PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 3 Jul 2020, 10:20 AM


PublicInvest Research Headlines - 2 Jan 2019

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US: Humming US factories end 2018 on sour note amid trade war. Five Federal Reserve indexes of regional manufacturing all slumped in Dec, the first time they’ve fallen in unison since May 2016 and the latest evidence that a pillar of the US economy has started to wobble heading into next year. The Dallas Fed’s factory index unexpectedly contracted this month, falling to a two-year low of minus 5.1 from 17.6 in Nov, and the steepest decline since 2013. The district bank covers the oil producing region of Texas, northern Louisiana and southern New Mexico. Oil prices are down about 40% from a nearly four-year high in Oct. More than 20% of manufacturers said that their outlook worsened this month, according to the regional Fed report released Monday. “Expectations regarding future business conditions remained positive but retreated notably in Dec,” it said. (Bloomberg)

EU: Greece retail sales fall most since Aug 2016. Greece retail sales in Oct fell at the fastest pace since the middle of 2016, figures from the Hellenic Statistical Authority showed on Monday. Retail turnover fell 2.2% YoY in Oct, after a rise of 4.5% in Sept. The volume of retail sales dropped 4%. Sales decreased for the first time since Feb and at the fastest pace since Aug 2016, when sales fell 2.6%. The annual decline was largely due to a 7.3% slump in pharmaceutical products and cosmetics, and a 2.6% decline in clothing and footwear. MoM, retail turnover dropped 6.2% and the volume slid 6.6% in Oct. (RTT)

China: Factory activity shrinks for first time in over two years, 2019 looks tougher. China’s factory activity contracted for the first time in over two years in Dec, highlighting the challenges facing Beijing as it seeks to end a bruising trade war with Washington and reduce the risk of a sharper economic slowdown in 2019. The increasing strain on factories signals a continued loss of momentum in China, adding to worries about softening global growth, especially if the Sino-US dispute drags on. The official PMI, the first snapshot of China’s economy each month, fell to 49.4 in Dec, below the 50-point level that separates growth from contraction, a National Bureau of Statistics (NBS) survey showed on Monday. It was the first contraction since July 2016 and the weakest reading since Feb 2016. Analysts had forecast it would dip to 49.9 from 50.0 the previous month. (Reuters)

China: Services activity picks up in Dec. Growth in China’s services industry picked up in Dec after a two-month slowdown, an official survey showed, offering some respite for the slowing economy though the outlook remains gloomy as domestic and external risks to growth rise. The official non-manufacturing PMI released on Monday rose to 53.8 from 53.4 in Nov, well above the 50-point mark that separates growth from contraction. The services sector accounts for more than half of China’s economy, with rising wages giving Chinese consumers more spending power. But consumer demand and confidence have been faltering recently in a sign of growing pressure on the economy. (Reuters)

China: To seek talks with India to push Asia trade pact. China has sought talks with India to allay concerns on a regional free trade pact it is spearheading, two people familiar with the matter said, as Beijing seeks newer markets amid the ongoing trade war with the US. The 16- country Regional Comprehensive Economic Agreement has been in the works for a while and China is keen to conclude it by end of 2019, the people said, asking not to be identified as the matter is not public. India’s wariness about a possible flood of Chinese goods, and its demand for looser immigration rules for its tech professionals remain sticking points. China’s inability to close the trade deal highlights the continuing suspicion among its Asian trading partners over Beijing’s effort to increase its influence in the region. (Bloomberg)

India: Cuts tax on palm oil imports, Malaysia to gain most. India has cut import taxes on crude and refined palm oil from Southeast Asian (Asean) countries after a request from suppliers, a government notification said. The reduction will lead to higher imports of palm oil by the world's biggest edible oil buyer in coming months as it would narrow the difference between the tropical vegetable oil and competitors such as soyoil and sunflower oil. The duty on crude palm oil was lowered to 40% from 44%, while a tax on the refined variety was cut to 50% from 54%, according to the notification issued late on Monday. (Reuters)

Malaysia: Producer prices fall in Nov. Malaysia's producer prices fell in Nov, after rising in the previous month, figures from the Department of Statistics showed on Monday. Producer prices decreased 2.9% YoY in Nov following a rise of 0.7% in Oct. In Sept, prices fell 0.2%. Among sectors, the manufacturing producer prices dropped 1.8% and prices in the agriculture, forestry and fishing sector registered a decline of 22.7%. The price index for mining rose 4.5% annually in Nov. On a monthly basis, producer prices fell by 2.8% in Nov, after a 0.3% increase in Oct. (RTT)

Singapore: Export-reliant economy ends 2018 with slower growth. Singapore’s economic growth slowed toward the year-end as global trade tensions and rising interest rates took their toll on the export reliant city state. GDP rose an annualized 1.6% in the three months through Dec from the third quarter, according to a preliminary estimate from the Ministry of Trade and Industry Wednesday. The median forecast in a Bloomberg News survey of economists was for a 3.6% expansion. As one of Asia’s most export-reliant nations, Singapore’s economic outlook is closely tied to global trade and growth. (Bloomberg)


PetGas: Buys minimum amount of gas, LNG required to operate pipeline, regasification terminals. Petronas Gas (PetGas) entered into three sale and purchase agreements (SPAs) with Petroliam Nasional (Petronas) to buy the minimum amount of gas required to operate its Peninsula gas utilisation pipeline and liquefied natural gas (LNG) to run its regasification terminal’s storage tank in Melaka and Johor. PetGas said the total purchase consideration for the Linepack and Heel is RM108m. (The Edge)

Vizione: Bags RM378m roadwork-related project in Sabah. Vizione Holdings has bagged a RM377.6m contract from Permata Rebana SB to supply materials, labour and project management services relating to road works in Kota Kinabalu, Sabah. Vizione said its wholly-owned subsidiary Wira Syukur (M) SB has accepted a letter of award from Permata Rebana for the project. (The Edge)

PUC: Buys rest of Pictureworks from CEO for RM168m. PUC is buying the rest of Pictureworks Holdings SB it does not already own from its group MD and CEO Cheong Chia Chou and two other companies for RM167.5m. PUC said it plans to acquire 12.3m shares or a 67% stake in Pictureworks from Cheong, Superb Go SB and Beauty World Holdings Pte Ltd (BWH), through a combination of new share issuance and cash. In a separate statement, Cheong said PUC had first acquired a 33% stake in Pictureworks in June 2018 and since then, Pictureworks has contributed positively to the group and its earlier investment is expected to yield better results as Pictureworks is expected to exceed the 2018 guaranteed profit of RM14.8m. (The Edge)

Pintaras Jaya: Wins piling jobs worth RM103m. Pintaras Jaya's unit has been awarded three new piling contracts worth a combined RM103m. The group said the contracts — awarded to its wholly owned Singapore-based subsidiary Pintary International Pte Ltd — have varying contract periods, ranging from three to eight months. (The Edge)

MAHB: To start communication infrastructure upgrade at KLIA. Malaysia Airports Holdings (MAHB) will be embarking on upgrading works of the Kuala Lumpur International Airport's (KLIA) communication infrastructure starting from Jan 1. The airport operator said the initiative — meant to enhance overall coverage and capacity of the airport's cellular network — is expected to be completed in phases over three months. (The Edge)

Yinson: Gets six-month extension for charter contract with PTSC. Yinson Holdings said its Vietnam associate PTSC Asia Pacific Pte Ltd (PTSC AP) has entered into an addendum to the bareboat charter interim contract with Petrovietnam Technical Services Corp (PTSC) to extend the tenure for a further six months commencing Jan 1 to June 30, 2019. The group did not disclose the contract value of the extension. (The Edge)

FGV: Scraps collaboration plan with Sabah Forestry Department. FGV Holdings has aborted its plan to collaborate with the Sabah Forestry Department to explore the rehabilitation of riparian and forest buffer zone which lies between the forest reserve and the FGV estate in Sahabat, Sabah. FGV said both parties have agreed not to renew the Memorandum of Understanding (MoU) entered into on Nov 8, 2016 upon its expiry on Dec 7, 2018. (The Edge)

Market Update

The FBM KLCI might start the year higher after a positive performance on Wall Street last Monday. Global stock markets closed out their worst year since the financial crisis, leaving investors bruised and braced for further volatility in the coming months. The equity market retreat of the past year has been stoked by concerns of a slowing global economy and tightening monetary policy. Mounting geopolitical tensions, from the escalating trade war between the US and China to Brexit, have also rattled investors and weighed heavily on equities. At the closing bell, the S&P 500 rose 0.9% to 2,506.85, after dipping into the red earlier in the session. The Dow Jones Industrial Average was 1.2% higher and the Nasdaq Composite 0.8% higher. A weekend tweet by US president Donald Trump, citing “big progress” in trade talks with Chinese president Xi Jinping after a phone call on Saturday was seen by some as a positive force in the year’s last trading day. Gains in past few sessions cut the year to date loss for the S&P 500 to 6.2%, but 2018 remained the worst year for US, London and European indices since 2008.

Back home, the FBM KLCI index lost 1.49 points or 0.09% on Monday. Trading volume increased to 1.57bn worth RM1.33bn. Market breadth was positive with 429 gainers as compared to 361 losers. Although most markets in region were closed on Monday, and Hong Kong’s Hang Seng index was up 1.3%.

Source: PublicInvest Research - 2 Jan 2019

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