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Author: PublicInvest   |   Latest post: Mon, 25 Jan 2021, 1:29 PM

 

PublicInvest Research Headlines - 6 Dec 2019

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Economy

US: Trade deficit drops in Oct to lowest level in more than a year. The US trade deficit fell in Oct to its lowest level in more than a year as exports and imports both slid for the month, the Commerce Department said Thursday. The deficit tumbled 7.6% to USD47.2bn from a revised print of USD51.1bn for Sept. Economists polled by Dow Jones expected the US trade deficit to narrow to USD48.5bn in Oct. Imports dropped by 1.7%, or USD4.3bn, to USD254.3bn. That decline was driven by fewer  imports on products including cellphones, toys and games, and passenger cars. That decline could signal a weakening US consumer as the trade war with China rages on. (CNBC)

US: Jobless claims unexpectedly drop to seven-month low. A day ahead of the release of the more closely watched monthly jobs report, the Labor Department released a report on Thursday showing an unexpected decrease in first-time claims for US unemployment benefits in the week ended Nov 30th. The report said initial jobless claims slipped to 203,000, a decrease of 10,000 from the previous week's unrevised level of 213,000. The drop came as a surprise to economists, who had expected jobless claims to inch up to 215,000. With the unexpected decrease, jobless claims fell to their lowest level since hitting 193,000 in the week ended April 13th. (RTT)

US: Factory orders rebound in Oct, shipments unchanged. New orders for US-made goods rebounded in Oct after two straight monthly declines, lifted by rising demand for machinery and transportation equipment, but gains were likely to be limited amid persistently weak business confidence. Factory goods orders increased 0.3% also as bookings for computers and electronic products rose, the Commerce Department said on Thursday. Data for Sept was revised down to show orders dropping 0.8% instead of falling 0.6% was previously reported. Oct’s gain in factory orders was in line with economists’ expectations. Factory orders decreased 0.4% compared to Oct 2018. (Reuters)

US: Health spending recovers after two slow years – CMS. US healthcare spending recovered in 2018 after two consecutive years of decline, a government health agency reported on Thursday. The total national health expenditures last year grew 4.6% to USD3.6trn, or USD11,172 per person, boosted by faster growth in private health insurance and government-sponsored health insurance programs, the US Centers for Medicare and Medicaid Services (CMS) said. The federal government and households were the largest sponsors, each contributing 28% to the total spending in the year. The cost of health as a share of the economy decreased 0.2 points to 17.7% in 2018. (Reuters)

EU: German factory orders fall on domestic demand. Germany's manufacturing new orders declined unexpectedly in Oct on weak domestic demand, provisional data from the Federal Statistical Office showed on Thursday. Factory orders fell a seasonally and calendar adjusted 0.4% MoM following a 1.5% increase in Sept, which was revised from the initially reported 1.3% gain. Economists had expected a 0.4% gain. Domestic orders dropped 3.2%, while foreign demand grew 1.5%. Orders from the euro area surged 11.1%, while those from other countries fell 4.1%. Intermediate goods manufacturers logged a 0.7% increase in orders, while producers of capital goods reported a 1.1% decline. (RTT)

India: Keeps policy rates unchanged despite slower growth. Despite the economic slowdown, India's central bank maintained its interest rates on Thursday, defying expectations for further reduction, as policymakers wait to see how previous monetary easing as well as stimulus measures taken by the government feed into the real economy. The Monetary Policy Committee of the Reserve Bank of India, headed by Governor Shaktikanta Das, unanimously decided to leave the repo rate unchanged at 5.15% and the reverse repo at 4.90%. The bank was widely expected to ease the policy rates by a quarter point at its fifth bi-monthly monetary policy meeting. The central bank has so far lowered its key rate five times this year by a cumulative 135 basis points. (RTT)

Markets

TH Plantations: To dispose of two Sarawak units for RM170m. TH Plantations is disposing of its 100% equity interests in Bumi Suria Ventures SB and Maju Warison SB to Tamaco Plantation SB for RM170m. Together, the two units own 6,513.9 hectares of oil palm plantation in Bintulu and Sibu in Sarawak. According to TH Plantations, the disposal was owing to the poor performance of the companies against their projected production of fresh fruit bunches. (Starbiz)

Time dotCom: Collaborating with Facebook for investments in internet infrastructure. TIME dotCom is collaborating with Facebook to invest in internet infrastructure in Malaysia, which will further open up the nation to more connections and international hubs. Time dotCom said the network infrastructure project is expected to be completed by the end of the second quarter of next year, which will be exclusively for Facebook and its family of applications. (The Edge)

Paragon Globe: Buys 31-acre land in Pulai for commercial development . Paragon Globe is acquiring 31.1 acres of freehold land in Pulai, Johor, which it plans to develop into a wellconceptualized commercial area. The group is buying the land for RM60.96m from Iskandar Capital SB. (The Edge)

RHB: RHB Hong Kong to commence winding up operations . RHB Hong Kong Ltd and its subsidiaries have undertaken to commence ceasing operations due to an increasingly challenging operating broking environment in the island state. RHB Bank said losses were recorded in the Hong Kong group and it was no longer viable to continue its business operations. Following the proposed cessation, RHB Hong Kong will gradually discontinue offering financial services to its existing and potential clients. (Starbiz)

LFE Corp: Wins RM34.5m contracts to provide electrical services . LFE Corp has secured four contracts with a combined value of RM34.5m to provide electrical, fire protection, and hydraulic services for a service apartment project in Damansara, Selangor. LFE said the contract tenure spans 26 months from Sept 23, 2019 to Nov 22, 2021. (The Edge)

Nexgram: Auditor raises concern over its ability to continue as going concern. Nexgram Holdings’s external auditor Styl Associates PLT has expressed an unqualified opinion on the group’s accounts, and raised concerns over its ability to continue as a going concern. Nexgram said Styl Associates has noted that the group had incurred a net loss of RM20.89m for FY19, and had at that point of time not complied with the repayment terms of its bank borrowings. This, along with other matters, indicate a material uncertainty exists that may cast significant doubt on the group’s ability to continue as a going concern, the auditor said. (The Edge)

Khee San: Court orders Khee San to pay RM16.76m and interest to Bank of China. The High Court has ordered Khee San to pay the Bank of China (Malaysia) RM16.76m, together with interest, in the suit that the bank filed against the candy maker to demand repayment of a defaulted loan. This was among the terms contained in a consent judgment delivered by the court, and agreed to by the parties, after they appeared for the hearing of BoC's summary judgment application and Khee San's stay of proceeding application. (The Edge)

Market Update

The FBM KLCI might end the week with positive note after U.S. stocks recovered from a morning slide and moved higher to close in the black on Thursday as investors remained optimistic about prospects for a US-China trade deal despite a looming deadline for the imposition of fresh import tariffs by President Donald Trump. The Dow Jones Industrial Average closed up 28.01 points, 0.1%, at 27,677.79 after trading in the red most of the day. The S&P 500 was up 4.67 points, or 0.15%, at 3,117.43 and the Nasdaq 100 closed 4.03 points higher, or 0.05%, at 8,570.70. In US economic data, the nation’s trade deficit dropped almost 8% in October to a 16-month low, largely because of lower imports from China, but the US is on track to record the biggest annual trade deficit in 11 years despite President Trump’s trade war with China. The number of Americans who applied for unemployment benefits at the end of November fell to the lowest level in seven months and returned close to a 50-year low, but the sharp decline in jobless claims likely stems in part from the Thanksgiving holiday. US factory orders rose 0.3% in October, the Commerce Department said Thursday, for the first gain in three months. European stocks closed lower, with the Stoxx Europe gave away 0.1%.

Back home, the FBM KLCI closed 2.65 points or 0.17% higher to 1,563.58 points while Bursa Malaysia's palm oil plantation index rose by a significantly larger quantum after crude palm oil (CPO) prices rose past RM2,800 a tonne. Across Bursa today, 2.39bn shares worth RM1.71bn were traded. Gainers led losers by 529 to 305 respectively. In the region, the Hang Seng advanced 0.6%, the China CSI 300 rose 0.8%, while the Shanghai Composite Index closed 0.7% higher.

Source: PublicInvest Research - 6 Dec 2019

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