PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 25 Feb 2020, 9:35 AM


PublicInvest Research Headlines - 21 Jan 2020

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Global: IMF lowers global growth forecast as India loses steam. The IMF on Monday cut the global growth forecasts for this year and next, mainly due to the weaker-than-expected expansion in India. Global growth for this year is projected at 3.3%, which is 0.1% point less than the forecast made in Oct, the international lender said in the latest update to its World Economic Outlook report. The growth rate is projected to rise to 3.4% next year, which is 0.2% points less than the Oct forecast. (RTT)

US, France: Macron, Trump reach tariff truce in 2020 over digital tax fight . Presidents Emmanuel Macron and Donald Trump agreed to a truce in their dispute over digital taxes that will mean neither France nor the US will impose punitive tariffs this year, a French diplomat said. The respite defuses for now transatlantic tensions that had been building between Washington and Brussels along another potential trade war front. (Bloomberg)

UK: Pressures On British Household Finances Ease: IHS Markit . Pressures on the UK household finances eased in Jan, a consumer survey from IHS Markit showed. The household finance index rose to 44.6 in Jan from 43.2 in Dec. This was the highest score in 12 months. However, the indicator for future financial wellbeing expectations dipped back into negative territory. Further, the survey showed that both workplace activity and incomes from employment continued to increase in Jan. (RTT)

China: Keeps loan prime rates unchanged . China kept its benchmark lending rates unchanged for the second straight month. The one-year loan prime rate was retained at 4.15% and the five-year loan prime rate at 4.80%. The rate was last reduced in Nov, which was the first cut since the new lending rate was introduced. The loan prime rate is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. This new lending rate replaced the central bank's traditional benchmark lending rate in August 2019. (RTT)

China: Forecasts vehicle sales at flat or falling in 2020 . China expects the country’s vehicle sales to remain at around 25m units in 2020, and could be flat or decline, Industry Minister Miao Wei said. Miao made the comments in a news conference in Beijing. He also said that the ministry is studying postponing the reduction of subsidies for new energy vehicles (NEV). (Reuters)

Hong Kong: Jobless rate rises in Dec . Hong Kong's jobless rate rose marginally during the Oct to Dec period, data from the Census and Statistics Department showed on Monday. The jobless rate rose to 3.3% during the Oct to Dec period from 3.2% during the Sept to Nov period. This was in line with economists' expectation. However, the number of unemployed persons decreased to 124,000 during the three months ended in Dec from 125,400 in the previous three months.


AirAsia (Neutral, TP: RM1.87), AAX (Underperform, TP: RM0.14), MAHB: Mavcom slaps RM2m fine on AirAsia, AirAsia X and MAHB. AirAsia and AirAsia X have been slapped with fines of RM2m each by the Malaysian Aviation Commission (Mavcom). Mavcom also fined Malaysia Airports Holdings (MAHB) RM856,875 for failing to meet targets set by the former in its Airports Quality of Service framework. The penalties against AirAsia and AirAsia X were due to processing fee impediments from Aug 10 to Sept 11 last year. (NST)

Vizione: Bags RM170m construction project. Vizione Holdings has bagged a RM170m construction project in Kota Kinabalu. The design and build contract awarded by Laju Damai SB involves one block of 29-storey service suites totaling 664 units, as well as two blocks of three-storey shop offices comprising 38 units, along with carpark block, mechanical and electrical and external works. The project will commence on March 1, 2020 with completion date on May 31, 2023. The current outstanding order book is at RM2.7bn. (The Edge)

Kerjaya Prospek: Bags RM332m contract from E&O JV. Kerjaya Prospek has secured a RM332m contract for a development project in Jalan Kia Peng, Kuala Lumpur. The contract was awarded by Patsawan Properties SB, an indirect joint venture company of Eastern & Oriental with Mitsui Fudosan Asia Pte Ltd. The contract entails the main building works for a 54-storey building comprising 491 units of serviced apartments across 44 storeys and a 10-storey car park with common facilities. (SunBiz)

Perdana Petroleum: Bags RM9m charter contract from Petronas Carigali. Perdana Petroleum has bagged a contract from Petronas Carigali SB for the provision of one anchor handling tug and supply (AHTS) vessels for RM9m. This was the second contract it has bagged from Petronas Carigali in less than two months. The 192-day contract that has started on Dec 24, 2019, is expected to contribute positively to its earnings and net assets for the FY20. (The Edge)

Dufu Tech: Proposes one-for-one bonus issue. Dufu Technology Corp is proposing to undertake a bonus issue, on the basis of one bonus share for every one Dufu share held, at an entitlement date to be fixed. The exercise is expected to involve the issuance of up to 267.62m new shares. The proposed issuance is intended to reward the group's existing shareholders for their loyalty and continuing support for the group. Additionally, the bonus issue will enable Dufu's shareholders to have greater participation in its equity. (The Edge)

Chin Teck: Reports 15.6% fall in 1Q net profit. Chin Teck Plantations net profit fell 15.64% to RM7.81m for its 1QFY20, from RM9.26m a year ago. The earnings were hit by reduced sales and a decline in the selling price of palm kernel and lower sales of fresh fruit bunches. Other reasons include the lesser amount of gain on foreign currency translation, higher operating expenses arising from an increase in sales volume of crude palm oil, as an increase in fertiliser expenses. (The Edge)

Telco (Neutral): Bids for 700MHz, 3.5GHz spectrum bands open in April - MCMC. Bids for the 700MHz and 3.5GHz spectrum bands for the roll-out of 5G will open in April, says the Malaysian Communications and Multimedia Commission (MCMC). The companies may send bids for the 26 GHz and 28 GHz millimetre wave bands in April. The MCMC will allocate the 700MHz and 3.5Ghz spectrum bands to a consortium comprising multiple licensees, but not to individual licensees. (Bernama)

Market Update

The FBM KLCI might open flat today after European stocks slipped on Monday, as investors looked set to take a breather on the heels of a record session, and as US markets will be closed for a holiday. The Stoxx Europe 600 slipped 0.2% to 423.53. The index logged a fresh record close on Friday, closing up around 1% to 424.56. For the week, it gained nearly 1.3%, the biggest weekly gain since the week ended Dec. 20. The German DAX 30 index, which had its second-biggest close in history on Friday, was down 0.2% to 13504.89, while the French CAC 40 index fell 0.4% and the FTSE 100 slipped 0.2%. US stocks were shut on Monday in observance of the Martin Luther King Jr. Day holiday.

Back home, the FBM KLCI closed 6.93 points or 0.43% lower to 1,588.88 on profit-taking, while Bursa Malaysia technology stocks rose among top gainers, on expectation these companies will report earnings growth. The regional markets finished mixed with the Shanghai Composite gained 0.66% and the Nikkei 225 rose 0.18%. The Hang Seng lost 0.90%.

Source: PublicInvest Research - 21 Jan 2020

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