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Author: PublicInvest   |   Latest post: Fri, 22 Mar 2019, 10:13 AM

 

PublicInvest Research Headlines - 28 Nov 2018

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Economy

US: Consumer confidence pulls back more than expected in Nov. Reflecting a pullback in expectations, the Conference Board released a report on Tuesday showing a bigger than expected decrease in US consumer confidence in the month of Nov. The Conference Board said its consumer confidence index dropped to 135.7 in Nov after rising to 137.9 in Oct. Economists had expected the index to dip to 136.5. The bigger than expected decrease by the consumer confidence index came after it reached its highest level since Sept of 2000 in the previous month. The pullback by the headline index came as the expectations index slid to 111.0 in Nov from 115.1 in Oct, indicating a decline in consumer optimism about the short-term future. The percentage of consumers expecting business conditions to improve over the next six months fell to 22.5% from 26.3%, while those expecting conditions to worse rose to 8.8% from 7.2%. (RTT)

US: Fed officials acknowledge economic weaknesses yet remain upbeat. Federal Reserve officials on Tuesday sprinkled small doses of concern into otherwise upbeat assessments of the US economy. Chicago Fed President Charles Evans, appearing on a panel discussion with two other regional bank chiefs, pointed to growing skilled-labor shortages. Kansas City’s Esther George said pain in the agriculture sector has been exacerbated by the trade dispute with China. Atlanta Fed President Raphael Bostic called his district a “microcosm of the US economy,” with many cities booming, but with many other “pockets of distress” being left behind by the economic expansion. None signaled a desire to halt gradual interest-rate increases and Evans repeated his desire to see monetary policy return to “something that’s more neutral.” (Bloomberg)

US: Home prices in 20 cities rise least in almost two years. Home price gains in 20 US cities grew in Sept at the slowest pace in almost two years, adding to signs that buyer interest is waning amid higher mortgage rates and elevated property values. The 20-city index of property values increased 5.1% from a year earlier, the least since Nov 2016, after rising 5.5% in the prior month, according to S&P CoreLogic Case-Shiller data released Tuesday. The median estimate in a Bloomberg survey of economists called for a gain of 5.2%. Nationally, home prices were up 5.5% from Sept 2017. (Bloomberg)

EU: France consumer confidence lowest in nearly 4 years. France's consumer confidence dropped in Nov to its lowest level since early 2015, survey data from the statistical office INSEE showed on Tuesday. The consumer confidence index fell to 92 from 95 in Oct. Economists had forecast a score of 94. The latest reading was the lowest since Feb 2015 and was below the long-term average of 100, the INSEE said. Households' view regarding the future financial situation weakened slightly. There was a clear decline in their willingness to make big purchases now and the relevant index was below its long-term average for the first time since Dec 2015. Consumers' expected saving capacity measure also declined sharply and was below its long-term average. (RTT)

UK: Retail sales grow more than expected in nov, outlook dims, according to CBI. UK retail sales growth in Nov was greater than expected, though retailers are gloomy about activity in the next three months, a survey by the Confederation of British Industry showed on Tuesday. The monthly retail sales balance of the Distributive Trades survey rose to +9 from +5 in Oct. Economists had forecast +10. Retailers expect sales to pick up in Dec, giving a survey balance of +22. However, they expect business situation to deteriorate over the next three months, giving a balance of -9. "While it is encouraging to see headline retail sales growth strengthen in Nov after a weak out-turn in Oct, the quarterly survey continues to paint a gloomy picture of the sector," CBI Head of Economic Intelligence Anna Leach said. (RTT)

China: Early indicators show China slowed for a sixth month in Nov. China’s economy slowed for a sixth straight month in Nov as the ongoing trade war with the US continued to weigh on the outlook for economic growth. That’s the signal from a Bloomberg Economics gauge aggregating the earliest-available indicators on business conditions and market sentiment. The data suggest recent government actions to support households and private companies haven’t been enough to immediately boost the economy and allay concerns about the nation’s growth trajectory. "Early indicators point to further weakness in the Chinese economy," Bloomberg Chief Asia Economist Chang Shu said. (Bloomberg)

Japan: Producer Prices Climb 1.3% On Year In Oct. Producer prices in Japan were up 1.3% on year in Oct, the Bank of Japan said on Tuesday. That exceeded expectations for an increase of 1.2% and was up from the downwardly revised 1.1% gain in Sept (originally 1.2%). On a monthly basis, producer prices climbed 0.4% following the flat reading in the previous month. Individually, prices were up for advertising services, transportation, postal activities, leasing and real estate. Prices were down for information and communications and telemarketing. (RTT)

Markets

MISC: Secures RM558m contract to supply 2 LNG ships. MISC has secured two contracts to supply two of its liquified natural gas (LNG) carriers to LNG Shipping S.p.A for USD133m (RM558m). MISC announced to Bursa Malaysia on Tuesday the time charters for the LNG Portovenere and LNG Lerici for operations in international waters. “The vessels will be chartered by LSS for a period of five years with an estimated combined contract value of USD133m. The charter for LNG Portovenere is expected to commence in Dec 2018 whereas the charter for LNG Lerici is expected to commence by Jan 2019,” it said. MISC said the contracts are pursuant to a memorandum of agreement between LSS and MISC, which resulted in MISC acquiring ownership of the vessels from LSS. (StarBiz)

Comfort Gloves: Products taken off US import alert list. Comfort Gloves’ examination gloves will no longer need to be inspected prior to their entry into the US, after wholly owned subsidiary, Comfort Rubber Gloves Industries SB (CRGISB) was taken off the US Food & Drug Administration (US FDA) Import Alert List. “The BODs of the company wishes to announce that its wholly owned subsidiary, CRGISB has on Nov 27, 2018 received a letter from the US FDA informing that CRGISB has been removed from the Import Alert list of the US FDA,” it said. (SunBiz)

Hovid: Takeover offer extended to Jan 8. Hovid MD David Ho Sue San and Fajar Astoria SB have extended the closing date for the takeover offer of the company at 38 sen a share to Jan 8, 2019, being the last extension allowed. “The closing time and date for acceptances of the offer has been extended from 5pm on Dec 4, 2018 to 5pm on Jan 8, 2019,” CIMB Investment Bank said on behalf of the joint offerors. It has secured 86.68% of Hovid thus far. Hovid also submitted an application for its withdrawal from the Main Market of Bursa Malaysia Securities. The company obtained shareholders’ approval for the withdrawal on Monday. (SunBiz)

PPB: 3Q profit falls on lower earnings from agribusiness, consumer products segments. PPB Group reported a 5.61% fall in 3Q net profit due to lower earnings from its grains and agribusiness, and consumer products segments. The net profit for 3QFY18 fell to RM359.77m, from RM381.17m a year earlier. Quarterly revenue rose 5.63% to RM1.14bn, from RM1.08bn previously, the group said. PPB explained that the grains and agribusiness segment was hit by higher raw material costs from the flour and feed divisions, while the consumer products segment’s lower profit was mainly attributable to lower sale volumes and lower profit margin. (The Edge)

IPO: DPI Holdings to double aerosol production to 20m cans. Aerosol paints producer, DPI Holdings targets to double its production capacity to 20m cans per annum from 9.7m cans currently with the construction of a new factory adjacent to its existing plant in Johor. DPI Holdings said aside from the new factory, which will have four new fully-automated aerosol filling lines, it would also upgrade the production lines in the existing plant to become fully-automated. DPI Holdings is targeting to list on the ACE Market of Bursa Malaysia on Jan 7 next year and its IPO entails the issuance of 126.5m new shares at an issue price of 25 sen per share. (Bernama)

Market Update

The FBM KLCI might open with a positive note today after US stocks ended higher on Tuesday after vacillating during the session as investors weighed the prospects for upcoming US China trade negotiations. The trading pattern followed Donald Trump’s threat late on Monday to widen tariffs on Chinese imports ahead of the G20 summit in Argentina where he is expected to meet Xi Jinping, Chinese president. That was followed by comments on Tuesday from Larry Kudlow, director of the US National Economic Council. Mr Kudlow said that in Mr Trump’s view there was a “good possibility that a deal can be made”, helping US shares move into the black. The S&P 500 rose 0.3%, as gains for healthcare, consumer staples and utilities helped outweigh pressure on industrials, energy and materials shares. The Dow Jones Industrial Average gained 0.4%. The tech-heavy Nasdaq Composite was flat as Apple and Microsoft took turns trading for the title of world’s most valuable company after recent declines put the iPhone maker’s top spot at risk. The Europe-wide Stoxx 600 closed just 0.3% down, but the index tracking miners, which depend on China’s growth for much of the demand for their output, fell about 2%, while that tracking the car industry dropped 3%. Frankfurt’s Xetra Dax 30 closed flat, while London’s FTSE 100 closed down 0.3%, with defensive sectors including utilities and food retailers limiting losses.

Back home, the FBM KLCI index lost 17.02 points or 1.00% to 1,684.97 points on Tuesday. Trading volume increased to 2.18bn worth RM2.61bn. Market breadth was negative with 199 gainers as compared to 686 losers. The CSI 300 of Shanghai- and Shenzhen listed companies slipped 0.1%, with Hong Kong’s Hang Seng down 0.2%. Japan’s Topix was brighter — up 0.7%, helped by financials and telecoms stocks. Australia’s S&P/ASX 200 rose 1%, with resource stocks in demand.

Source: PublicInvest Research - 28 Nov 2018

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Labels: MISC, COMFORT, HOVID, PPB

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