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Author: PublicInvest   |   Latest post: Fri, 13 Sep 2019, 9:48 AM

 

PublicInvest Research Headlines - 17 Oct 2018

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Economy

US: Job openings hit record high of 7.14m. US job openings jumped to a record high in August, far outpacing a rise in hiring, suggesting that companies could be increasingly having difficulties finding qualified workers. The Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS, report on Tuesday that there were 7.14m unfilled positions in the economy in August. That was the highest level since the series started in 2000 and compared to 7.08m vacancies in July. The job openings rate also rose to an all-time high of 4.6% from 4.5% in July. Hiring increased to a record high 5.78m in August from 5.71m in the prior month. (Reuters)

US: Treasuries' August inflow hits highest since June 2015. Foreigners bought more than three times as much in US Treasuries in August than in the previous month, posting the largest inflow since June 2015, data from the Treasury Department showed on Tuesday. Data showed that purchases of US Treasuries totalled USD63.13bn in August, up from USD18.94bn the previous month. Treasury inflows were led by private investors, who bought USD55.57bn. Data also showed China’s Treasuries holdings declined to USD1.165trn in August, the lowest since June 2017, from USD1.171trn in July.. (Reuters)

US: Industrial production increased for a 4th-straight month, but momentum slowed sharply in the 3Q. US industrial production increased for a fourth straight month in September, boosted by gains in manufacturing and mining output, but momentum slowed sharply in the 3Q. The industrial production rose 0.3% percent last month after an unrevised 0.4% increase in August. Industrial output grew at a 3.3% annualized rate in the 3Q after accelerating at a 5.3% pace in the 2Q. The Fed said industrial output in September had been held down slightly by Hurricane Florence, which drenched South and North Carolina in mid-September. (Reuters)

US: Economic outlook vs the rest of the globe is brightest in 11 years. The US is putting more distance between itself and the rest of the world in terms of growth expectations from professional investors. The news keeps getting worse for global economic prospects, with respondents to the Bank of America Merrill Lynch Fund Manager Survey for October now holding their dimmest view for the future since the financial crisis. A record 85% of market pros say the world is in the "late cycle" period of growth. That's the highest reading since Nov 2008, just two months after Lehman Brothers collapsed and triggered the worst days of the Great Recession. (CNBC)

EU: Trade dispute, Brexit angst weigh on German investor morale. German investor morale darkened more than expected in October, a survey showed on Tuesday, as concerns about an escalating trade dispute between the US and China and fears of a hard Brexit clouded the outlook for Europe’s largest economy. The monthly survey showed economic sentiment among investors deteriorated to -24.7 from -10.6 in Sept. The US and China are locked in a bruising tit-for-tat tariffs dispute that threatens to hurt global growth as well as innocent bystander nations. (Reuters)

EU: Eurozone trade surplus increases in August. The euro area trade surplus increased in August on higher exports, figures from Eurostat showed Tuesday. The trade surplus rose to a seasonally adjusted EUR16.6bn from EUR12.6bn in July. Exports increased 2.1% MoM in August, while imports remained stable. At the same time, on an unadjusted basis, the trade surplus fell to EUR11.7bn from EUR15.3bn a year ago as the annual growth in imports exceeded the rise in exports. YoY, exports advanced 5.6% and imports climbed 8.4% in August. (RTT)

UK: Jobless rate at 43-year low; earnings growth fastest in almost a decade. The UK unemployment rate remained at the lowest level in 43 years in the 3 months to August, helping the average earnings to increase further amid fears of no-deal Brexit. The ILO jobless rate came in at 4%, in line with expectations, and was the lowest since February 1975. The number of unemployed decreased 47,000 from the previous quarter to 1.36m. At the same time, the employment rate stood at 75.5% compared to 75.7% in the three months to May. Average weekly earnings excluding bonuses advanced 3.1% annually, the highest since late 2008. (RTT)

China: Inflation at 7-month high. China's inflation rose to a 7-month high in September on higher energy prices. Consumer prices advanced 2.5% YoY in Sept, in line with expectations but faster than the 2.3% rise in August. This was the highest increase since last February. Nonetheless, inflation remains well below the government's full year target of around 3%. Food prices rose by 3.6% versus 1.7% a month ago. Meanwhile, non-food price inflation eased to 2.2% from 2.5%. At the same time, monthly consumer price inflation held steady at 0.7%. The upshot is that the recent rise in CPI is due to temporary disruptions to food supply. (RTT)

Markets

Sapura Energy (Trading Buy, TP: RM0.81): Bank Negara grants conditional approval for proposed rights issue of RCPS-i. Bank Negara Malaysia has granted a conditional approval on Sapura Energy’s issuance of new Islamic redeemable convertible preference shares (RCPS-i) to non-resident shareholders. It said the central bank's approval is subject to the condition that the group is required to convert the proceeds raised from the rights issue of RCPS-i in stages for part repayment of foreign currency borrowings. (The Edge)

Barakah: To negotiate terms with lenders. Barakah Offshore Petroleum and its unit, PBJV Group SB, have been granted an order by the High Court to restrain all proceedings and actions brought against itself except with leave of the High Court of Malaya and subject to any terms that the court may impose. It said the order was applied as part of proactive measures by Barakah to manage its debt levels. “The order allows the Barakah Group to negotiate terms with its lenders and creditors without having the threat of any proceedings and actions being brought against the company,” it said. (StarBiz)

Wegmans: Proposes 1-for-4 bonus warrants. Wegmans Holdings has proposed to undertake a bonus issue of 125m free warrants on the basis of one warrant for every four existing shares. The exercise price of the warrants has been fixed at 30 sen per warrant, Wegmans said. The entitlement date will be determined later, the filing said. Assuming full exercise of the warrants at the price of 30 sen each, it could raise maximum gross proceeds of RM37.5m. (The Edge)

Nextgreen: Gets RM400m investment for GTP projects. Nextgreen Global had accepted a RM400m investment from Asia Capital Investment Fund (ACIF) to finance Nextgreen's Green Technology Park (GTP) projects in Malaysia. It said ACIF's RM400m investment comprises a subscription of 280m new cumulative redeemable preference shares (CRPS) in Nextgreen at RM1 each, and a RM120m loan. (The Edge)

Globaltec: Scraps collaboration plan with Hong Kong's EPI Energy. Globaltec Formation has aborted its plan to collaborate with Hong Kong's EPI Energy Holdings Ltd to participate in the exploration and production activities of Globaltec's Indonesian unit. It cited failure to reach a mutual agreement on the commercial terms as reason for the termination of the MoU. "We wish to announce that the MoU has been terminated in accordance to the expiration term of 45 days of the MoU," Globaltec said. "The investment will enable the company to raise funds expeditiously, as compared to other forms of fundraising such as rights issue. This will allow the company to raise funds for its working capital for the project, without having to incur interest costs on the CRPS, as compared to bank borrowings or issuance of debt instruments," it said. (The Edge)

Tri-Mode: Inks deal with OGN Online. Tri-Mode System (M), through its wholly owned subsidiary Landbridge Haulage (M) SB has entered into a MoU with OGN Online SB. This platform operates under the name Kumoten. It said Landbridge Haulage had on July 12 signed an e-commerce logistics agreement with an established platform operator in Taiwan, HiClicks, for exclusive rights to operate the e-commerce logistics platform in Malaysia under HiClicks Malaysia. (StarBiz)

Market Update

The FBM KLCI might open higher today after reassuring earnings from the likes of Goldman Sachs and Morgan Stanley helped instill a far more confident feel to US and European equity trading overnight following last week’s steep losses, with the S&P 500, Nasdaq Composite and Dow Jones Industrial Average all registering their biggest one-day gains since late March. Technology stocks — which suffered some of the sharpest falls during the sell-off — led the way higher on both sides of the Atlantic, while the US healthcare sector also moved higher after UnitedHealth’s results beat expectations. In Europe, Italian stocks and bonds outperformed after the government met a deadline to submit its draft budget to the European Commission. On Wall Street, the S&P 500 and Dow Jones Industrial Average both rose 2.2%, to 2,809 and 25,798 respectively, while the tech-heavy Nasdaq Composite gained 2.9%. The pan-European Stoxx 600 rose 1.6% as Frankfurt’s Xetra Dax rose 1.4%. London’s FTSE 100 ended 0.4% higher.

Back home, the FBM KLCI index gained 8.10 points or 0.47% to 1,736.84 points on Tuesday. Trading volume decreased to 1.53bn worth RM1.62bn.Market breadth was negative with 339 gainers as compared to 439 losers. The regional market put in more mixed performances. Mainland China’s CSI 300 fell 0.8%, while Hong Kong’s Hang Seng was up 0.1%. The Topix in Tokyo ended 0.7% higher after a volatile session.

Source: PublicInvest Research - 17 Oct 2018

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