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Author: PublicInvest   |   Latest post: Fri, 17 Jan 2020, 9:48 AM

 

PublicInvest Research Headlines - 29 Nov 2019

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Economy

EU: ECB Review May Reset Inflation Aim to 2% But Struggle to Do More . ECB policy makers expect to tweak their inflation target in an upcoming review of their strategy but will struggle to go much further than that, according to officials with knowledge of the matter. The institution’s first fundamental assessment in 16 years might conclude with a goal of 2%, instead of the current “below, but close to, 2%” which some governors worry risks leaving inflation too weak. (Bloomberg)

EU: Money supply growth steady; business lending rises. Eurozone money supply growth held steady in Oct, while lending to non-financial businesses in the euro area increased, figures from the ECB showed. M3, a measure of broad money, grew 5.6% annually, the same as the Sept rate that was revised. The narrow measure M1 grew 8.4% annually after rising 7.9% in the previous month. (RTT)

EU: German inflation steady at 1.1% in Nov. Germany's inflation rate remained unchanged in Nov at its lowest level since early 2018, after slowing for three months, flash data from the Federal Statistical Office showed on Thursday. CPI rose 1.1% YoY, the same rate as in Oct. Energy prices decreased for a third straight month, down 3.7% annually. (RTT)

UK: House prices rise by most in 7 months. British house prices rose more than expected in Nov, according to figures from mortgage lender Nationwide, suggesting next month's national election was not putting further pressure on the market which remains sluggish. House prices rose by 0.8% YoY, the strongest increase since April, Nationwide said on Thursday. (Reuters)

China: Factory activity seen contracting for seventh month on trade pressure . China’s factory activity is expected to have contracted for the seventh straight month in Nov amid sluggish domestic demand a Reuters poll showed, despite some optimism over chances for an interim deal to de-escalate a trade war with the US. The official PMI for Nov is expected to come in at 49.5, below the 50-point mark that separates expansion from contraction on a monthly basis. (Reuters)

Japan: Retail sales plunge after sales tax hike, typhoon. Japanese retail sales plunged in Oct after a sales tax hike and a super-typhoon kept shoppers at home, a worse-than-expected outcome the government will need to consider as it mulls the size of a spending package to support growth. (Bloomberg)

Markets

FGV: In talks with partners in China to export 700,000 tonnes of sugar. FGV Holdings is currently in talks with partners in China to export of 700,000 tonnes of sugar, given the excess capacity brought about by MSM Holdings Bhd's new refinery in Johor. The new refinery will increase MSM's capacity by 1m tonnes to 2.25m tonnes per annum, exceeding Malaysia's demand level of 1.6m tonnes per year. (The Edge)

OCK: Inks MoU with CITC for business collaboration on telecommunication, technology services. OCK Group has inked a memorandum of understanding (MoU) with China Information Technology Designing & Consulting Institute Co Ltd to explore collaboration in telecommunications and technology services. The MoU outlined the framework of the business collaboration in telecommunication and technology services. (The Edge)

K Powernet: Bags RM254m construction job from Signvest. Kumpulan Powernet has secured a RM254.32m contract from Signvest SB to construct a 12-storey buiding here which also includes the completion of sewerage treatment facilities. The scope of work includes project management, supply of labour, materials, machineries, fixing accessories, structural and civil works. The target completion date was within 36 months. (StarBiz)

7-Eleven: Wants to hold more than 50% stake in Caring Pharmacy. 7-Eleven Malaysia Holdings wants to own the pharmaceutical chain, Caring Pharmacy Group. The convenience store operator has entered into a conditional share sale agreement to buy a 25.35% stake in Caring from the latter's controlling shareholder Motivasi Optima SB for RM143.51m or RM2.60 per share. The pharmaceutical company’s shares were last traded at RM2.50; the share price has gained 47% since the start of the year. (The Edge)

Barakah: Goes for arbitration on RM179.8m claim against PetGas. Barakah Offshore Petroleum has served a notice of arbitration on Petronas Gas (PetGas) to claim RM179.84m, after its notice of demand of a similar amount issued last month was not entertained. The notice contains four claims in relation to the procurement, construction and commissioning of Pengerang Gas Pipeline Project. (The Edge)

Tropicana: Eyes RM3b GDV in 2020 despite weak property conditions. Tropicana Corp says it is on track to achieve its targeted GDV of RM2.5bn in new launches for the FY19. Despite the muted growth experienced by the property market and conscious consumer sentiment, the property developer is already targeting new launches amounting to a GDV of RM3bn in FY20. (The Edge)

Velesto: Sees better FY19, posts RM33.32m net profit in 3Q. Velesto Energy posted a net profit of RM33.32m in the 3QFY19 compared to a net loss of RM13.6m a year ago. Quarterly revenue expanded 38% to RM208.5m in 3QFY19 from a year ago. The group attributed the improved performance to higher utilisation of rigs and average charter rates. (The Edge)

Taliworks: 3Q net profit surges to RM72.6m. Taliworks Corporation posted a stronger set of earnings in the 3Q ended Sept 30,2019 with its net profit surging to RM72.63m from RM19.68m a year ago. Its revenue dipped to RM93.62m from RM98.36m a year ago. Its EPS were 3.6sen compared with 0.98sen. It declared an interim dividend of 1.20sen a share, amounting to RM24.2m to be paid on Feb 25,2020. (StarBiz)

Market Update

The FBM KLCI might open lower today after European stocks fell in holiday-thinned trading on Thursday, with banks, automobile makers and software companies bearing the brunt of losses after fresh signs of tensions between the US and China. The Stoxx Europe 600 slipped 0.1% to 408.82, after logging a new 52-week high on Wednesday, with a gain of 0.3%. The German DAX fell 0.3% to 13243.96 while the French CAC 40 index lost 0.2% to 5907.25. The UK FTSE 100 dropped 0.2% to 7392.39, as the Pound rose after a YouGov poll for the Times showed Prime Minister Boris Johnson’s Conservative Party will win the December 12 election with a comfortable majority. US stocks are shut on Thursday for the Thanksgiving Day holiday, and Friday will see a shortened day of trade.

Back home, the FBM KLCI index lost 3.41 points or 0.21% to 1,583.77 points on Thursday. Trading volume decreased to 2.13bn worth RM1.44bn. Market breadth was negative with 305 gainers as compared to 501 losers. The regional markets finished lower with shares in China leading the region. The Shanghai Composite was down 0.47% while Hong Kong's Hang Seng was off 0.22% and Japan's Nikkei 225 was lower by 0.12%.

Source: PublicInvest Research - 29 Nov 2019

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