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Author: PublicInvest   |   Latest post: Tue, 28 Jan 2020, 3:43 PM

 

PublicInvest Research Headlines - 9 Oct 2019

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Economy

US: Producer prices show unexpected decrease in September. Producer prices in the US unexpectedly decreased in September,  according to a report released by the Labor Department. The Labor Department said its PPI for final demand fell by 0.3% in September after inching up by 0.1% in August. The drop surprised economists, who had expected another 0.1% uptick. The unexpected decrease in producer prices came amid another steep drop in energy prices, which plunged by 2.5% in September, matching the nosedive seen in the previous month. However, excluding the continued plunge in energy prices as well as a modest increase in food prices, core producer prices also slid by 0.3% in September after climbing by 0.3% in August. (RTT)

EU: German industrial output surprise rebound suggests economy to avoid recession. Surprise rebound in German industrial production in August suggests that the biggest euro area economy may avoid recession, but the sector remains in downturn due to weak demand. Production grew 0.3% MoM in August; figures from the Federal Statistical Office showed on, defying expectations for a 0.2% fall. The increase was driven by a 0.7% growth in industrial production, while energy production shrunk 1.7% and construction output decreased 1.5%. July's decline in production was revised to 0.4% from 0.6%. Among industrial groups, production of intermediate goods grew 1% monthly and that of capital goods rose 1.1%. (RTT)

China: Services sector growth falls to seven-month low – Caixin PMI. China’s services sector grew at its slowest pace in seven months in September despite a strong increase in new orders, as operating expenses continued to rise at the end of 3Q, a private survey showed. Services account for more than half of China’s economy, providing a key buffer as persistent trade tensions with the US weigh heavily on the country’s manufacturing sector. The Caixin services PMI fell to 51.3 last month, the weakest since February, versus August’s 52.1. The fall was in line with the marginal drop in the official non-manufacturing PMI published by the National Bureau of Statistics. (Reuters)

China: Oil imports from ship-to-ship transfers surge in September. Chinese oil imports from ship-to-ship transfers surged last month as flows from some traditional suppliers were crimped by the White House’s aggressive trade and foreign policies. Some 910,000 tons of crude, three times as much as in August, was offloaded at Chinese ports after being transferred in the South China Sea, according to ship tracking data compiled by Bloomberg. It’s unclear where this oil came from, but moving crude from one vessel to another at sea is a common way of disguising the origin of cargoes. (Bloomberg)

Japan: Has JPY2,157.7bn current account surplus in August. Japan had a current account surplus of JPY2,157.7bn in August, the Ministry of Finance said - up 18.3% YoY. That beat expectations for a surplus of JPY2,100bn and was up from the JPY1,999.9bn surplus in July. The trade balance reflected a surplus of JPY50.9bn, beating forecasts for JPY36.4bn following the JPY74.5bn deficit in the previous month. Imports were down 12.7% YoY to JPY6,029.9bn, while exports fell an annual 8.6% to JPY6,080.8bn. (RTT)

Japan: Household spending climbs 1.0% YoY in August. The average of household spending in Japan was up 1.0% YoY in August, the Ministry of Communications and Internal Affairs said - coming in at JPY296,327. That was in line with expectations and up from 0.8% in July. The average of monthly income per household stood at JPY521,571, down an annual 2.1%. Among the individual components, spending was up for food, furniture, clothing, medical care, transportation and recreation. Spending was down for housing, fuel and education. (RTT)

Markets

MSM: Sells Ladang Chuping to F&N for RM156m . MSM Malaysia Holdings is selling 4,453 hectares of plantation land, known as Ladang Chuping in Perlis, to Fraser & Neave Holdings (F&N) for RM156m cash. The sugar producer said the proposed disposal is part of its asset rationalisation exercise and focus on sugar refining. "With negligible revenue generating activities, it is less damaging to proceed with the disposal than to retain the land at high operating costs," it said in a filing with Bursa Malaysia. (The Star)

PRG: Ventures into timber logging to diversify revenue . PRG Holdings, is now venturing into the timber export business as a means to diversify its revenue stream amidst an economic slowdown. The loss-making group said its financial performance has been volatile due to the decline in sales of its elastic textile and webbings products as well as the slowdown in the Malaysian property development and construction industries. The group secured its shareholders' approval to buy two teak tree plantation lands, measuring 364.79 hectares, worth RM89.2m, located in Kelantan, from Alifya Forestry SB. (The Edge)

Axis REIT: Acquires industrial property in Nilai for RM50m . Axis REIT is buying a property in the industrial area of Nilai from KPlastics Industries SB for RM50m. The acquisition will be accretive to Axis-REIT’s distributable income, and enable the fund to strengthen its portfolio of industrial properties. The leasehold land with a gross floor area of 246,500 sq ft houses a single-storey factory with a double-storey office annexed. It is currently being used for the manufacturing and sale of plastics and packaging products. (The Edge)

Mi Technovation: Proposes one-for-two bonus issue . Mi Technovation has proposed a bonus issue of up to 250m new shares on the basis of one bonus unit for every two existing shares held, to reward shareholders of the semiconductor assembly equipment solutions provider. The proposed bonus issue is not expected to have any effect on the earnings of Mi Technovation group for the financial year ending Dec 31, 2019 (FY19). (The Edge)

Willowglen: Wins RM10m TNB data management contract. Willowglen MSC has secured a RM10m contract from Tenaga Nasional Bhd. The two-year contract is for the provision of data management plan and implementation services in TNB distribution network. The contract will be completed by Oct 7, 2021. (The Star)

Kluang Rubber: Declares total dividends of 6 sen. Kluang Rubber Co (Malaya) has proposed a special dividend of five sen per share for the FYE June 30, 2019 (FY19), on top of a first and final dividend of one sen. They will be payable on Jan 6, 2020, to shareholders whose names appear on the record of depositors at the close of business on Dec 12, 2019. (The Edge)

IDB Technologies: To further tap into Asean market. IDB Technologies which was listed on the LEAP Market of Bursa Malaysia, aims to expand further into the Asean region, particularly Cambodia, Singapore, Vietnam and Myanmar, spurred by the incentives to boost tourism by the respective government. This is in line with the anticipated boom in tourism and the corresponding demand for the hotel and accommodation sector. (SunBiz)

Market Update

The FBM KLCI might open softer today after US stocks staged a late session sell-off as the Trump administration’s decision to impose visa restrictions on Chinese government officials connected to the mass detention of Uighurs in western China revived concerns about trade tension between the world’s two biggest economies. That took investors’ focus off Jay Powell, who shortly before the visa news, announced that the Federal Reserve would resume purchases of Treasuries in an effort to prevent a repeat of the recent disruption in short-term lending markets. The late tumble saw the S&P 500 finish 1.6% lower, the fourth move of 1% or more in either direction — or its third 1% plus drop — in the space of six sessions. The Nasdaq Composite shed 1.7% and the Dow Jones Industrial Average was down 1.2%. The broader fall came against the backdrop of declining borrowing rates as investors, unnerved by another flare-up in US-China trade tension, sought the relative safety of government debt. In Europe, the broad Stoxx 600 benchmark and Germany’s Dax were each down 0.9%, while France’s Cac 40 shed 0.9%. The UK’s FTSE 100 was down a relatively milder 0.4%.

Back home, the FBM KLCI index lost 0.21 points or 0.01% to 1,558.79 points on Tuesday. Trading volume increased to 2.41bn worth RM1.72bn. Market breadth was positive with 428 gainers as compared to 381 losers. China’s CSI 300 was up 0.6% on its return following a week’s holiday. In Hong Kong, the Hang Seng index was also 0.3% higher, rising from a five-week low despite four days of often violent protests after the city’s chief executive invoked a colonial era emergency law to ban demonstrators from wearing face masks. South Korea’s Kospi rose 1.2%, and technology shares outperformed across Asia, after Samsung’s third-quarter results beat forecasts.

Source: PublicInvest Research - 9 Oct 2019

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