PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 26 Jun 2019, 11:18 AM


PublicInvest Research Headlines - 3 Aug 2018

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US: Little change in jobless claims signals strong labor market. Filings for U.S. unemployment benefits were little changed last week, hovering close to a five-decade low that underscores a tight job market, Labor Department figures showed Thursday. Jobless claims edged up by 1k to 218k. Continuing claims fell by 23k, biggest drop since June 2, to 1.72m in week ended July 21 (data reported with one-week lag). (Bloomberg)

UK: BOE lifts key interest rate in what may be final pre-Brexit push. The BOE raised its benchmark interest rate to the highest level since 2009 in what may be its final blow against inflation before the UK leaves the EU. Governor Mark Carney played down concerns that Brexit may be disorderly and said mounting price pressures warranted Thursday’s quarter-point increase to 0.75%. (Bloomberg)

Japan: Friday’s BOJ bond buy just got bumped up the must watch list. A run-of-the-mill bond-buying operation by the BOJ has now taken on a lot more significance. The central bank is expected to buy 5-to-10 year bonds at 10:10 a.m. on Friday in Tokyo. Having surprised on Thursday with unscheduled purchases worth JPY400bn (USD3.6bn), after the benchmark yield touched an 18-month high of 0.145%, traders are wondering what its plans are for this morning. (Bloomberg)

China: Says US trade pressure won’t work. China fired back after the Trump administration threatened to double proposed tariffs on USD200bn in Chinese goods, saying it won’t yield to White House pressure. “China has been fully prepared and will have to retaliate to defend national dignity and the people’s interests,” the Commerce Ministry said. Officials didn’t specify how it would retaliate. (WSJ)

ASEAN, China: Agree 'milestone' text as basis for South China Sea talks. Southeast Asian nations and China have reached a “milestone” in talks with China over a code of conduct in the South China Sea with a working text that will serve as a basis for future negotiations, Singapore’s foreign minister said. (Reuters)

India: Manufacturing sector’s wimpy sentiment shows pain ahead. A key spoke in the Indian economy’s wheel isn’t feeling the same optimism as the nation’s central bank, which cited strengthening economic recovery and rising inflation expectations as it delivered back to-back interest rate increases. (Bloomberg)


TNB (Outperform, TP: RM17.81): Can use existing infrastructure in potential telecommunication venture. The government hopes that Tenaga Nasional will consider a proposal to venture into telecommunications as a broadband infrastructure provider, thus creating competition in the sector that will benefit consumers. Communications and Multimedia Minister Gobind Singh Deo said the ministry had held a meeting with the utility giant to discuss the role it could play. TNB can use the existing infrastructure in terms of the fibre optic network already laid in the country. (Bernama)

Omesti: Teams up with ViewQwest to offer fibre broadband services. Omesti has teamed up with Singapore-based ViewQwest Group to collaborate in the network services and communications infrastructure space to provide improved Internet service for customers in Malaysia. “We are currently restructuring our network business and this opportunity to partner with ViewQwest provides a good fit for both our companies. In teaming up with ViewQwest, we hope to be able to provide superior personalised customer service and improved uptime,” said Mah Xian-Zhen, Executive Director of Omesti. (The Edge)

Kronologi Asia: Plans to raise up to RM22.84m via private placement. Kronologi Asia plans to raise up to RM22.84m via a placement of up to 10% of its shares to third-party investors. The proceeds, derived from an illustrative price of 63sen per share for the issuance of up to 36.25m new shares, would enable the company to expand its business, without incurring interest costs or service principal repayments, as compared to bank borrowings. From the total proceeds, RM10m will be used for managed services cum transnational infrastructure equipment and RM8m will be used for future business development and expansion. (The Edge)

Toyo Ink: Plans one-for-two free warrants. Toyo Ink Group plans to issue one free warrant for every two shares of the group that are held at an entitlement date to be fixed to reward shareholders. The proposed exercise involves the issuance of up to 53.5m free warrants. The exercise price of the warrant has been fixed at RM1.50 each and represents a premium of 61.32% to the theoretical ex-price of 85.21sen per Toyo Ink share after the proposed free warrants issue, calculated based on the five-day volume weighted average market price of Toyo Ink shares up to July 31, of 52.82sen. (The Edge)

Scomi Group: CEO Shah Hakim resigns, Sammy Tse takes over. Shah Hakim @ Shahzanim Zain has resigned as CEO of Scomi Group to focus on other business commitments. Consequently, his board position as executive director has been redesignated as non independent non-executive director. Besides that, Shah Hakim currently sits on the board of Scomi Energy Services, Scomi Engineering and KMCOB Capital. Shah Hakim started his career as an auditor with Ernst & Young and was then promoted to consulting manager, responsible for servicing large corporations. (The Edge)

F&N: 3Q net profit jumps 51% on higher contribution from Malaysia and Thailand. Fraser & Neave Holdings (F&N) 3Q net profit jumped 51% to RM104.5m, from RM69.37m a year earlier, thanks to positive contributions from Malaysia and Thailand. The EPS for the 3QFY18 rose to 28.5sen, from 18.9sen previously. Revenue however was slightly lower by 1% to RM1.03bn, from RM1.04bn in 3QFY17. Operating profit for its Malaysian food and beverage segment shot up by 102.8%, due to cost savings. (The Edge)

Market Update

The FBM KLCI might open higher today after higher close on Wall Street overnight. A fresh escalation of trade war concerns unsettled Asian and European stock markets although Apple once again provided support for US equity indices as the iPhone maker’s market capitalisation hit USD1trn. President Donald Trump fuelled an early bout of market nerves after he instructed his trade tsar to consider raising proposed tariffs on USD200bn of Chinese imports to 25%, from the 10% announced last month. Indeed, the Chinese currency fell to a 14-month low against the dollar, while Asian stock markets tumbled, with China — not surprisingly — among the hardest hit. The sell-off spread to Europe, with Germany’s export-heavy Xetra Dax index sliding 1.5 per cent, although Wall Street was more resilient. The S&P 500 recouped an early dip, while US technology stocks continued to recover from a sharp recent sell-off. The S&P 500 finished 0.5% higher at 2,827 — having been down as much as 0.6% in early trade — while the Nasdaq Composite rose 1.3%, leaving it 1.6% short of last week’s record high. The more trade-sensitive Dow Jones Industrial Average closed flat. Across the Atlantic, the pan European Stoxx 600 index ended 0.8% lower while the FTSE 100 in London shed 1%.

Back home, the FBM KLCI fell 10.18 points or 0.57% as the US China trade war escalated after the US proposed a 25% tariff on USD200 billion worth of Chinese imports. At 5pm, the KLCI closed at 1,778.13 points. Volume traded was 2.09bn worth RM1.99bn. The regional stock markets took cue from China's share slip. In China, the Shanghai Stock Exchange Composite dropped 2% while Hong Kong’s Hang Seng was down 2.21%. Elsewhere, Japan's Nikkei 225 declined 1.03% while South Korea's Kospi fell 1.6%.

Source: PublicInvest Research - 3 Aug 2018

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