PublicInvest Research

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


PublicInvest Research Headlines - 11 Oct 2019

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US: Consumer prices unexpectedly unchanged in September. Consumer prices in the US were essentially flat in September, according to the Labor Department, with higher prices for shelter and food offset by declines in prices for energy and used cars and trucks. The Labor Department said its CPI was unchanged in September after  inching up by 0.1% in August. Economists had expected another 0.1% uptick. Energy prices extended the steep drop seen in the previous month, tumbling by 1.4% in September after plunging by 1.9% in August. Gasoline prices led the way lower once again. Meanwhile, the report said food prices inched up by 0.1% in September after coming in unchanged for three straight months. The uptick in food prices came as five of the six major grocery store food group indexes increased over the month. (RTT)

US: Weekly jobless claims unexpectedly drop to 210,000. The Labor Department showed a modest decrease in first-time claims for US unemployment benefits in the week ended October 5th. The report said initial jobless claims dropped to 210,000, a decrease of 10,000 from the previous week's revised level of 220,000. Economists had expected jobless claims to come in unchanged compared to the 219,000 originally reported for the previous week. Meanwhile, the Labor Department said the less volatile four-week moving average crept up to 213,750, an increase of 1,000 from the previous week's revised average of 212,750. The report said continuing claims also rose by 29,000 to 1.684m in the week ended September 28th. (RTT)

Japan: Core machine orders sink 2.4% in August. Core machine orders in Japan fell a seasonally adjusted 2.4% MoM in August, the Cabinet Office said - standing at JPY875.3bn. That missed expectations for a flat reading following the 6.6% decline in July. On a yearly basis, core machine orders plummeted 14.5% - again missing forecasts for a decline of 8.4% following the 0.3% gain in the previous month. The total value of machinery orders received by 280 manufacturers operating in Japan increased by 11.8% MoM and fell 0.2% YoY in August. Government orders skyrocketed 36.8% MoM and 37.7% YoY in August, while overseas orders jumped 21.3% MoM but fell 9.2% YoY. Orders through agencies rose 2.5% MoM and lost 4.8% YoY. (RTT)

Japan: Overall bank lending gains 2.0% in September. Overall bank lending in Japan was up 2.0% YoY in September - coming in at JPY539.350trn. That was in line with expectations and up from 2.1% in August. Excluding trusts, lending was up an annual 2.2%- unchanged from the previous month and in line with forecasts. Lending from trusts rose 1.0% YoY to JPY69.575trn, while lending from foreign banks gained 5.0% to JPY3.380trn. (RTT)

Indonesia: To relax rules, launch more special economic zones to attract investment. Indonesia will expand and simplify tax incentives it offers for investment in special economic zones (SEZs) and develop more such areas, aiming to attract over USD50bn investment into those zones in the next decade. Authorities in Indonesia are concerned that it is falling behind other countries in the region in winning investment from companies moving supply chains out of China to escape higher tariffs amid the US-China trade war, despite it being Southeast Asia's largest economy. Indonesia's chief economic affairs minister, said the government will simplify rules on its existing tax holiday incentives for investors looking to build facilities in special zones. (Reuters)

Malaysia: Needs to widen SST coverage to rebuild fiscal buffers – World Bank. The government needs to diversify and increase its revenue resources, including widening coverage of the SST to rebuild fiscal buffers, says the World Bank Group. It said exercises towards diversifying revenue resources were needed, as Malaysia’s comparatively high level of government liabilities would continue to exert constraints on fiscal space available in the event of macroeconomic shocks. World Bank said the challenge of the government now is to widen coverage of the SST. (Bernama)


MISC: Bags RM2.98bn jobs from Exxon Mobil. MISC has secured two contracts from Exxon Mobil Corp with an estimated combined contract value of USD711m (RM2.98bn). It had signed two time charter parties (TCPs) with Exxon Mobil’s wholly-owned subsidiary SeaRiver Maritime LLC for the time charter of two newbuild liquefied natural gas carriers for operations in international waters. Pursuant to the TCPs, the vessels will be chartered by SeaRiver for a firm period of 15 years. (SunBiz)

MAHB: Air traffic up 7.6% YoY in Sept despite haze. The number of passengers passing through the 39 airports Malaysia Airports Holdings (MAHB) manages in the country in Sept rose 7.6% YoY, thanks to an increase in the average load factor for both domestic and international sectors. The impact from the haze was minimal. The airport operator handled 8.35m passengers in Sept compared with 7.76m passengers a year earlier. International and domestic passenger movements increased by 3.6% and 11.9% respectively over Sept 2018. KLIA handled 4.91m passengers in Sept, a growth of 6.1% from 4.63m passengers recorded a year ago. (The Edge)

WZ Satu: Unit to supply green energy to TNB for 21 years . WZ Satu's subsidiary, WZS Biogas Jerantut SB, will supply green energy generated by its proposed biogas power plant in Jerantut, Pahang, to TNB for 21 years. The civil engineering and construction group said it will gain RM3m to RM4m in revenue per year. The proposed plant, which is due to start operation in January 2022, is expected to generate up to 1 MW per hour, which is equivalent to the usage of about 500-600 households per day. (Bernama)

Careplus: Buys remaining stake in handglove unit. Careplus Group is spending RM24m to gain full control of its loss-making subsidiary Careglove Global SB, which makes rubber gloves for the Brazilian market. It is buying the remaining 49.99% stake in Careglove from AJJ Holding Inc, whose ultimate shareholder is Renato Silveira Joiozo. Under the sale agreement, Careglove must declare RM23.41m as dividends to its shareholders, of which the total dividend payable to AJJ will be RM11.7m. Careplus intends to finance the acquisition using internal funds. (The Edge)

Kejuruteraan Asastera: To raise up to RM27m via private placement. Kejuruteraan Asastera plans to raise up to RM27.09m via a private placement to third-party investors to be identified later to fund the expansion plan of its customised energy efficiency solutions business and future acquisitions. The proposed placement entails the issuance of up to 70.57m new shares, representing up to 20% of the total number of its issued shares. (The Edge)

Guan Chong: Allocates about RM280m to build cocoa grinding facility in Cote D'Ivoire. Guan Chong has set aside between approximately RM230 to RM280m to construct a new 60,000 metric tonne (MT) cocoa grinding facility in a West African country, Cote D'Ivoire. The new facility would see GCB operations expand to a major cocoa bean producing country and at the same time allow the group to grow its Europe market presence due to the close proximity and similar time zone. The new factory is expected to be commissioned in the first quarter of 2021, which would bring the group’s total grinding capacity to 310,000 MT, from 250,000 MT currently. (Bernama)

Market Update

The FBM KLCI might open stronger today after US stocks closed higher on Thursday as investors took an optimistic stance ahead of the resumption of high-level trade talks in Washington between the US and China. Currency markets also drew some interest, with renewed hopes for a Brexit deal lighting a fire under the pound and putting it on track for its biggest one-day jump in seven months. On Wall Street, the S&P 500 finished 0.6% higher, while the Nasdaq Composite and Dow Jones Industrial Average each also rose 0.6%. Liu He, China’s vice premier, is to begin the latest session of trade talks with Robert Lighthizer, US trade representative, and Steven Mnuchin, the US Treasury secretary, on Thursday and Friday. US President Donald Trump tweeted that he would be meeting Mr He on Friday, a positive sign for the talks. In Europe, the region’s Stoxx 600 ended 0.7% higher, overcoming a shaky start to its session on Thursday as investors reacted to a flurry of trade headlines that rippled through markets overnight.

Back home, the FBM KLCI index gained 0.64 of a point or 0.04% to 1,551.87 points on Thursday. Trading volume increased to 2.18bn worth RM1.52bn. Market breadth was negative with 339 gainers as compared to 384 losers. The regional markets were largely higher. Hong Kong’s Hang Seng index recovered from early losses to finish 0.1% higher. The CSI 300 of Shanghai and Shenzhen stocks was up 0.8%.

Source: PublicInvest Research - 11 Oct 2019

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