PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 24 Feb 2020, 10:29 AM


PublicInvest Research Headlines - 19 Feb 2019

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Global: Economy stuck with downside risks in near term. The global economy’s loss of momentum has left expansion now looking like its weakest since the global financial crisis, a development that’s already sparked a dramatic shift among central banks. A UBS model suggests world growth slowed to a 2.1% annualized pace at the end of 2018, which it says would be the weakest since 2008-2009. An early reading for this quarter shows a slight improvement, but the numbers still mean there’ll need to be a dramatic improvement to reach the 3.2% pace UBS has forecast for the three months as a whole. Unfortunately, there hasn’t been much sign of that. (Bloomberg)

EU: Greece at risk of not getting euro zone cash as reforms lag. Greece is at risk of not getting some EUR750m next month that it won under a debt relief deal with the euro zone last year because it has not completed agreed reforms, euro zone officials said. The money is part of about EUR4.8bn of profits from Greek bonds held by euro zone central banks, to be handed back to Athens by mid-2022 in semi-annual tranches and a waiver of the step-up interest rate margin on part of the euro zone loans. Together, the two measures add up to EUR750m every six months. The money was designed as an incentive for Athens to continue with hard-won reforms adopted under its three bailouts since 2010, worth more than EUR280bn in total. (Reuters)

EU: German growth to remain subdued at least in first half of 2019, says Bundesbank. Germany’s economy will continue to struggle in the first half of the year but indicators still suggest that the slowdown could be temporary with a rebound in the second half possible, the Bundesbank said in a monthly economic report. The German economy stagnated in the 4Q of last year and policymakers are increasingly concerned that weakness in Europe’s biggest economy could be bigger and longer than earlier thought, a risk to the entire continent. Weak orders in manufacturing, increasingly gloomy sentiment indicators and sluggish investments all suggest that the economy is unlikely to regain momentum during the winter months. (Reuters)

UK: Housing affordability improves at fastest pace in 8 years - right move. UK housing affordability improved at the fastest pace in eight years in Feb, but annual house price growth remained weak, survey data from the property market data website Rightmove showed. UK's annual average wage growth of 3.4% outstripped asking prices at the fastest rate since 2011, the survey found. Average asking prices rose 0.7% MoM in Feb, after a 0.40% rise in Jan. Prices rose for a second straight month in Feb. Compared to the same month a year ago, house prices were 0.2% in Feb, which was the weakest pace since 2009. (RTT)

Japan: Business mood sours, tough year seen ahead. Japanese business sentiment worsened in Feb to levels last seen in late 2016, the Reuters Tankan poll showed, in a sign companies took a hit from weakening demand both at home and abroad in the face of slowing global growth and trade friction. The monthly poll, which tracks the BOJ closely watched quarterly tankan survey, found manufacturers’ mood sliding for a fourth straight month and service-sector morale falling for the first time in four months. The worsening business sentiment underscores the risks Japan’s economy faces this year, including an intensifying US-China trade war and a planned nationwide sales tax hike in Oct. (Reuters)

Malaysia, China: Trade volume at record high of RM443bn. Total trade volume between Malaysia and China reached a record high of USD108.6bn (RM443bn) in 2018, with the number of Chinese visitors into Malaysia increasing 29% to 2.94m last year. Malaysia-China Business Council chairman Tan Kok Wai said overall relations between Malaysia and China remain on the right track despite the controversies regarding some local large scale projects in the country. “Today, under the circumstances of the ceaseless China-US trade war and the uncertainty of the global economic outlook, we must remain cautious yet optimistic and work diligently in a practical and realistic spirit,” he said. (StarBiMarkets

Berjaya Land: To venture into property development in Iceland. Berjaya Land (B-Land) is proposing to acquire a 100% stake in Geirsgata 11 EHF (GE11) and consequently settle the Iceland-based company's loan for a collective amount of USD13.99m (about RM57.54m) in its bid to venture into Iceland's property market. Its unit Berjaya Reykjavik Investment Ltd (BRIL) had entered into an agreement with Fiskitangi EHF (FEHF) and Utgerdarfelag Reykjavikur HF (URHF) for the two proposals. (The Edge)

Deleum: Bags gas lift valve contract from Petronas Carigali. Deleum has bagged a three-year contract to provide gas lift valves and insert strings equipment, accessories and services to Petronas Carigali SB. Its wholly-owned subsidiary Deleum Oilfield Services SB has received a letter of award from Petronas Carigali. The contract will commence on Jan 7 and has a 1-year extension option. The contract is expected to contribute positively towards the group's earnings and net assets per share for the duration of the contract. (The Edge)

DBE Gurney: Jointly operate trading with Thailand’s FFCL, distribution agency. DBE Gurney Resources is partnering Thailandbased Farmmesh Foods Co Ltd (FFCL) to jointly open and operate a trading and distribution agency in Malaysia. DBE Poultry SB has entered into a memorandum of understanding with FFCL, where both companies will be operating the trading and distribution channel in Malaysia through a JV company, with 70% ownership by DBE Poultry and 30% by FFCL. FFCL is involved in the retailing of meat products. (The Edge)

PetGas 4Q net profit down 35%, declares 22sen dividend. Petronas Gas (PetGas) net profit fell 34.7% to RM317.9m in the 4QFY18, from RM486.7m a year ago, due to share of losses from a joint venture company, Kimanis Power SB (KPSB). The losses arose due to de-recognition of deferred tax assets (DTA) amounting to RM124.3m (being 60% share of the group) in relation to certain tax benefits. (The Edge)

Batu Kawan: 1Q net profit up 9.6% on profitable investment holdings segment. Batu Kawan Bhd 1Q net profit rose 9.61% to RM136.67m or 34.19sen per share, from RM124.69m or 30.98sen per share a year ago, mainly attributable to its profitable investment holdings segment. Revenue for the 1QFY19 however fell 20.77% to RM4.22bn, from RM5.32bn. Its investment holdings segment recorded a substantial increase in net profit of RM98.12m, versus a loss of RM100.54m previously. (The Edge)

CCM Duopharma: 4Q net profit up 18%, proposes 4sen dividend. CCM Duopharma Biotech 4Q net profit rose 18.45% to RM14.37m from RM12.13m a year ago, due to higher revenue and changes in accounting policies arising from adoption of the MFRS 9. EPS for the quarter ended Dec 31, 2018 rose to 2.17sen from 1.86sen. Quarterly revenue was up 3.01% to RM115.63m, from RM112.25m previously. CCM Duopharma has declared a final dividend of 4sen. (The Edge)

Guan Chong: Declares special dividend as 4Q net profit almost doubles. Guan Chong’s net profit nearly doubled to RM63.02m or 13.19sen per share in the 4QFY18, up 92.6% from RM32.7m or 6.84sen per share last year, thanks to improved margins. Quarterly revenue grew 32.5% to RM651.29m from RM491.44m a year ago, on the back of higher sales volume of cocoa products. (The Edge)

Market Update

The FBM KLCI might continue to trend higher today as the regional equities kicked off the week with strong gains, propelled by a solid close on Wall Street on Friday. Energy stocks outperformed as oil prices touched their highest levels in months due to output cuts by key suppliers. Stocks across Asia Pacific got off to a robust start after broad declines on Friday, as trade war optimism on Wall Street in the interim fed through to markets in the region. The Stoxx Europe 600 rose by 0.2% to 369.78 on Monday, after the index finished at a four-month high on Friday, rising 3% for the week. France’s CAC 40 added 0.3% to 5,168.54 while the FTSE 100 was down 0.3% to 7,219.47, after finishing the week up 2.3%. Germany’s DAX 30 finished flat at 11,299.20.

Back home, the FBM KLCI index gained 3.91 points or 0.23% to 1,692.74 points on Monday. Trading volume decreased to 2.75bn worth RM1.65bn. Market breadth was positive with 446 gainers as compared to 378 losers. Hong Kong’s Hang Seng was up 1.7% with gains for all market segments, while in China the CSI 300 of major Shanghai- and Shenzhen-listed stocks was up 2.5%. Tokyo’s Topix jumped 1.5%. Trade talks would resume in Washington later on Monday, a day when markets in the US was shut for the Presidents Day national holiday.

Source: PublicInvest Research - 19 Feb 2019

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