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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 27 Nov 2020, 11:04 AM

 

PublicInvest Research Headlines - 3 Jan 2020

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Economy

US: Jobless claims edge lower but trend points to uptick in filings. The number of Americans filing claims for jobless benefits edged lower last week, a positive signal for the US labour market, amid recent signs that new claims may be trending slightly higher. Initial claims for state unemployment benefits decreased 2,000 to a seasonally-adjusted 222,000 for the week ended Dec 28, the Labor Department said. Economists had expected 225,000 new claims last week. While claims have been volatile in recent weeks around the US holiday season and end of the year, longer-term averages suggest the strength in claims data may have ebbed slightly in recent months. (Reuters)

EU: Manufacturing downuturn deepens in December. The euro area manufacturing sector continued to contract in December with weakness spread across most of the member countries, data from IHS Markit showed. The manufacturing PMI fell to 46.3 in December from 46.9 in November. In 4Q, the PMI averaged 46.4, unchanged on the previous quarter's near seven-year low. The survey is indicative of production falling by 1.5% in 4Q, acting as a severe drag on the wider economy, IHS Markit said. "The ability of the wider economy to avoid sliding into a downturn in the face of such a steep manufacturing contraction remains a key challenge for the eurozone as we head into 2020," it added. (RTT)

EU: German employment at record high in 2019. Germany's employment reached a record high in 2019 driven by higher labor force participation and the immigration of foreign workers, official data showed. The number of persons in employment increased 0.9% in 2019, which was a smaller rise compared to the 1.4% increase seen in 2018, Destatis reported. The employment increase observed for 14 years continued albeit with less momentum. Nonetheless, the number of employed persons rose to 45.25m in 2019, the highest since the German reunification in 1991. The service sector recorded the highest YoY increase with employment rising 19,000, or 1%. In industry, excluding construction, employment grew by 59,000. (RTT)

EU: Germany manufacturing sector contracts further. Germany's manufacturing sector ended the year 2019 deep in contraction, reflecting marked decreases in output and employment, survey data from IHS Markit showed. The headline IHS Markit/BME manufacturing PMI fell to 43.7 in December from 44.1 in November. New business at German manufacturers decreased for the fifteenth month in a row. December's decrease in new orders was the slowest in the whole of 2019 and manufacturers' output expectations showed a further improvement. (RTT)

UK: Manufacturing sector shrinks on weak output, orders. The downturn in the UK manufacturing sector deepened in December as production decreased the most since July 2012 in response to falling orders from both domestic and foreign markets. The IHS Markit/Chartered Institute of Procurement & Supply factory PMI fell to 47.5 in December, final data showed. According to the IHS Markit survey, output contracted at the fastest pace since July 2012 due to the weakness in intermediate and investment goods production. (RTT)

China: Cuts reserve requirement ratio to spur liquidity. China's central bank reduced the amount of cash that banks should set aside as reserves to spur liquidity ahead of the Spring Festival. The PBoC lowered the reserve requirement ratio, or RRR, by 50 bps. The RRR cut will release CNY800bn liquidity into the financial system. The bank had reduced RRR three times last year. The ratio for big banks was reduced to 12.5% and that for smaller banks to 10.5%. The PBoC said the reduction will increase the source of funds available for financial institutions and cut the cost of funding, which will help alleviate the stress on small and micro enterprises, the bank noted. (RTT)

India: Manufacturing sector growth improves in December. India's manufacturing sector expanded at a faster pace in December amid a rise in new orders, survey results from IHS Markit showed. The headline IHS Markit manufacturing PMI, increased to 52.7 in December from 51.2 in November. Among the five sub-components, four were increased in December and suppliers' delivery times remained unchanged from the preceding survey period. At the sub-sector level, consumer goods and intermediate goods grew in December. Meanwhile, capital goods remained in contraction. New work increased solidly in December with the pace of expansion rising at the fastest pace since July. New export orders grew for the twenty-sixth straight month, though moderately. (RTT)

Markets

Kerjaya Prospek: Chairman to inject two Rawang plots into group for RM10m. Kerjaya Prospek Group is buying two plots of adjoining land, measuring 4.31 hectares (ha) in Rawang, from executive chairman and major shareholder Datuk Tee Eng Ho and his brother, ED Tee Eng Seng, for RM10.01m. The land was valued to be worth RM10m by an independent valuer. The group had been renting the plot for RM15,000 a month for two years, from a company owned by the Tee brothers, before being extended to a monthly rental charge of RM16,500.(The Edge)

Metronic Global: Lee Kim Yew sues Metronic Global for RM10.45m. Metronic Global has been served with a suit by its single largest shareholder Tan Sri Lee Kim Yew. The suit was served via a counterclaim by Lee, who is seeking a declaration that the affairs of the group are done in a manner oppressive to him. Lee is also seeking a similar declaration pertaining to the powers of directors, that are being exercised. Lee is also petitioning for the allotment and the issuance of ESOS in June 2019, and a private placement in Oct to be declared void. (The Edge)

Puncak Niaga: Files judicial review over RM5.27m demand from Customs. Puncak Niaga is filing a judicial review application against the Royal Malaysian Customs Department’s demand for GST payments, amounting to RM5.27m. (The Edge)

DBE Gurney: Ding Seng Huat resigns as DBE Gurney managing director. DBE Gurney Resources’s MD Datuk Ding Seng Huat has resigned, so he can focus on the poultry business. Meanwhile, ED Datuk Doh Jee Ming has been redesignated on Wednesday (Jan 1) as DBE Gurney’s MD. (The Edge)

Rohas Tecnic: Wan Azmi resigns as Rohas Tecnic chairman. Rohas Tecnic’s largest shareholder and chairman Tan Sri Wan Azmi Wan Hamzah has resigned on account of personal reasons. His son Wan Afzal-Aris Wan Azmi also ceased to be an alternate director, following his father’s resignation that took effect on Wednesday (Jan 1). Deputy chairman Sia Bun Chun has been made the group’s new non-independent and non-executive chairman. Wan Azmi is still Rohas Technic’s largest shareholder, controlling a 42.96% stake, of which 13.94% is held directly by the tycoon. (The Edge)

Boustead: Associate delivers first mission vessel to royal navy. Boustead Heavy Industries Corporation Bhd’s (BHIC) associate company Boustead Naval Shipyard SB (BNS) has delivered to the Royal Malaysian Navy (RMN), the first of four littoral mission ships (LMS) it was commissioned to build. Defence Ministry undersecretary (Procurement Division) Datuk Ahmad Hussaini Abdul Rahman received LMS1, ‘KERIS’, witnessed by RMN Eastern Fleet commander Datuk Syed Zahrul Putra Syed Abdullah and BHIC chief executive officer Ir Ee Teck Chee. (The Edge)

IPO: Powerwell to raise RM21.8m from ACE listing. Powerwell Holdings plans to raise RM21.8m from its proposed listing on the ACE Market by issuing 87.4m new shares at 25 sen. The company's core businesses are designing and manufacturing and trading of electricity distribution products including low voltage switchboards, medium voltage switchgear and related products. The company will allocate RM10.27m for capital expenditure including purchase of machinery and equipment and the enhancement of its enterprise resource planning systems and hardware. (Starbiz)

Market Update

US markets have started off 2020 strongly, with technology-based stocks leading the way. Sentiment was also lifted by news of China cutting banks’ reserve requirements, injecting about 800bn Yuan (USD115bn) in liquidity into its economy. On the data front, weekly jobless claims came in at 222,000, slightly below expectations of 225,000. The Dow Jones Industrial Average and S&P 500 rose 1.2% and 0.8% while the Nasdaq Composite jumped 1.3% higher on the day, the latter led by shares of Apple which surged to a new high. European markets also ended the day higher on fresh optimism surrounding US-China relations. Less-than-encouraging Eurozone manufacturing PMI numbers which showed factory activity contracting for an 11th consecutive month did little to deter the buoyant mood. Germany’s DAX and France’s CAC 40 rose 1.0% and 1.1% while UK’s FTSE 100 gained 0.8%. Asian markets were also mostly higher on the first trading day of the year, with gainers led by China on account of the country’s liquidity move and a private survey showing manufacturing activity on the rise in December. The Shanghai Composite and Hang Seng indices rose 1.2% and 1.3% on the day. Japan’s Nikkei remains closed however, missing out on the extended global rally.

The FBM KLCI recovered some of Tuesday’s lost ground with a 0.9% gain. Gamuda’s 70:30 joint venture with Dong-Pi Construction Co Ltd has bagged a 5-year RM932.5m contract for a seawall and dike project in Taiwan. Metronic Global has been served with a suit by its single largest shareholder Tan Sri Lee Kim Yew who is seeking, amongst others, a declaration that the affairs of the group are done in a manner oppressive to him.

Source: PublicInvest Research - 3 Jan 2020

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