PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 20 Oct 2020, 10:04 AM


PublicInvest Research Headlines - 30 Dec 2019

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EU: ECB's Holzmann says interest rates unlikely to turn positive in 2020. The European Central Bank is unlikely spring any major surprise next year by raising interest rates into positive territory, policymaker Robert Holzmann said. "I do not expect a turnaround in 2020 to a positive interest rate environment," Holzmann, who heads Austria's central bank, said in a statement. "In terms of content, however, we will certainly continue to deal with the topic of green finance next year." Eurozone interest rates were raised last in July 2011, by 25bp. The previous change was a 10bp cut in the deposit rate in Sept. The main refi rate is now at a record low 0%, the deposit rate at -0.50% and the marginal lending rate is at 0.25%. Referring to Boris Johnson's victory in the UK election, Holzmann said the New Year is likely to see Britain leave the European Union. (RTT)

UK: Eyes March budget and spending boost in north of England. Prime Minister Boris Johnson’s freshly re-elected government is seeking to hold its first Budget in March, rewriting spending rules as it does so, according to a person familiar with the matter. Chancellor of the Exchequer Sajid Javid was forced to scrap his planned Autumn Budget because of this month’s snap election. A rescheduled event wasn’t expected until after the UK left the European Union on Jan 31, with some speculation it would happen as early as Feb. Since winning the election, Johnson promised to heal divisions in a country that’s been split by Brexit, in particular by showing support for people in districts in the North of England who voted for his Conservative Party for the first time. (Bloomberg)

China: Industrial profits recover in Nov. China's industrial profits expanded after declining in previous three months, data from the National Bureau of Statistics showed. Industrial profits expanded 5.4%  year-on-year in Nov, in contrast to a 9.9% decrease in Oct. The recovery in industrial profits was driven by significant growth in industrial production and sales. Moreover, the factory gate prices of industrial products declined. Nonetheless, Zhu noted that volatility in industrial profits remain due to multiple factors such as market demand and industrial product prices. Data showed that in Jan to Nov period, industrial profits decreased 2.1% from the same period last year. (RTT)

China: Economy picked up in Dec, early indicators show. China’s economic performance improved in Dec for the first time in eight months, according to a group of earliest-available indicators compiled by Bloomberg. Production in the world’s second-largest economy accelerated as domestic demand stabilized, and market sentiment turned around on the prospect of a near-term trade deal with the US. The latest sign is that Chinese economy is at or close to a cyclical bottom after activity improved in Nov on a global demand rebound. While accepting that output is on a longer-term slowing trend, policy makers have sought to prevent a sharp deceleration into 2020 through a wide-range of measures to support consumption, labor mobility and the private sector. (Bloomberg)

Japan: BoJ summary of opinion - downside risks remain high. Bank of Japan policymakers said downside risks remained high and the bank should be prepared for a possible economic downturn. According to the summary of opinions at the monetary policy meeting, the risk profile associated with overseas economies has been changing to a situation where both downside and upside risks are starting to coexist but downside risks remain high. As the risks are skewed to the downside, the bank needs to examine whether additional easing is necessary and prepare for a possible economic downturn. The bank should not only conduct monetary policy but also enhance cooperation with the government in terms of fiscal and growth policies. (RTT)

Japan: Industrial production sinks 0.9% in Nov. Industrial production in Japan was down a seasonally adjusted 0.9% on month in Nov, the Ministry of Economy, Trade and Industry said in preliminary reading. That exceeded expectations for a decline of 1.1% following the 4.5% drop in Oct. On a yearly basis, industrial production tumbled 8.1% - again beating low expectations for a decline of 8.3% following the 7.7% contraction in the previous month. Upon the release of the data, the METI downgraded its assessment of industrial production, saying that it has weakened. (RTT)

Japan: Retail sales rise 4.5% in Nov. Retail sales in Japan were up a seasonally adjusted 4.5% on month in Nov, the Ministry of Economy, Trade and Industry said. That was shy of expectations for an increase of 5.0% following the 14.2% plunge in Oct. On a yearly basis, retail sales sank 2.1% again missing forecasts for a drop of 1.7% following the 7.0% slide in the previous month. Sales from large retailers fell an annual 1.8%, beating expectations for a drop of 1.9% following the 8.2% drop a month earlier. (RTT)

Singapore: Producer price decline slows in Nov. Singapore's producer prices fell at a slower rate in Nov, data from the Department of Statistics showed. The manufactured producer price index fell 3.5% year-on-year in Nov, following a 5.0% decline in Oct. The oil and non-oil indices fell 13.1% and 1.9% respectively. Within the latter, prices of crude materials dropped the most, by 8.1%. On a monthly basis, producer prices fell 1.0% in Nov, following a 1.1% decrease in the preceding month. Another report from the statistical office showed that the import prices declined 4.9% in Nov, following a 6.8% decrease in the previous month. On a month-on-month basis, import prices fell 0.8% in Nov, following a 0.7% decrease in the prior month. (RTT)


Pestech: Gets RM111.76m substation job in the Philippines. Pestech has received a contract worth of RM111.76m from the National Grid Corporation of the Philippines (NGCP) to upgrade substations. Pestech has received a notice of award from NGCP in relation South Luzon Substations Upgrading Project Stage 1 (San Juan and Lumban Substations) and Stage 2 (Daraga Substation). It said the offshore portion of the contract was worth USD16.64m (RM68.74m) while the onshore portion was worth PHP528.8m (RM43.02m). (The Edge)

Gas Malaysia: Gets shipping, distribution licences from Energy Commission. Gas Malaysia has received the nod from the Energy Commission to provide services pursuant to the implementation of third-party access (TPA) of Malaysia’s regasification and gas distribution facilities, beginning next year. The commision has granted a 10-year distribution licence and a 20-year shipping licence to Gas Malaysia. The distribution licence permits Gas Malaysia to carry out the activity of operating and maintaining the distribution pipeline to deliver gas while the shipping license allows Gas Malaysia to carry out the activity of a shipping licensee. (The Edge)

7-Eleven: To take up 46% stake in Dego Ride operator. 7-Eleven Malaysia is injecting RM7.51m into Myinteractive SB (MSB), which is in the process of securing a licence and approval to run electronic motorcycle taxi services in Malaysia. 7-Eleven will then own 46.45% stake in MSB. MSB’s principal activities are the provision of delivery services, web development, design and consultation services and is the operator and owner of three mobile applications, namely Dego App, Dego Partners and Dego Orders. (The Edge)

Atrium REIT: Buying property in Shah Alam from PNB. Atrium REIT is acquiring 2.83 hectares of industrial land in Shah Alam, which includes a factory and an office building, from PNB for RM45m. The acquisition will also strengthen Atrium REIT’s position as a sizeable REIT, as the net lettable area of Atrium REIT will increase by 167,431 sqft to 1.46m sqft upon completion of the acquisition. (Bernama)

ARB: Sets up JV to develop and implement ERP system. ARB has set up a JV with Orange Social Media SB (OSM) to develop and implement an enterprise resource planning (ERP) system platform. ARB said the 51% owned JV would allow ARB to leverage on its existing technical expertise and further develop its capabilities. “It also allows the company to tap into the network of OSM to market the solution to potential customers,” ARB said. (The Edge)

Kim Loong: 3Q net profit falls18% amid lower plantation, milling contribution. Kim Loong Resources reported an 18% YoY decline in net profit to RM13.79m for 3QFY19. It said its plantation and palm oil milling segments reported lower performance for the quarter. The plantation segment was affected by lower production and ASP during the quarter, while the palm oil milling segment was affected by the drop in CPO price, as well as the quantity sold, it said. The performance was also affected by the fire incident at our mill at Kota Tinggi, Johor, in June, causing disruption to operations for about one month. (The Edge)

Market Update

The FBM KLCI might open higher today as US stocks largely closed out the week steady near record levels last Friday, after the main indices scored new intraday highs early in the day, but the Dow Jones Industrial Average managed to rise for three straight weeks and the benchmark S&P 500 index rose for a fifth consecutive week. The Dow Jones Industrial Average gained 23.87 points, or 0.08%, to 28,645 and is up 22.80% year-to-date. The S&P 500 index gained 0.11 points, a gain of 0.003% or just enough to technically register a new record close at 3,240.02. Year-to-date the S&P 500 is up 29.25%. The Nasdaq Composite index fell 15.77 points, or 0.17%, to 9,006.62. Meanwhile, the pan European benchmark, the Stoxx Europe 600 Index closed 0.2% higher Friday, after being closed the past two sessions for the holidays. 

Back home, the FBM KLCI closed 7.06 points or 0.44% higher at 1,610.61, after a surge in the final trading hour, partly helped by share price gains in plantation firms and as fund managers' window-dressing activities continued. In the region, stocks were mixed. The China CSI closed off 0.1%, Japan’s Nikkei fell 0.4%, and Hong Kong’s Hang Seng rallied 1.3%.

Source: PublicInvest Research - 30 Dec 2019

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