PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 22 Apr 2019, 10:09 AM


PublicInvest Research Headlines - 5 Jun 2018

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US: Weak demand for aircraft hurts factory orders. New orders for US-made goods fell more than expected in April, weighed down by declines in demand for transportation equipment and machinery, but the underlying trend continued to suggest strong momentum in the manufacturing sector. Factory goods orders decreased 0.8%, the Commerce Department said. (Reuters)

EU: Euro zone investor morale falls on Italy fears, US trade dispute. Investor morale in the euro zone deteriorated for the fifth month in a row in June to its lowest level since Oct 2016, hit by concerns about an anti-establishment government taking power in Italy and a trade dispute with the US Sentix’s index for the euro zone fell to 9.3 from 19.2 in May. The fall was due to investors’ weaker assessment of current conditions and lower economic expectations, which fell to their lowest level since Aug 2012. (Reuters)

UK: Consumers headed to stores in sweltering May. UK consumer spending grew strongly last month as the warmest May on record saw shoppers flock to the stores in droves. Spending increased 5.1% from a year earlier, the most since April 2017, Barclaycard said. In a separate report, the British Retail Consortium said total sales jumped 4.1%, the biggest gain since Jan 2014 when distortions caused by the timing of Easter are excluded. (Bloomberg)

China: Revives global yuan push as capital outflow worries fade. After more than two years on the back-burner, there are signs that China is once again focusing on its efforts to increase the yuan’s status in global finance. Since May, initiatives from the central bank and government have included: i) starting full operation of a new phase of an international payment system, extending its running hours, ii) Making it easier for overseas lenders to borrow the yuan, to help facilitate foreign investments in onshore bonds and stocks, and iii) signaling the resumption of a program for mainland investors to buy offshore assets with the yuan that’s been on ice since 2015. (Bloomberg)

Malaysia: Manufacturing PMI sinks to 47.6. The manufacturing sector in Malaysia continued to contract in May, and at a faster rate, the latest survey from Nikkei revealed with an 11-month low manufacturing PMI score of 47.6. That's down from 48.6 in April, and it moves farther beneath the boom-or-bust line of 50 that separates expansion from contraction. Individually, there were faster contractions in both output and new business, while input cost inflation fell to its weakest rate since Oct 2016. (Markit Economics)


SP Setia (Outperform, TP: RM4.50): Expects property market to improve. Property developer SP Setia expects the country’s property market to return to growth after the GST was zero-rated from June 1. Its president and CEO Khor Chap Jen hopes the zero-rating of GST would improve buying sentiment, especially among the young and first-time homebuyers. He also announced that SP Setia would be launching Setia Fontaines, a new township development project in Bertam, Penang, at the end of this year. (The Edge)

LBS Bina (Outperform, TP: RM1.31): To go ahead with Zhuhai project. LBS Bina will not be holding back on its development project to transform the Zhuhai International Circuit in China although the joint development deal with NWP Holdings has lapsed. The company’s managing director Tan Sri Lim Hock San told EdgeProp.my that both LBS Bina and NWP Holdings are unable to come to an agreement with regard to certain terms in the Definitive Agreement. He also gave assurance that the project will not be put on hold because of the termination of the partnership. (The Edge)

WCT (Neutral, TP: RM1.00): Withdraws share options for independent directors proposal. WCT Holdings has withdrawn a proposal to grant share options to its independent non-executive directors from being put forward for voting in AGM. The decision was made after taking into consideration feedback received from shareholders and stakeholders, and in consultation with the independent non-executive directors. The independent non-executive directors are Tan Sri Marzuki Mohd Noor, Datuk Ab Wahab Khalil, Datuk Ng Sooi Lin and Ng Soon Lai. (The Edge)

Wah Seong (Neutral, TP: RM1.64), Handal: Wah Seong CEO Chan raises stake in Handal to 10.5%. Wah Seong CEO Chan Cheu Leong has increased his stake in Handal Resources to 10.54%. It showed Chan had acquired 200,000 shares on June 1, thus upping his stake in Handal to 16.83m shares, representing a 10.54% stake. Handal provides maintenance and services for the oil and gas sector. In Handal’s annual report, he was listed as a shareholder as of Mar 31, 2018, with a 4.99% stake. Subsequently, he became a substantial shareholder on May 16. (The Edge)

Berjaya Land: Exits long-delayed Vietnam financial centre project. After nearly a decade of delays in project execution, Berjaya Land (BLand) decided to call it a day. The property group is divesting its investment in a Vietnamese financial centre project at a loss. IBLand said it is selling off the entire 32.5% of total capital contribution in Berjaya Vietnam Financial Center Ltd (BVFC Ltd) to local firms Vinhomes Joint Stock Co and Can Gio Tourist City Corp for RM154.86m cash. (The Edge)

Cymao: To sell industrial land for RM12m cash, more than half its market cap. Cymao Holdings will dispose of 2 parcels of industrial land for RM12m cash, which is more than half its market capitalisation at the moment. Cymao Plywood SB has entered into a sale and purchase agreement with South Pacific Fish Processing SB for the disposal. This was a result of the closure of Cymao Plywood’s mill, which will enable the group to unlock the value of land and availability of additional funds for working capital requirements of the group. (The Edge)

Market Update

The FBM KLCI may open higher today as global stocks started the week on a positive note, with the Nasdaq Composite index closing at a record high, as Italy’s more stable political situation and renewed signs of strength in the US economy allowed investors to look beyond concerns about a global trade war. Italian and Spanish government bonds extended their recovery following a steep sell-off at the start of last week, while their “core” counterparts in the US, UK and Germany gave back some of their recent price gains. On Wall Street, the S&P 500 index rose 0.5% to 2,746, while the tech-heavy Nasdaq Composite ended 0.7% higher at a record closing peak of 7,606. The small-cap Russell 2000 also ended at a record as it inched up 0.2% while the Dow Jones Industrial Average rose 0.7% to 24,813. Across the Atlantic, the Euro Stoxx 600 index rose 0.3% as London’s FTSE 100 rose 0.5% and the Xetra Dax in Frankfurt gained 0.4%.

Back home, the FBM KLCI index lost 1.21 points or 0.07% to 1,755.17 points. Trading volume decreased to 2.77bn worth RM2.82bn. Market breadth was positive with 477 gainers as compared to 444 losers. The regional markets finished broadly higher today with shares in Hong Kong leading the region. The Hang Seng was up 1.66% while Japan's Nikkei 225 added 1.37% and China's Shanghai Composite tacked on 0.52%.

Source: PublicInvest Research - 5 Jun 2018

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