PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 6 Dec 2019, 9:18 AM


PublicInvest Research Headlines - 16 Jan 2019

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Global: Debt of USD244trn nears record despite faster growth. The world’s debt pile is hovering near a record at USD244trn, which is more than three times the size of the global economy, according to an analysis by the Institute of International Finance. The global debt-to GDP ratio exceeded 318% in 3Q of last year, despite a stronger pace of economic growth, according to a report by the Washington-based IIF released on Tuesday. That’s slightly below a record 320% of GDP in the same quarter of 2016. With interest rates rising globally, the International Monetary Fund has warned governments to rein in soaring levels of debt and rebuild buffers against future risks. (Bloomberg)

US: Core producer prices decline for first time in a year. A key measure of U.S. producer prices unexpectedly fell in December and the overall gauge declined more than forecast amid lower oil prices, signaling potential inflation pressures in the economy are contained. Excluding food and energy, producer prices decreased 0.1% from the prior month, the first decline in a year, according to a Labor Department report. The overall producer-price index fell 0.2 percent from Nov after a 0.1% rise. The Bloomberg survey median called for an increase in the core PPI and a drop in the main index. On an annual basis, core producer-price gains held steady at 2.7% -- missing forecasts for 3% -- while the broad gauge rose 2.5%, also unchanged from the prior reading. Food and energy prices are typically volatile. (Bloomberg)

EU: Eurozone trade surplus falls in Nov. Eurozone's merchandise trade surplus decreased strongly in Nov, as the growth in imports outpaced that of exports. The trade surplus fell to EUR 19 billion from EUR 23.4billion in the same month last year, figures from the euro area statistical office Eurostat showed. Exports increased 1.9% YoY and imports rose 4.7%. Trade within the euro area grew 1.5% YoY. In the Jan to Nov period, exports rose 4.2% from a year ago and imports climbed 6.6%. The trade surplus decreased to EUR175.2bn from EUR210.4bn in the same period last year. On a seasonally adjusted basis, the trade surplus rose to EUR15.1bn from EUR13.5bn in Oct. (RTT)

EU, UK: Diplomats said to now assume Brexit will be delayed. British and EU diplomats are now working on the assumption that the UK will leave the bloc later than the planned exit date of March 29 if Prime Minister Theresa May loses Tuesday’s Brexit deal vote in Parliament. Officials dealing with Brexit for the UK and EU are separately preparing for the possibility, even though there have been no discussions on the issue between the two sides and no indication from May that this is her plan, according to four people familiar with the situation. Much depends on the scale of May’s expected defeat on the Brexit deal in Parliament. If she loses heavily, EU officials said they think she’ll have no other option than to extend the Brexit negotiating period -- known as Article 50 -- to have time to convince lawmakers to back the deal. (Bloomberg)

China: Signals more stimulus as economic slowdown deepens. China will aim to achieve “a good start” in 1Q for the economy, the state planner said on Tuesday, signaling authorities could roll out more stimulus measures in the near term to counter slowing growth. China will strengthen monitoring of its economic situation and improve its “reserve” of economic policies, the National Development and Reform Commission (NDRC) said. The world’s second-biggest economy slowed in 2018 as Chinese authorities carried out painful long-term structural adjustments to transition to a more gradual but sustainable growth trajectory. A trade war with the US has also heaped uncertainty on China’s near-term outlook. Exports unexpectedly fell the most in two years in Dec in a sign of mounting pressure on the economy. (Reuters)

Japan: M2 money stock climbs 2.4% in Dec. The M2 money stock in Japan was up 2.4% on year in Dec, the BOJ said - coming in at JPY1,014.2trn. That was in line with expectations following the 2.3% gain in Nov. The M3 money stock climbed an annual 2.1% to JPY1,011.9trn - unchanged and in line with forecasts. The L money stock was unchanged at 1.9%, standing at JPY1,790.6trn. For the fourth quarter of 2018, M2 was up 2.5% on year, while M3 advanced 2.2% and L rose 2.0%. For all of 2018, M2 gained 2.9%, M3 added 2.5% and L advanced 2.3%. (RTT)

Malaysia: Unemployment rate unchanged at 3.3% in Nov 2018. Malaysia's unemployment rate remained unchanged at 3.3% in Nov 2018 on track for the third straight month, according to the Statistics Department. Its chief statistician Datuk Seri Dr Mohd Uzir Mahidin said the number of unemployed persons was 516,200 which was an increase of 2.2% from a year ago. He said the labour force participation rate in Nov 2018 fell 0.1ppt to 68.4% from October but increased by 0.5 of a ppt from a year ago which was at 67.9%. The number of labour force in the month rose 2.5% against Nov 2017 to 15.46m persons. During the same period, employed persons also increased 2.5% to 14.94m persons. A total of 31.6% of the working age population, aged 15 to 64, was outside the labour force which comprised of housewives, students, retirees and those who were not interested in working. (StarBiz)


Deleum: Wins 3-year Petronas Carigali contract. Deleum announced that its wholly-owned unit Deleum Oilfield Services SB has won a contract to provide slickline equipment and services for Petronas Carigali SB. The three-year contract commenced on Dec 20, 2018, Deleum said in a filing. However, no contract value was stated by the company. (The Edge)

Barakah Offshore: Still in talks with lenders to settle debt. Barakah Offshore announced that it is still negotiating a debt settlement proposal with its lenders and creditors. Barakah said it will continue to engage with its lenders and creditors to achieve an amicable debt settlement proposal. Meanwhile, the board of directors will also seek all legal avenues to protect Barakah and its subsidiaries when necessary. (The Edge)

Prinsiptek: Inks RM2.13bn JV in East Malaysia. Prinsiptek Corp is developing an oil palm plantation plus a palm oil mill and other facilities in a RM2.13bn JV. It is teaming up with AA Strategic Marketing SB and TTSJ Trading SB for the JV. The partnership will see the companies pool their expertise to develop an oil palm plantation and palm oil mill at Lawas, Sarawak and build a port, jetty, bulking tank for palm oil, refinery and green energy plant. (The Edge)

YFG: Two YFG directors resign to cut company costs. YFG has announced that two of its directors have resigned to save the loss making company some money. Independent and non-executive director Tan Boon Chai @ Lee Boon Chuan and non-independent and non-executive director and Teh Yee Joo both cited a desire to reduce the commpany’s costs via their resignations. (The Edge)

CAB Cakaran: Felcra collaboration on hold. The long-awaited potential collaboration between CAB Cakaran Corp and the Federal Land Consolidation and Rehabilitation Authority (Felcra) looks to be on the backburner for now. CAB Cakaran had received a letter dated Jan 14 from Felcra saying that the latter was not ready to explore collaboration with CAB Cakaran in the agriculture and aquaculture business activities. (The Edge)

Wellcall: Forms JV with Trelleborg to manufacture composite hose. Wellcall Holdings is teaming up with Swedish based Trelleborg Group to manufacture and sell composite hose and fittings. Wellcall will form a joint venture company with Trelleborg for the said agreement. Trelleborg and Wellcall will hold 51% and 49% respectively. Wellcall will fund its share of the equity participation in the JV company through internally generated funds. (The Edge)

KIP REIT: KIP Mall Kota Warisan may be injected into KIP REIT. KIP Mall Kota Warisan may be injected into KIP Real Estate Investment Trust (REIT). KIP Mall Kota Warisan is part of the 37-acre KIP Sentral development in the Kota Warisan township. KIP Sentral, which is envisioned as Kota Warisan’s future commercial hub, also comprises Core SoHo Suites, shop lots and KIP Hotel. (The Edge)

Aeon Credit: Housing ministry grants moneylending license to Aeon Credit. Aeon Credit Service (M) has been granted a money lending license under the Moneylenders Act 1951 and Moneylenders (Control and Licensing) Regulations 2003 by the Ministry of Housing and Local Government. The license will be valid for a period of 2 years. The approval allows them to undertake any business of those relating to the money lending activities. (The Edge)

Market Update

The FBM KLCI might open higher today as Wall Street ended mostly in the positive territory overnight. The pound swung sharply in the wake of news of a crushing Brexit defeat in parliament for UK Prime Minister Theresa May, initially weakening as much as 1.5% against the dollar before recovering to stand slightly higher on the day. US stocks also overcame a mid-afternoon wobble following the vote, allowing traders to refocus on a package of stimulus measures unveiled by China aimed at stimulating its economy and countering the impact of the trade dispute between Beijing and Washington. The technology sector set the pace, with Netflix a notable riser after it announced price increases for its US subscribers. Financials struggled after earnings from JPMorgan and Wells Fargo disappointed. China will lower value added tax rates for selected industries, and provide tax rebates for others, following the release of weak trade data on Monday. At the closing bell, the S&P 500 ended 1.1% higher at 2,610 — after hitting 2,613— while the Dow Jones Industrial Average rose 0.7% and the Nasdaq Composite gained 1.7%. Across the Atlantic, the pan European Stoxx 600 index rose 0.4%, while the Xetra Dax ended 0.3% higher after initially gaining as much as 1.3%. In London, the FTSE 100 gained 0.6%.

Back home, the FBM KLCI index gained 3.26 points or 0.19% to 1,679.42 points on Tuesday. Trading volume increased to 2.40bn worth RM1.87bn. Market breadth was positive with 413 gainers as compared to 374 losers. In the region, Hong Kong’s Hang Seng index and mainland China’s CSI 300 index both gained 2%, while Tokyo’s Topix rose 0.9%.

Source: PublicInvest Research - 16 Jan 2019

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