PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 17 May 2019, 10:33 AM


PublicInvest Research Headlines - 7 Jan 2019

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US: Payrolls rise 312,000, wages accelerate in jobs blowout. US employers added the most workers in 10 months as wage gains accelerated and labor-force participation jumped, reflecting a robust job market that nevertheless faces mounting risks in 2019. Nonfarm payrolls increased by 312,000 in Dec, easily topping all forecasts, after an upwardly revised 176,000 gain the prior month, a Labor Department report showed. (Bloomberg)

EU: Slowest growth in over four years during Dec. The IHS Markit Eurozone PMI Composite Output Index moved closer to the 50.0 no change mark in Dec. Registering a final reading of 51.1, down from 52.7 in Nov and lower than the earlier flash estimate of 51.3, the index was at its weakest level for over four years. The slowdown in growth during Dec in part reflected lower activity in France, where the ‘gilets jaunes’ movement reportedly led to a first fall in economic output for two-and-a half years. (Markit Economics)

UK: Services sector up only slightly in Dec. The UK’s dominant services sector recovered only slightly in Dec from more than a two year low, bringing the economy close to stagnation in the last quarter, IHS Markit said. The services survey, together with other reports on construction and manufacturing, indicate overall economic growth of just 0.1% in the final quarter of last year, Markit said. (Bloomberg)

UK: House price inflation weakest since early 2013 amid Brexit uncertainty. UK house price inflation slowed sharply in Dec to its weakest level since early 2013, as buyer confidence eroded amid the persistent uncertainties linked to Brexit, results of a key survey showed. The house price index rose 0.5% YoY following a 1.9% increase in Nov, the Nationwide Building Society reported. (RTT)

China: Services sector extends solid expansion in Dec, according to Caixin PMI. China’s services sector extended its solid expansion in Dec, offering some cushion for the slowing economy, a private survey showed. The Caixin/Markit services PMI rose to a six-month high of 53.9 in Dec, up from 53.8 in the previous month. It had slipped to a 13- month low in Oct. (Reuters)

China: Cuts banks' reserve ratios by 1% as economy slows. China's central bank said it was cutting the ratio of cash that banks must hold as reserves by 100 basis points (bps), or 1%, as it looks to reduce the risk of a sharper slowdown in the world's second-biggest economy. The cut in banks' reserve requirement ratios (RRR) is the first in 2019 and the fifth in a year by the PBOC as the economy faces its weakest growth since the global financial crisis and mounting pressure from US tariffs. (CNBC)


Ikhmas Jaya: A RM57.94m contract terminated with 81% completion. Ikhmas Jaya Group said a RM57.9m contract has been terminated by TTDI KL Metropolis SB, but it did not disclose the reason. It said the project, clinched on Nov 28, 2016, has been 81% completed and the balance of work to be carried out is worth RM11m. It also said the termination is not expected to have any significant impact on the group's earnings for the FYE Dec 31, 2018. (The Edge)

PUC: Subsidiary signs MoU with Yayasan Pekerja Malaysia to provide micro financing. PUC's wholly-owned subsidiary Wealth Pursuit SB has entered into a MoU with Yayasan Pekerja Malaysia (YAPEM) to provide micro financing to YAPEM members. The signing of the MoU comes on the heels of the company’s proposed takeover of Pictureworks Holdings SB for RM168m through a share plus cash deal. (The Edge)

KUB: Several parties eyeing stake. KUB Malaysia said its major shareholder had been approached by several parties interested in acquiring the stake.The group, in a clarification over the unusual market activity (UMA), said it had received a letter from Anchorscape SB, informing it of the development. “The discussions with the various parties are still very preliminary at this juncture and no agreements and/or conclusions have been made so far on the same. (StarBiz)

Ho Wah Genting: Plans private placement of new shares. Ho Wah Genting proposed a private placement of up to 34.2m new shares to third party investors to raise funds for working capital and repayment of borrowings. It said the private placement may be implemented in one or more tranches within six months from the date of Bursa's approval or any extended period approved by Bursa. "Subject to the relevant approvals being obtained and barring any unforeseen circumstances, the proposed private placement is expected to be completed by the first half of 2019," it said. (The Edge)

MAHB: MoF names acting chief Raja Azmi as new CEO. Raja Azmi Raja Nazuddin, who has served as acting group CEO of Malaysia Airports Holdings (MAHB) since June 23, 2018, is now officially the airport operator's group CEO with a three-year tenure. Finance Minister Lim Guan Eng said the appointment came after obtaining the approval from Prime Minister Tun Dr Mahathir Mohamad. He said Raja Azmi’s appointment coincide with MAHB’s need when the usage of Malaysia airports is increasing. (The Edge)

Spring Gallery: CEO resigns. Spring Gallery’s CEO Datuk Lim Chaing Cheah has resigned from the loss-making group. It said Lim resigned to “focus on ceramic business at the subsidiary level”. Spring Gallery did not name any successor for Lim. In a separate filing, Spring Gallery said it has appointed Rasydan Alias Mohamed as an independent non-executive director, replacing Amirul Azhar Baharom, who resigned for “other personal and business commitments”. (The Edge)

Market Update

The FBM KLCI might open with a positive note today after global stocks rallied sharply last Friday and oil prices jumped as risk appetite was bolstered by optimism on the US-China trade front, a robust US jobs report and soothing comments from Federal Reserve chairman Jay Powell. Officials from the US and China will meet today for their first formal talks since the beginning of a truce in the trade war between the two countries that has kept market participants on edge. Furthermore, the People’s Bank of China announced a 100 basis point cut to the required reserve ratio for banks in a bid to support the economy. More positive news came from an encouraging survey on China’s services sector. Earlier this week, data showed China’s manufacturing sector contracting for the first time since May 2017, while Apple blamed poor iPhone sales in the country for its first sales warning in 16 years. Meanwhile, concerns about the strength of the US economy were assuaged to some degree by the latest US labour market data, which showed stronger job creation than expected and accelerating wage growth. Non-farm payrolls rose 312,000 last month, compared with a consensus forecast for a gain of 177,000. Average hourly earnings rose 3.2% in the year to December, the fastest pace since 2009. On Wall Street, the S&P 500 ended 3.4% higher at 2,531, just off the day’s peak of 2,538.07, giving it a rise over the holiday-shortened week of 1.9%. The Dow Jones Industrial Average gained 3.3% — or nearly 750 points — on Friday, while the Nasdaq Composite climbed 4.3%. The Europe wide Stoxx 600 rose 2.8%, with Frankfurt’s Xetra Dax gaining 3.4% and London’s FTSE 100 adding 2.2%.

Back home, the FBM KLCI index lost 6.05 points or 0.36% to 1,669.78 points on Friday. Trading volume increased to 2.20bn worth RM1.29bn. Market breadth was positive with 492 gainers as compared to 349 losers. In the region, Chinese stocks enjoyed a strong session, with the CSI 300 rising 2.4% and the Hang Seng in Hong Kong ending 2.2% higher. In Tokyo, the Topix index ended 1.5% lower as participants focused on global growth concerns on the first day of trading for Japanese markets in 2019.

Source: PublicInvest Research - 7 Jan 2019

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