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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 19 Jul 2019, 8:51 AM

 

PublicInvest Research Headlines - 13 Sept 2018

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Economy

US: Producer prices post first drop in one-and-a-half years. US producer prices unexpectedly fell in Aug, recording their first drop in 1- 1/2 years, as declines in the prices of food and a range of trade services offset an increase in the cost of energy products. Despite the surprise weakness in producer prices reported by the Labor Department on Wednesday, overall inflation is steadily rising, driven by a tightening labor market and robust economy. (Reuters)

US: Fed has room to raise interest rates for some time, Brainard says. The Federal Reserve has room to raise interest rates over the next couple of years without slowing economic growth, Fed Governor Lael Brainard said on Wednesday, suggesting that monetary policy would likely continue to tighten for some time. With economic growth strong, unemployment at 3.9% and inflation near the Fed’s 2.0% goal, further gradual interest rate rises are likely to be appropriate over the next year or two, Fed Governor Lael Brainard said. (Reuters)

US: Trump administration steps up communications with China as tariffs loom. The Trump administration has stepped up its communications with China over trade, the White House’s top economic adviser said on Wednesday, as people familiar with the effort said an invitation for a new round of trade talks was sent to Beijing. The invitation from senior US officials led by Treasury Secretary Steven Mnuchin was sent to Chinese counterparts, including Vice Premier Liu He, these sources said. (Reuters)

EU: Eurozone industrial production falls for second month. Eurozone industrial production decreased for the second straight month in July, Eurostat reported Wednesday. Industrial output slid 0.8% MoM in July, the same pace of decline as seen in June. Economists had forecast a moderate drop of 0.5%. All components of industry except energy and capital goods contracted from a month ago. On a yearly basis, industrial production decreased 0.1%, in contrast to a 2.3% rise in June and the expected growth of 1%. (RTT)

UK: Britain to publish next batch of 'no deal' Brexit advice papers. Britain will publish a second batch of papers on Thursday giving the public and businesses advice on coping with disruption in case the country leaves the European Union next year with no deal on future relations with the bloc. Mobile phone roaming charges, environmental and vehicle standards will be among the topics covered by the technical notices, the government’s Brexit department said. (Reuters)

UK: BOE to maintain status quo on rate. BOE policymakers are set to sit tight on interest rate after a unanimous rate hike decision in August. The nine-member Monetary Policy Committee, led by Governor Mark Carney, is widely expected to keep the key rate unchanged at 0.75%. The announcement is due at 7 am ET on Sept 13. The interest rate was raised by a quarter-point at the Aug meeting as members viewed it necessary to bring inflation back to the target. At 2.5% in July, inflation continues to stay above the central bank's 2% target. (RTT)

China: Bank lending falls in Aug. China's bank lending decreased in August, figures from the PBOC showed Wednesday. Banks lent CNY1.28trn loans in Aug. Economists had forecast bank lending to fall to CNY1.37trn from July's CNY1.45trn. However, aggregate financing increased to CNY1.52trn from CNY1.04trn last month. (RTT)

Markets

MAHB: Airport traffic grew 2.9% YoY in August. Malaysia Airports Holdings (MAHB)'s network of airports served 11.78m passengers in August this year, up 2.9% YoY, largely due to growth in passenger movements at its Istanbul Sabiha Gokcen International Airport (SGIA) in Turkey. Its Malaysian airports handled 0.9% more passengers YoY during the month at 8.46m, while SGIA's rose 8.5% YoY to 3.32m. The peak traffic in August was partly due to the summer holidays in Turkey and the Hajj travel season," MAHB said. (The Edge)

Sunway: With partner win condo site tender in Singapore. Sunway and a Singapore company have won the tender to develop a 4.46-acre executive condominium site in the island republic via their SGD271m (RM817.2m) bid. Sunway said the Housing and Development Board of Singapore awarded the land, located in Sembawang, for a 99-year lease term to Hoi Hup Realty Pte Ltd and Sunway Developments Pte Ltd. The joint-venture company will be owned 65% by Hoi Hup and 35% by Sunway Developments, Sunway said. (The Edge)

MyEG: Gets two-year licence to conduct job recruitment activities. MY E.G. Services (MyEG) has been granted a two-year licence to carry out recruitment activities for a job seeker within and outside Malaysia and a non-citizen employee within Malaysia. MyEG said its sub-subsidiary Agensi Pekerjaan MY EG Jobs SB received the licence to conduct matters relating to private employment agencies from the Department of Labour Peninsular Malaysia, Ministry of Human Resources. MyEG added that the licence, which is valid from Sept 1, 2018 to Aug 31, 2020, is in line with the recent launch of the job matching and placement service to match Malaysian employers with foreign workers. (The Edge)

Pasukhas: Bags RM20m steam coal sales contract. Pasukhas Group has secured a contract to sell one vessel of steam coal in South Kalimantan, Indonesia for USD4.9m (RM20.4m). The group said its wholly-owned subsidiary Pasukhas Products SB signed the contract with a Singapore company, which it did not name. (The Edge)

Unisem: Chairman and Chinese partner launch takeover bid at RM3.30 per share. Unisem (M) has received a pre-conditional voluntary conditional takeover offer from joint offerors, comprising executive chairman and MD John Chia Sin Tet as well as China’s Tianshui Huatian Technology Co Ltd (TSHT). The pre-conditional offer is being made at RM3.30 per share, with a total outlay of RM1.82bn for the exercise, the semiconductor manufacturer said. This represents a premium of 11.11% to the stock’s last closing price of RM2.97. (The Edge)

Only World Group: Plans RM50m capital spending for FY19. Only World Group Holdings (OWG) has allocated RM50m as capital expenditure (capex) for the FY19, mainly to upgrade its existing indoor playgrounds or playlands, as the company calls it, and to build new ones. Only World Group chief operating officer (COO) Jean Koh said the ageing facilities to be upgraded are located in Bangsar Shopping Centre and 1Utama Shopping Centre. Besides upgrading works, Koh said the company is targeting to open new playlands in the 3Q2019, though it is keeping its options open in terms of the number of new additions. (The Edge)

Market Update

The FBM KLCI might open flat today after US technology stocks were hit by a bout of selling — with chipmakers leading the way— although renewed strength for the energy sector helped keep the S&P 500 on a relatively even keel as oil prices continued to rise. Some support for global stock markets came from unconfirmed reports that the US was proposing a fresh round of trade talks with China in the near future.

On Wall Street, the S&P 500 closed a fraction higher at 2,888, after swinging between 2,879 and 2,895. The Dow Jones Industrial Average edged up 0.1% and the Nasdaq Composite ended 0.2% weaker at 7,954. Facebook and Twitter shares were down sharply, while Micron Technology continued to lose ground.

Across the Atlantic, the pan-European Stoxx 600 index rose 0.5% — its best showing this month — with France’s Cac-40 outperforming with a 0.9% rise, bolstered by robust results from luxury fashion retailer Hermès. The Xetra Dax in Frankfurt gained 0.5%, while the FTSE 100 in London added 0.6%.

Back home, the FBM KLCI index lost 13.92 points or 0.77% to 1,785.25 points on Wednesday. Trading volume increased to 2.23bn worth RM2.81bn. Market breadth was negative with 166 gainers as compared to 896 losers. The regional markets also finished lower with shares in China leading the region. The Shanghai Composite was down 0.33% while Hong Kong's Hang Seng was off 0.29% and Japan's Nikkei 225 was lower by 0.27%.

Source: PublicInvest Research - 13 Sept 2018

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