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Author: PublicInvest   |   Latest post: Fri, 16 Aug 2019, 11:01 AM


PublicInvest Research Headlines - 11 Jul 2018

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US: Moves forward on proposed USD200bn China tariff list. The Trump administration pushed ahead with plans to impose tariffs on additional USD200bn in Chinese products by releasing a list of targets, marking a sharp escalation in a trade war between the world’s two largest economies. The tariffs could take effect after public consultations end on Aug 30, according to a statement from the US Trade Representative’s office Tuesday. The proposed list of goods includes consumer items such as clothing, television components and refrigerators as well as other high-tech items, but it omitted some high profile products like mobile phones. The US said it had no choice but to move forward on the new tariffs after China failed to respond to the administration’s concerns over unfair trade practices and Beijing’s abuse of American intellectual property, according to two senior officials who spoke to reporters. High-level talks between the two countries starting in May failed to deliver a breakthrough to head off a trade war. (Bloomberg)

US: Job openings eased from a record to 6.64m in May. US job openings cooled in May from a record to a level that’s still consistent with a tight job market that’s encouraging more Americans to voluntarily leave their positions for better opportunities, Labor Department data showed Tuesday. Number of positions waiting to be filled dropped by 202k to 6.64m (est. 6.62m) from an upwardly revised 6.84m in April, according to Job Openings and Labor Turnover Survey or JOLTS. Hiring climbed to 5.75m from 5.58m. Hiring rate rose to 3.9% from 3.8%. The elevated number of job postings is in sync with the continuing broad trend of job-creation at a pace that’s helping to absorb remaining slack in the labor market. March had marked the first time in JOLTS data back to 2000 that vacancies exceeded the number of unemployed, and the gap is widening as hiring stays strong. (Bloomberg)

US: Americans quit like never before as job market confidence surges. Americans’ confidence in employment prospects is soaring as the labor market tightens. The latest proof: A record number are voluntarily quitting to seek better jobs. Some 3.56m workers left positions in May, the most in data back to 2000, and up from the prior month’s 3.35m, Labor Department data showed Tuesday. That pushed up the quits rate, which measures quitters as a share of employed people, to a 17-year high of 2.4% from 2.3%. With more workers feeling assured of finding better employment, sustained wage gains may soon follow. The latest jump is sure to be closely watched by Federal Reserve policy makers as they monitor for signs of upward pressure on worker pay that may feed overall inflation. In another bullish sign, the gap between vacancies and the number of unemployed widened to 573,000 in May, a sign there’s potentially work available for every jobless person in America. (Bloomberg)

EU: Trade tensions turn into mood killer for investors in Euro area. Investors’ confidence in the euro area and Germany took another knock as the escalation of trade tensions between the US and many of the world’s major economies cast a cloud over improving data. The ZEW Center for European Economic Research said its measure of investor expectations for Germany fell to minus 24.7 in July from minus 16.1 in June, recording a fifth straight decline. A gauge for the euro area also plunged. Both are at levels not seen since 2012, when the region was mired in a crippling debt crisis. The downbeat assessment comes after more recent economic data from Germany suggested Europe’s largest economy is beginning to stabilize, with factory orders, industrial output, and service-sector activity all improving. However, there’s no ignoring the threats, particularly the ramping up in protectionism that took another major step last week, when US tariffs on USD34bn of Chinese imports came into force and China immediately retaliated. (Bloomberg)

EU: ECB is said to spar with governors on far-reaching conduct plan. The European Central Bank has a battle on its hands over new conduct rules for Governing Council members, some of which are seen as too intrusive. Drafts circulated by the Frankfurt-based ECB to national central banks have sparked concern among some governors, according to people familiar with the matter. They view the proposals as too far reaching or simply unrealistic, said the people, who asked not to be identified because the debate is private. The new rules are aimed at harmonizing codes of conduct for decision-makers at the ECB -- there are currently separate versions for the Executive Board and the Supervisory Board, as well those covering governors of national central banks. The Governing Council is set to discuss the issue at its July 11 non-policy meeting, said the people. (Bloomberg)

UK: Growth rebounds from bleak winter, consumer spending jumps. The UK economy is bouncing back from a near standstill in the first quarter and a summer boost to consumer spending is supporting the pickup. GDP increased 0.2% in the three months through May, the Office for National Statistics said in its first publication of rolling monthly growth figures. In May alone, output gained 0.3%, while a report from Barclaycard showed household spending rose at the fastest annual pace in more than a year in June. The figures support Bank of England Governor Mark Carney’s argument that the slump at the beginning of the year was temporary and weather related. Policy makers are considering whether to raise interest rates as early as next month if evidence suggests the UK expansion is fast enough to stoke domestic inflation pressures. (Bloomberg)


Top Glove (Trading Sell, TP: RM9.65): Initiates arbitration against Adventa Capital in Singapore. Top Glove Corp and its wholly-owned subsidiary Top Care SB have initiated arbitration proceedings against Adventa Capital Pte Ltd in Singapore, claiming RM714.86m in damages and losses suffered. This follows the allegedly fraudulent misrepresentation made by Adventa Capital to induce Top Glove and Top Care into entering a share purchase agreement in April. The world's largest manufacturer of gloves was replying to a Bursa Malaysia query. (The Edge)

Pestech: Gets nod to list unit in Cambodia. Pestech International has received Cambodia's approval to list its unit Pestech (Cambodia) PLC on the Main Board of Cambodia Securities Exchange. Pestech, which is involved in power transmission infrastructure, said it had received the approval-in-principle for the proposed listing from the Securities and Exchange Commission of Cambodia (SECC). The SECC said Pestech Cambodia would have to appoint an independent director, establish an audit committee, a risk management committee and an internal audit unit. (StarBiz)

MAHB: See 9.7% spike in passenger traffic in June. Malaysia Airports Holdings (MAHB) saw 9.7% more passengers pass through the 39 airports it manages in the country in June this year at 8.38m, from 7.64m a year ago. This is the highest growth registered for a month in 2018. International and domestic passenger traffic grew by 8.3% and 11.1% to 4.21m and 4.17m respectively in June 2018 from 3.88m and 3.76m respectively in June 2017. Overall aircraft movements also increased by 4.1% YoY, with international movements up 5.9% while domestic rose 3% over June 2017. Average load factor increased by 1.2 ppts to 75.9% in June 2018 over June 2017. (The Edge)

Multi Sports: Clarifies confusion over SC reprimand. Multi Sports Holdings Ltd has clarified that the reprimand it received from Securities Commission Malaysia (SC) for knowingly furnishing financial statements that were false or misleading to Bursa Malaysia was related to five quarterly earnings. The Practice Note 17 (PN17) shoe manufacturer said the five quarterly earnings were for 1Q15, 2Q15, 3Q15, 4Q15 and 1Q16, which were prepared and submitted prior to the appointment of new directors on Oct 4, 2016. "The new directors, in the course of their investigation, had discovered information on litigation in China involving the subsidiaries of Multi Sports and SC relates to these litigations," Multi Sports said.

Construction (Neutral): Prasarana must “drastically” cut LRT 3 total cost, says Guan Eng. Finance Minister Lim Guan Eng says Prasarana Malaysia must “drastically” reduce the cost of the Light Rapid Transit line 3 (LRT 3) project to ensure its viability. He said the total cost of project is now estimated at RM31.45bn. “The Ministry of Finance will not support any additional funding required for the project unless the cost of the LRT3 project is significantly rationalised without compromising on the integrity of the rail network as well as the safety and the quality of service provided,’ Lim said. (StarBiz)

Market Update

The FBM KLCI might open higher today after Wall Street stocks closed higher for the fourth consecutive session amid hope that upcoming corporate earnings will be upbeat enough to keep attention away from the international trade dispute. The rally showed signs of faltering in the New York afternoon, with the tech heavy Nasdaq Composite index coming under pressure. Other major benchmarks also came off their highs but rebounded later in the afternoon, with the Nasdaq returning to positive territory by ending marginally higher by 0.04%. The Dow Jones Industrial Average closed 0.6% higher while the S&P 500 finished up 0.4%. In Europe, Frankfurt’s Xetra Dax 30 ended the day 0.5% higher, with the Europe-wide Stoxx 600 up 0.4%.

Back home, the FBM KLCI index gained 14.50 points or 0.87% to 1,687.13 points on Tuesday. Trading volume decreased to 1.99bn worth RM2.24bn. In the region, Tokyo’s Topix gained 0.3%, while in Hong Kong the Hang Seng ended the day flat. Sydney’s S&P/ASX 200 finished down 0.4% after briefly rising to its highest point in 10½ years.

Source: PublicInvest Research - 11 Jul 2018

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