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Author: PublicInvest   |   Latest post: Fri, 13 Dec 2019, 10:07 AM

 

PublicInvest Research Headlines - 3 Dec 2018

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Economy

US: Trump to notify Congress in 'near future' he will terminate NAFTA. US President Donald Trump said on Saturday he will give formal notice to the US Congress in the near future to terminate the North American Free Trade Agreement (NAFTA), giving six months for lawmakers to approve a new trade deal signed on Friday. “I will be formally terminating NAFTA shortly,” Trump said. “Just so you understand, when I do that - if for any reason we’re unable to make a deal because of Congress then Congress will have a choice” of the new deal or returning to trade rules from before 1994 when NAFTA took effect, he said. (Reuters)

EU: Eurozone inflation slows to 3-month low, core figure unexpectedly eases. Eurozone's consumer price growth slowed to its lowest level in three months in Nov and the core inflation unexpectedly eased, preliminary figures from the Eurostat showed on Friday. The consumer price index rose 2% YoY following a 2.2% increase in Oct. The slowing was in line with economists' expectations. Core inflation, which excludes change in the prices of energy, food, alcohol & tobacco, dropped to 1% from 1.1% in Oct. Economists had expected the rate to remain unchanged. In Nov, energy inflation is expected to slow to 9.1% from 10.7%, yet emerge the highest rate among the CPI components. Food, alcohol & tobacco prices rose 2% after a 2.2% increase in Oct. The Eurostat is set to release the full data on Dec 17. (RTT)

EU: Eurozone jobless rate unchanged near decade-low. Eurozone's unemployment rate remained unchanged at its lowest level in nearly 10 years for a third straight month in Oct, preliminary figures from the Eurostat showed on Friday. The seasonally adjusted jobless rate was 3.1% in Oct, where it has been since July. Economists had expected the figure to ease slightly to 8%. A year ago, the unemployment rate was 8.8%. The jobless rate is the lowest recorded in the euro area since Nov 2008, the Eurostat said. The number of unemployed in Eurozone was 13.17m in Nov, which was higher by 12,000 from Sept. The fell by 1.1m from a year ago. The unemployment rate for EU28 was 6.7% in Oct, unchanged from the previous month. (RTT)

China: Stimulus decisions loom as trade deal fuels uncertainty. Saturday’s deal between Xi Jinping and Donald Trump does little to alleviate the economic slowdown and uncertainty roiling China’s economy, meaning targeted stimulus will likely continue into 2019. Domestic demand is still slowing and the economy will expand at the lowest pace in almost two decades next year, according to a Bloomberg survey. Managing the slowdown as the clock ticks toward a new deadline for a trade deal in March will be a key task for the Communist Party’s annual gathering to set economic policy, which is usually held in Dec. (Bloomberg)

India: Economic growth slows more than expected. India's economic growth sharply slowed in the July to Sept quarter and the expansion was slower-than-expected, due to weaker farm output and private consumption. GDP grew 7.1% YoY after an 8.2% expansion in the three months to June, figures from the Central Statistics Office showed Friday. Economists had forecast 7.5% growth. The latest pace of growth was the weakest in three quarters. Farm growth, on a value added basis, slowed to 3.8% from 5.3%. Mining and quarrying contracted 2.4% after a modest 0.1% gain. Manufacturing growth nearly halved to 7.4% from 13.5%. Construction growth slowed to 7.8% from 8.7%. Financial services sector growth slowed to 6.3% from 6.5%. (RTT)

Markets

Bumi Armada (Neutral, TP: RM0.29): Gets UMA query after sharp fall in share price to all-time low. A sharp fall in Bumi Armada’s share price prompted Bursa Malaysia to issue an unusual market activity (UMA) query to the company. Shares of the operator of floating production storage and offloading vessels and offshore service vessels closed at a record low of 16sen, down 3sen or 15.8%. YTD, the counter has declined by 79.2%, from its closing price on Dec 29 last year. (The Edge)

UMW Holdings: Sells Shah Alam land for RM288m, returns to the black in 3Q. UMW Holdings is disposing of its leasehold industrial land totalling 38.803 acres in Shah Alam, Selangor to Strategic Sonata SB, a wholly-owned subsidiary of Singapore's Mapletree Dextra Pte Ltd, for RM287.7m. The proposed disposal will enable the group to fully unlock and realise the value of its long-held assets in Shah Alam as part of its broader strategic thrust of sustainable value creation for shareholders. (The Edge)

Alam Maritim: Unit bags pan-Malaysia job. A unit of Alam Maritim Resources has been awarded a 5-year contract to provide panMalaysia underwater services for petroleum arrangement contractors. Its wholly-owned Alam Maritim (M) SB will be undertaking the job awarded by Petronas Carigali and Enquest Petroleum Production Malaysia Ltd. The contract valid for 5 years is on a regular or "callout" basis whereby work orders will be issued by the client based on the schedule of rates as set forth in the contract. (The Edge)

Eupe Corp: Buys two PJ plots to grow land bank for RM32m. Eupe Corp is buying 2 contiguous commercial 99-year leasehold land plots, measuring 11,551sqm, in Bandar Petaling Jaya Selatan, Selangor, for RM32.33m. The acquisition will add on to its land bank within the Klang Valley region and the intended development on these lands will provide an opportunity for the group to expand and complement its existing business in developing residential and commercial properties here. (The Edge)

Petronas Gas: 3Q net profit up 20% on higher regasification, utilities contribution. Petronas Gas saw a 19.7% increase in its net profit to RM499.81m for 3Q ended Sept 30, 2018, from RM417.43m a year earlier, on the back of higher contribution from its regasification and utilities segments. This was partly offset by higher finance costs due to recognition of previously capitalised interest expenses following the completion of the group's new liquefied natural gas (LNG) regasification terminal in Pengerang, Johor. (The Edge)

Bina Puri: Posts higher 3Q profit, revenue down on reduced construction work. Bina Puri Holdings posted a net profit of RM782,000 for the 3Q ended Sept 30, 2018, up 165.08% compared with RM295,000 a year ago. Quarterly revenue fell 7.37% to RM199.86m from RM215.76m previously. Cumulative 9M net profit was up 61.03% to RM1.79m from RM1.11m despite a 32.56% fall in revenue to RM526.85m from RM781.20m. Bina Puri attributed the lower revenue to reduced volume of construction work. (The Edge)

Ekovest: 1Q net profit up 13% on higher contribution from property development, toll ops. Ekovest saw its net profit rise 13% to RM43.87m in its 1QFY19 from RM38.84m a year ago, on higher contribution from the property development and toll operation sectors. This resulted in a higher EPS of 2.05sen for 1QFY19 compared with 1.82sen for 1QFY18. Quarterly revenue increased 33% to RM304.89m from RM229.16m a year ago. (The Edge)

Market Update

US markets ended November on a positive note in expectation of a favorable meeting outcome between Presidents Trump and Xi at the sidelines of the G20 summit, which they duly delivered over the weekend by calling for a truce on their spat. While more talks are expected, both countries will refrain from slapping more tariffs come Jan 1. The month is however notable for the slumps in crude oil prices and shares of Apple, down 21% and 19% on concerns of rising supplies and slowing demand respectively. On the day, all three major benchmarks (Dow Jones Industrial Average, S&P 500 and Nasdaq Composite) gained 0.8%. European equities were weighed by developments in Germany and France, the former seeing prices of Deutsche Bank fall to all time lows as police searched their headquarters for a second day in relation to a money laundering scandal. Investors also kept tabs on Italy and comments from Prime Minister Giuseppe Conte who told an Italian newspaper that he is working on a proposal to reduce the planned deficit target for 2019. The idea is to bridge differences with the European Commission and potentially avert extra monitoring from officials in Brussels. Germany’s DAX and France’s CAC 40 slipped 0.4% and 0.1% as UK’s FTSE 100 fell 0.8%, the latter still grappling with Brexit-related issues. Asian markets were mostly higher last Friday as investors waited on a highly anticipated meeting between President Donald Trump and his Chinese counterpart Xi Jinping at the G-20 summit in Argentina, which many hope will help ease escalating trade tensions between the two countries. The Shanghai Composite and Hang Seng indices rose 0.8% and 0.2% as the Nikkei 225 edged up 0.4%. The FBM KLCI tumbled 1.0% on late selling however.

The Genting Group is in the headlines again, this time round for Genting Malaysia’s largest ever quarterly net loss of RM1.5bn, though largely due to a massive RM1.8bn impairment. Please refer to accompanying reports today for more details. FGV Holdings is now initiating a lawsuit against its former Chairman and former President/CEO to seek reliefs totaling RM7.9m in relation to a purchase of two property units. UMW Holdings is disposing of its leasehold industrial land totalling 38.8 acres in Shah Alam to a wholly-owned subsidiary of Singapore's Mapletree Dextra Pte Ltd for RM287.7m.

Source: PublicInvest Research - 3 Dec 2018

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