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Author: PublicInvest   |   Latest post: Thu, 23 Jan 2020, 9:38 AM

 

PublicInvest Research Headlines - 27 Nov 2019

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Economy

US: Consumer confidence unexpectedly shows continued decrease in Nov . Reflecting a softening in consumers' assessment of current conditions, the Conference Board released a report showing US consumer confidence unexpectedly declined for a fourth consecutive month in Nov. The Conference Board said its consumer confidence index fell to 125.5 in Nov from an upwardly revised 126.1 in Oct. The unexpected drop by the headline index came as the present situation index slumped to 166.9 in Nov from 173.5 in Oct. "The decline in the Present Situation Index suggests that economic growth in the final quarter of 2019 will remain weak," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. (RTT)

US: New home sales pull back from upwardly revised level . With revised data showing US new home sales spiked in Sept compared to the previously reported decrease, the Commerce Department released a report showing new home sales pulled back in the month of Oct. The Commerce Department said new home sales fell by 0.7% to an annual rate of 733,000 in Oct after surging up by 4.5% to an upwardly revised rate of 738,000 in Sept. The pullback in new home sales in Oct came as  sales in the Northeast plunged by 18.2% to a rate of 27,000. New home sales in the South also tumbled by 3.3% to a rate of 436,000. (RTT)

US: Trump says China deal in ‘final throes’ as top officials speak. President Donald Trump declared Tuesday that talks with China on the first phase of a trade deal were near completion after negotiators from both sides spoke by phone, signaling progress on an accord in the works for nearly two years. “We’re in the final throes of a very important deal,” Trump told reporters at the White House. “It’s going very well.” (Bloomberg)

US: Goods trade deficit narrowed in Oct as imports plunged. The US merchandise-trade deficit unexpectedly narrowed to the lowest in more than a year as imports plummeted, signaling the impact of tariffs on shipments. The gap decreased to USD66.5bn in Oct from USD70.5bn the prior month, Census Bureau data showed. That compared with forecasts of a widening to USD71bn. Exports of goods eased to USD135.3bn, down USD0.9bn from Sept. Imports dropped to a two-year low of USD201.8bn. (Bloomberg)

China: Economy slows for seventh month, early indicators show . The earliest-available indicators of China’s economic performance point to a continued slowdown in Nov. Economic growth was already the slowest in almost three decades in the third quarter, and Bloomberg Economics’ gauge aggregating the earliest data from financial markets and businesses shows that continuing, with a worsening picture for trade, sales manager sentiment, and factory prices. The faster fall in the prices of goods from Chinese factories in Nov also indicates that domestic demand is weak. If those deflationary effects continue it will further hurt corporate profits at home and eventually drag down prices and profits overseas as well. (Bloomberg)

Hong Kong: Trade deficit narrows in Oct . Hong Kong's trade deficit decreased in Oct as the fall in imports exceeded the drop in exports, data from the Census and Statistics Department showed. The trade deficit fell to HKD30.59bn in Oct from HKD44.49bn in the same month last year. Exports declined 9.2% YoY in Oct. Imports dropped 11.5% annually in Oct, bigger than the expected decrease of 10.9%. "Looking ahead, Hong Kong's merchandise export performance will likely stay weak in the near term, as soft global economic growth and uncertainties stemming from US trade policies continue to dampen external demand," a government spokesman said. (RTT)

South Korea: Consumers turn optimistic for first time since April. Confidence among South Korean consumers improved for a third month and signaled optimism for the first time since April, as expectations for easing global trade tensions and an economic recovery buoyed sentiment, according to the Bank of Korea. The data, released ahead of a BOK meeting Friday at which the bank is expected to stand pat, adds to recent signs the slump may be bottoming for an economy that’s been hit hard by a global tech slump and the US-China trade war. (Bloomberg)

Australia: RBA says QE is option at 0.25%, doesn’t expect to need. Australian central bank Chief Philip Lowe laid out his cards for unconventional policy: A government bond-buying program is an option at a 0.25% cash rate, but the threshold for such stimulus hasn’t been reached and is unlikely to be in the near term. “In my view, there is not a smooth continuum running from interest-rate reductions to quantitative easing,” Lowe, who has lowered the benchmark rate three times since June to 0.75%, said Tuesday evening in the text of a speech in Sydney. (Bloomberg)

Markets

Ekovest: Teams up with CREC to pursue new projects. Ekovest has team up with a unit of China Railway Group Ltd (CREC) to bid for projects in Malaysia and around the region. The collaboration is to jointly explore new ventures and projects, including opportunities in the infrastructure, property development and construction sectors. (Starbiz)

Alam Maritim: Bags contracts worth RM19.7m. Alam Maritim Resources has bagged two contracts worth RM19.71m for the provision of one anchor handling tug supply (AHTS) vessel to Conoco Phillips Sarawak Ltd and ROC Oil (Sarawak) SB. The contracts are for a primary duration of 393 days, with an option to extend for another 30 days. (The Edge)

Kim Hin: Gets RM35.8m compensation for properties relocation in China. Kim Hin Industry has agreed to accept the CNY60.18m (RM35.79m) compensation offered for the relocation of its properties in Zhujing Development Area in Shanghai. The acceptance is in accordance with the compulsory requisition of the affected area of Kim Hin Ceramic (Shanghai) Co Ltd’s land by JinShan District for a development project. (The Edge)

Powernet: In talks to expand regionally. Kumpulan Powernet is in active negotiations with various parties to expand its business regionally as the company posted its second straight quarters of profit under a new management led by billionaire Datuk Mohd Abdul Karim Abdullah. By leveraging on the major shareholders’ networking and management vast experience, the Group shall focus in expanding into project management and construction related activities under the energy, utilities, infrastructure and logistics segments. (Starbiz)

Mitrajaya: To see RM32.67m gain from disposal of Melaka property. Mitrajaya Holdings expects to gain RM32.67m from the disposal of 93 pieces of leasehold land in Melaka for RM63m. The plots have been left idle since the group bought them from a trade debtor in 2006. There has been no development potential identified by the group so far. The pieces of land have been sold to PMJ Parkland Avenue SB and Parkland Diversified SB. (The Edge)

UDA: To take four years to complete Kampung Mutiara housing project. UDA Holdings (UDA) will take four years to build a housing project, comprising low-cost, affordable and medium-cost residential units in Kampung Mutiara in Batu Ferringhi near here. The project will be built on a two-hectare site vacated by villagers, will take off this year. The project entails 400 low-cost flat units, 166 affordable apartment units and 502 medium-cost apartment units. (The Edge)

Icon Offshore: Shareholders approve cash call, debt restructuring plans. Icon Offshore has received the nod from its shareholders to move forward with its debt restructuring and cash call proposal, which will greatly help reduce the debt burden that has eaten into the company's earnings. Icon's second largest shareholder, Urusharta Jamaah SB indicated at the group's EGM to support the cash call to raise up to RM250m. (The Edge)

Oil & Gas (Overweight): Petronas’ 3Q profit halves on lower oil and gas prices. Petroliam Nasional said global economic weakness amid rising geopolitical tensions and on-going trade war issues has impacted demand, as the national energy company reported a 52% drop in 3Q pre-tax profit. The company warned the outlook for the industry remained challenging. Pre-tax profit was more than halved to RM9bn compared with RM18.9bn made a year ago. (Starbiz)

Market Update

The FBM KLCI might open with a positive bias today after US stocks advanced to close at new all-time highs Tuesday, as investors focused on US-China trade talks and an upbeat assessment of the economy from Federal Reserve Chairman Jerome Powell. The Dow Jones Industrial Average rose 55.21 points, or 0.2% to 28,121.68, while the S&P 500 index rose 6.88 points, or 0.2% to 3,140.52 The Nasdaq Composite Index gained 15.44 points, or 0.2%, to close at 8,647.93. Volumes were expected to remain subdued ahead of Thursday’s Thanksgiving Day holiday, which will see US markets closed, followed by an abbreviated trading session on Friday. In US economic data, the trade deficit fell 6% to USD66.5 billion, versus expectations of USD70.3 billion, but the US is still likely to post the biggest trade deficit in 2019 in 11 years. Consumer confidence fell in November for the fourth month in a row, with the Conference Board’s index falling from 125.5 from 126.1 in October, below economists’ expectations of a 128.2 reading. New-home sales fell in October to a seasonally adjusted annual rate of 733,000, from 738,000 in September. But the Case-Shiller home-price index for September showed home prices rising nationally at a 3.2% annual pace, up from a 3.1% rise in August. In Europe, stocks closed mixed, with the Stoxx Europe 600 up 0.1%, to 408.49, reaching a new 52-week high.

Back home, the FBM KLCI finished down 7.48 points or 0.47% at 1,583.87, as factors including lower crude palm oil (CPO) prices weighed on local share market sentiment. Across Bursa today, turnover stood at 3.41bn shares, worth RM4.21bn. In the region, stocks closed mostly higher, with the China CSI 300gaining 0.4% and Japan’s Nikkei 225 adding 0.4%. Hong Kong’s Hang Seng Index meanwhile fell 0.3%.

Source: PublicInvest Research - 27 Nov 2019

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