and a range of 16% to 19% for SD Property as set out in the circular to shareholders of Sime Darby dated Nov 4 and the closing price of Sime Darby shares of RM8.94 last Friday. The adjusted price for Sime Darby shares of RM1.85 when it resumes trading on Nov 30 was calculated as the residual after deducting the listing reference price of SD Plantation and SD Property shares from the last closing price. (The Edge)

Eco World International: To buy popular site in Sydney for RM436m project. Eco World International (EWI) is planning to buy a prime development land some 12 km northwest of Sydney's central business district for an estimated AUD40m, on which it intends to develop a project worth an estimated AUD139m (RM436.17m) in GDV. There is an existing building on the project site with 30 en-block apartment units, and EWI's indirect unit Eco World (Macquarie) Pty Ltd has inked a call and put option deal with owners of 25 of the units to buy their units by way of a collective sale, EWI said. (The Edge)

Damansara Realty: Gets EPU approval for 53-acre Johor land acquisition. Damansara Realty has received the Economic Planning Unit (EPU)’s approval for the acquisition of a 53.14 acres land in Johor for RM130.3m. Damansara Realty said the acquisition forms part of its proposed RM141.5m settlement agreement with Johor state investment arm Johor Corporation (JCorp), allowing it to reduce its net current liabilities and return its balance sheet to health. “The completion will mean a stronger balance sheet for Damansara Realty, slashing our net current liability to RM23m, from RM155m before,” Damansara Realty group CEO Brian Iskandar Zulkarim said. (The Edge)

Eita Resources: Gets RM14m sub-contract to supply 18 lift units. Eita Resources secured a sub-contract worth RM14.46m to supply and install lift systems for a 68-storey office building. Eita said its wholly-owned subsidiary EITA Elevator (M) SB received a letter of award from Synergy Promenade SB to supply and install 18 units of lifts for the said building located on Jalan Perumahan Gurney in KL. Eita said it expects to complete the sub-contract by Sept 9, 2019. (The Edge)

Berjaya Food: Exits loss-making Kenny Rogers business in Indonesia. Berjaya Food (BFood) said its wholly-owned subsidiary Berjaya Food International SB (BFI) has entered into an agreement to dispose of its entire 99.9% stake comprising 13.82m shares in PT Boga Lestari Sentosa to Rudy Wiguna and Komelia Ersan, and to settle a portion of the inter-company debt owing by PT Boga to BFI amounting to IDR9.6bn (equivalent to about RM3.1m). BFood said the disposal provides an opportunity for the group to divest its nonprofitable foreign investment and recover a portion of the intercompany debt. (The Edge)

Market Update

The S&P 500 (+0.2%) and Nasdaq Composite (+0.3%) ended trading last Friday at record-highs again, a day after the Thanksgiving Holiday, with both indices climbing in tandem with commodities and share prices of retail stocks on signs of a strong start to the holiday shopping season. The Dow Jones Industrial Average inched 0.1% higher meanwhile. US crude oil prices settled higher at close to the USD60 per barrel mark on tightening North American supplies as the Keystone pipeline connecting Canadian oilfields with the US was partially closed. All eyes will be on Jerome Powell this coming Tuesday, when his confirmation hearing begins in Washington. Most economists expect the event to go smoothly, but senators will get a chance to probe President Donald Trump’s nominee for Federal Reserve chair on his views on the economy and deregulation. Outgoing Chair Janet Yellen will address the Joint Economic Committee of Congress on Wednesday. European markets also ended the trading day slightly higher with the banking sector outperforming on account of media reports saying that looser rules around bad loan disposals were in the offing. Germany’s DAX, France’s CAC 40 and Spain’s IBEX 35 gained 0.4%, 0.2% and 0.2% respectively as the UK’s FTSE 100 slipped 0.1%. Asian markets are mostly higher earlier in the day though trading volumes remained lackluster amid a clear lack of direction as US markets were closed overnight. The sharp selloff in China abated somewhat, a severity of which caught investors off guard yesterday and left some questioning why authorities decided not to step in this time as they have often done in the past. The Shanghai Composite Index gained 0.1%, the Hang Seng Index rose 0.5% while Singapore’s Straits Times Index popped up 0.6%. The FBM KLCI bucked trends however, slipping 0.2%.

Top Glove Corporation has entered into a term sheet with Adventa Capital Pte Ltd to acquire the entire equity interest in glove manufacturer Aspion Sdn Bhd, a surgical glove manufacturer. Please refer to the accompanying report for more details. Berjaya Food is exiting the Kenny Rogers restaurant business in Indonesia with the disposal of a 99.9% stake in PT Boga Lestari Sentosa. The listing reference price for Sime Darby Plantation and Sime Darby Property shares have been fixed at RM5.59 and RM1.50 respectively. Trading of Sime Darby shares will be suspended today to facilitate the distribution of shares under the group’s demerger exercise.

Source: PublicInvest Research - 27 Nov 2017

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