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PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 20 Jan 2021, 11:39 AM

 

PublicInvest Research Headlines - 25 Feb 2020

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Economy

US: Sees no material impact from virus on US-China trade deal – for now. US Treasury Secretary Steven Mnuchin said he does not expect the coronavirus outbreak to have a material impact on the Phase 1 US-China trade deal, although that could change as more data becomes available in coming weeks. China was focused on the virus for now, he said, but Washington still expected Beijing to live up to its commitments to buy more US products and services under the trade deal. (Reuters)

US, India: To sign USD3bn helicopter deal as Trump starts two-day trip. US President Donald Trump offered to sell advanced military equipment to IndiaIndia and the US will sign a USD3bn deal for military helicopters and other equipment, Trump said. "As we continue to build our defence cooperation, USlooks forward to providing India with some of the best and most feared military equipment on the planet. We make the greatest weapons ever made, airplanes, missiles, rockets, ships. We make the best, and we are dealing now with India," he said (Bernama)

EU: Germany business confidence improves slightly. Germany’s business confidence improved marginally in February despite fears about the coronavirus outbreak, survey data from the ifo institute showed. The business climate index rose to 96.1 in February from a revised 96.0 in January. The German economy seems unaffected by developments surrounding the coronavirus, ifo said. The survey results and other indicators suggest economic growth in 1Q will amount to 0.2%, it added. Although companies assessed their current situation as a little worse, they are less pessimistic about the next six months. The current conditions index came in at 98.9 versus 99.2 a month ago. (RTT)

Japan: Kuroda says BoJ will be prepared to act on virus. Bank of Japan Governor Haruhiko Kuroda said the monetary policy authority will be “well-prepared” to act when needed to address the impact of the coronovirus on the economy. “We will monitor the impact of the coronavirus on the economy, inflation and financial markets with maximum attention,” Kuroda said. “We will continue to gather information by attending international meetings like the G-20 and we will be well-prepared to act when we need to act.” (Bloomberg)

South Korea: Consumer confidence plummets on coronavirus fears. South Korea’s consumer confidence plunged the most in five years as coronavirus spreads quickly in the country, blunting the momentum toward economic recovery. The index slid 7.3 points in February to 96.9 according to the Bank of Korea. The fall is the largest since June 2015, when MERS hit the Korean economy. The number of coronavirus cases in South Korea soared, rising to more than 800 cases, making it the most-infected country outside China. (Bloomberg)

Singapore inflation steady in January. Singapore's CPI remained stable in January, data from the Monetary Authority of Singapore and the Ministry of Trade and Industry showed. The consumer price index rose 0.8% YoY in January, same as seen in December. Economists had expected a 0.9% increase. The rise in inflation was driven by an increase in private road transport inflation, and accommodation cost. MAS core inflation, which excludes the costs of accommodation and private road transport, rose to 0.3% in January from 0.6% in the preceding month. (RTT)

Markets

Hextar Global (Outperform, TP: RM0.95): To venture into smart agriculture. Hextar Global is planning to venture into smart agriculture by partnering with foreign entities with expertise in drones and smart unmanned aerial vehicle (UAV). The company said the new business venture will include sales of equipment and providing services as well as consultancy services on the use of 5G technology to the plantation industry in an effort to drive cost efficiencies. “This is synergistic with the company's current business of manufacturing and distribution of pesticide,” it said. (The Edge)

Kimlun Corp: Bags RM92.5m job to build apartments in Johor. Kimlun Corp’s wholly-owned unit has bagged a RM92.49m apartment construction job in Johor. The contract was awarded by Bukit Indah (Johor) SB, and the job involves the building of two blocks of apartments with ancillary facilities. The construction is expected to be completed in the 3QFY22. This project is expected to contribute positively to the earnings and net assets of Kimlun Group for the financial years during the contract period. (The Edge)

United Plantations: Plans 1-for-1 bonus issue . United Plantations proposes a bonus issue on the basis of 1 bonus share for every existing share held. The bonus issue entails an issuance of 208.13m bonus shares. Upon completion of the bonus issue, its enlarged issues share capital will be RM390.05m comprising 416.27m shares. The bonus issue is intended to reward its existing shareholders while the group expects this move to encourage greater participation by investors as well as potentially broadening its shareholder base. (SunBiz)

Grand-Flo: Buys land in Dengkil for RM17m in related party deal. Grand-Flo is acquiring a piece of land in Dengkil, Selangor, which is undertaking a property development, for RM17m, in a related party transaction. Its wholly owned subsidiary Innoceria SB had entered into a land and development purchase agreement with NCT United Development SB for the acquisition. The full GDV of the project is RM144.15m with an estimated gross development profit of RM26.32m. The said development is to be completed in March 2022. It will fund the purchase sum and the remaining construction cost via internally generated funds, banks borrowings and/or proceeds from any future fund raising exercises. (SunBiz)

Nationwide Express: Slips into PN17 status. Nationwide Express Holdings has triggered the PN17 status criteria after its loss widened to RM5.84m in the 3Q ended 31 Dec 2019 from RM928,000 a year ago. Based on the consolidated quarter results as at 31 Dec 2019, the shareholders’ equity of the company is below 50% of its issued share capital. Moving forward, the business outlook remains challenging for the company. The management continues with its effort to secure additional sales and managing costs down to improve profitability. (SunBiz)

Aeon Co: 4Q net profit down 7%, proposes 4 sen dividend . Aeon Co’ net profit fell 6.8% to RM49.88m for the 4QFY19 from RM53.54m a year ago, on higher interest expense and lower share of results of associates during the quarter under review. This resulted in a lower earnings per share of 3.55 sen for 4QFY19 compared with 3.81 sen for 4QFY18. They are proposing a final dividend of 4 sen per share for FY19. However, they stressed that the Covid-19 outbreak has affected the economy in general, including the retail sector and it remains to be seen as to how long the outbreak will persist. (The Edge)

Market Update

The FBM KLCI might open with another sell-off today as the Dow Jones Industrial Average shed 1,031.60 points, or 3.6%, to settle at 27,960.80, after plunging more than 1,079.97 points to a session low of 27,912.44. Monday’s decline turned the blue-chip gauge negative for 2020, leaving it with a 2% year-to-date decline. The S&P 500 slumped 111.86 points, or 3.4%, to close at 3,225.89, and the Nasdaq Composite off by 355.31 points, or 3.7%, to finish at 9,221.28. The S&P 500 is now down 0.2% year-to-date, while the Nasdaq is still up 2.8% in 2020 European stock benchmarks had their worst session in about four years. The Stoxx Europe 600 shed 3.8% to settle at 411.86.

Back home, the FBM KLCI closed down 41.14 points or 2.69% at 1,490.06, after a sea of red washed over Malaysian stocks amid an unusual confluence of factors including the Covid-19 global outbreak, lower crude oil prices and Malaysia’s political uncertainty. South Korea’s Kospi sank 3.9% in Monday trading as the country went on high alert to contain the spread of COVID-19. Australia’s S&P/ASX 200 closed down 2.3%, and stocks fell 1.8% in Hong Kong, though the Shanghai Composite lost just 0.3%. Japanese equity markets were closed Monday for a holiday.

Source: PublicInvest Research - 25 Feb 2020

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