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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 27 Mar 2020, 10:29 AM

 

PublicInvest Research Headlines - 9 May 2019

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Economy

US: Mortgage applications bounce up from six-week low. US mortgage applications rebounded from a six-week low, led by a pickup in loan requests for home purchases, as most home borrowing costs fell or held steady, the Mortgage Bankers Association said. The Washington-based group’s seasonally adjusted barometer on mortgage application activity increased 2.7% to 418.1 in week ended May 3 from the prior week’s 407.2, which was the lowest reading since March 15. The group’s seasonally adjusted gauge on purchase mortgage applications rose 4.2% at 270.2 last week. (Reuters)

US: Factories are less upbeat on 2019 sales on hiring, tariffs. US manufacturers remain upbeat about sales this year, though less so than before as a majority say hiring remains difficult and tariffs have raised prices. 55% of producers expect higher 2019 revenue, down from 64% in Dec, an Institute for Supply Management survey showed. Service providers were less optimistic, with the share forecasting sales gains falling to 47% from 57%, according to the poll of purchasing and supply executives that participate in ISM’s monthly surveys. (Bloomberg)

EU: Greece lowers surplus targets in test to deal with creditors. Greece’s government has set its annual primary surplus targets to 2.5% of GDP from 2020 to 2022, challenging an agreement with its creditors in the euro area and the International Monetary Fund (IMF) that called for a primary surplus of 3.5%. Greek Prime Minister Alexis Tsipras said that even with a lower primary surplus Greece will meet its debt obligations and to this end Greece created an escrow account transferring EUR5.5bn (USD6.15bn) from the state’s cash reserves as a guarantee to its creditors. The country’s contribution to debt reduction was to achieve primary surpluses of 3.5% every year. (Bloomberg)

EU: German industry output unexpectedly increases in March. German industrial output rose unexpectedly in March, helped by higher production of consumer and intermediate goods, offering a glimmer of hope for Europe’s biggest economy which is suffering from trade frictions and Brexit uncertainty. Industrial output increased by 0.5% on the month, defying a forecast for a 0.5% fall, data released by the Statistics Office showed on Wednesday. Feb’s reading was revised down to an increase of 0.4% from a previously reported 0.7% rise. (Reuters)

EU: Outlook for German industry still weak after surprise March output rise. German industrial output unexpectedly increased in March, helped by more construction and consumer goods production, but the economy ministry warned the outlook remained subdued as Europe’s biggest economy suffered from trade frictions and Brexit nerves. Industrial output increased by 0.5% for the month, exceeding a forecast for a 0.5% fall. The business climate in the manufacturing sector became dimmer. Therefore a subdued industrial situation in the coming months is still to be expected. (Reuters)

China: April exports unexpectedly fall but imports rebound as fresh US tariffs loom. China’s exports unexpectedly shrank in April but imports surprised with their first increase in five months, painting a mixed picture of the economy as Washington ratchets up pressure on Beijing with threats of more punishing tariffs. The latest trade data, which would normally be pored over for clues on how the world’s second-largest economy is faring, has been overshadowed by worries that the US-China trade war is escalating, rather than nearing a resolution as many investors had expected. (Reuters)

Markets

Maybank (Neutral, TP: RM9.90): Revises base rate and base lending rate downwards after OPR cut. Malayan Banking (Maybank) will revise its base lending rate (BLR) and base rate (BR) by 20bps in line with the cut in BNM’s Overnight Policy Rate (OPR) to 3% on May 7. The group said its BR would drop 20bps to 3.05% per annum from 3.25%, while its BLR would be revised to 6.7% per annum from 6.9%. Maybank’s Islamic BR and BLR will also be reduced by 20bps to 3.05% per annum (from 3.25%) and 6.7% per annum (from 6.9%) respectively. Furthermore, its fixed deposit rates would also be adjusted 20bps downwards. (The Edge)

Inta Bina: Bags RM178.2m serviced apartment job. Inta Bina Group has bagged a contract to build two blocks of serviced apartments from Southville City SB for RM178.2m. Its wholly-owned unit Inta Bina SB accepted the letter of award on Monday, the group said. The completion period for Phase 1 and Phase 2 of the project will be 30 and 31 months respectively from the date of commencement. (The Edge)

Gadang: To raise up to RM62.1m through private placement. Gadang Holdings is proposing a private placement to raise up to RM62.12m. Gadang said it will issue up to 82.8m new ordinary shares, representing not more than 10% of the enlarged issued shares of 828.2m as at May 7. It said the issue price of the placement shares will be determined and fixed by the board at a later date but explained that it will be priced at no more than 10% discount to the 5- day volume weighted average market price (5D-VWAP) of Gadang shares immediately before the price fixing date. (The Edge)

Amprop: In JV to buy an office building in Singapore. Amcorp Properties (Amprop) is acquiring an effective stake of 20% in two premium Grade A office towers in Tampines Grande, Singapore, which involves a funding commitment of SGD24m (RM73.2m). It said its wholly-owned subsidiary Amprop Synergy Pte Ltd signed a JV agreement to subscribe to 40% equity interest in SRIF Amcorp Pte Ltd (JVCo) for SGD40 (RM122). In turn, JVCo owns a 50% stake in Ascend TGrande Pte Ltd, which is in the process of buying the commercial blocks. (The Edge)

Pasdec: To submit annual report 2018 before May 31. Pasdec Holdings expects to release its audited annual report 2018 (AR 2018) to Bursa Malaysia Securities not later than May 31, 2019. It said the audit of its South African subsidiaries, Pasdec Resources SA Ltd (PRSA) and its group of companies had not been completed yet. Pasdec said this was based on the discussions between the external auditors of PRSA, its group of companies and its external auditors, Messrs. Hanafiah Raslan & Mohamad (HRM). Hence, this had delayed the conclusion of the audit of Pasdec Group for FY18. (StarBiz)

Tune Protect: Appoints Foo CEO of Malaysia insurance business. Tune Protect Group has appointed William Foo as CEO of Tune Insurance Malaysia. It said Foo brings with him more than 25 years of experience, having served in a variety of roles in the general insurance industry. (StarBiz)

Market Update

The FBM KLCI might open flat today as Wall Street was unable to hang on to the afternoon gains piled on in the wake of Donald Trump tweeting that Chinese officials were coming to the US to make a deal on trade. The US President’s social media message, for a while, offered investors some respite from concerns this week that the two sides could be at an even tougher impasse, particularly given Mr Trump tweeted at the weekend the US would raise tariffs on Chinese imports on Friday if Washington and Beijing could not reach a consensus. Chinese vice-premier Liu He is due to arrive in Washington on Thursday for an abbreviated round of trade talks, although there is still a substantial amount of market uncertainty around any potential outcome. The S&P 500 closed 0.2% lower, having been up as much as 0.5%. The Nasdaq Composite also faded into closing bell, finishing about 0.26% lower, while the Dow Jones Industrial Average clung on to finish just 2.2 points higher. Major European bourses managed to swing higher despite riding in on losses for markets in Asia. Germany’s Dax 30 rose 0.7% and the UK’s FTSE 100 gained 0.2%. The Europe-wide Stoxx 600 was up 0.2%.

Back home, the FBM KLCI index lost 5.82 points or 0.36% to 1,633.55 points on Wednesday. Trading volume decreased to 2.47bn worth RM2.06bn. Market breadth was negative with 265 gainers as compared to 551 losers. Mainland China’s CSI 300 lost 1.4% and Hong Kong’s Hang Seng was down 1.2%. Japan’s Topix fell 1.6%, while the S&P/ASX 200 in Australia fell 0.7%.

Source: PublicInvest Research - 9 May 2019

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