PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 15 Jan 2021, 10:38 AM


PublicInvest Research Headlines - 26 Feb 2020

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US: Consumer confidence improves slightly in February. Data released by the Conference Board showed consumer confidence in the US improved slightly in February. The Conference Board said its consumer confidence index inched up to 130.7 in February from a downwardly revised 130.4 in January. Economists had expected the index to tick up to 132.5 from the 131.6 originally reported for the previous month. The modest increase by the headline index came as the expectations index surged up to 107.8 in February from 101.4 in January. On the other hand, the present situation index tumbled to 165.1 in February from 173.9 in the previous month. "Despite the decline in the Present Situation Index, consumers continue to view current conditions quite favorably," said the Conference Board. (RTT)

US: Business borrowing for equipment jumps 28% in January – ELFA. US companies’ borrowings for capital investments surged about 28% in January from a year earlier, as a strong US economy drove up business spending, the Equipment Leasing and Finance Association (ELFA) said. The companies signed up for USD9.2bn in new loans, leases and lines of credit last month, up from USD7.2bn a year earlier. But borrowings fell about 29% from the previous month. “Underlying fundamentals in the US economy — strong job growth, low inflation, low interest rates, continuation of a bull equities market and solid business confidence — all add up to a growing demand for productive equipment necessary to keep businesses expanding and profitable,” ELFA said. ELFA said credit approvals totalled 76.3% in January, down from 77.1% in Decmeber. (Reuters)

EU: Germany economy stalls as estimated in 4Q. The German economy stagnated in 4Q, in line with the initial estimate, as the positive contribution to growth from investment was nullified by foreign trade, detailed data from Destatis revealed. GDP remained flat sequentially after expanding 0.2% in 3Q. Consequently, price-adjusted GDP grew 0.6% in 2019. On a non-adjusted basis, GDP rose 0.3% YoY after a 1.1% expansion in 3Q. There were mixed signals regarding domestic demand at the end of the year. Household consumption remained unchanged and general government expenditure rose only 0.3% QoQ. While gross fixed capital formation in construction climbed 0.6% largely due to the mild weather, capital formation in machinery and equipment decreased notably by 2.0%. At the same time, capital formation in other fixed assets was up 1.1%.(RTT)

Hong Kong: Exports plunged even before virus showed full impact. January was supposed to be the month that sagging exports from Hong Kong’s huge port started to bottom. Instead, they slumped. Total outbound shipments plunged 23% YoY, far worse than the 3.7% drop that economists expected, figures released showed. Exports from the facility saw big drops to key markets: down 21% to the rest of Asia, 33% to the US and 37% to the U.K. While the data were probably affected by the annual Lunar New Year holidays, they also show that whatever dividend was likely from the US and China trade deal has already evaporated. The focus now is on how much worse the pain could get as the city braces for fallout from the coronavirus. (StarBiz)

Japan: Producer prices climb 2.3% YoY in January. Producer prices in Japan were up 2.3% YoY in January, the BoJ said. That exceeded expectations for a gain of 2.1%, which would have been unchanged from the previous three months. On a monthly basis, producer prices sank 0.3% following the flat reading in December. Individually, prices were up for transportation, communications, real estate, finance and advertising. Producer prices for all items excluding international transportation gained 2.3% YoY and fell 0.2% MoM. (RTT)

Japan: Leading index increases in December. Japan’s leading index rose in December as initially estimated, final data from the Cabinet Office showed. The leading index, which measures the future economic activity, rose to 91.6 in December from 90.8 in November. The coincident index that reflects the current economic activity fell to 94.1 in December from 94.7 in the previous month. According to the initial estimate, the index remained unchanged. The lagging index rose to 105.0 in December from 104.4 in the prior month. The initial estimate was 106.9. (RTT)

South Korea: Manufacturers rapidly turn gloomier as virus spreads. South Korean manufacturers’ confidence slumped the most in five years as coronavirus fears threaten a nascent recovery in the trade dependent economy. The business outlook for March fell 8 points to 69 – the biggest drop since July 2015 when another coronavirus swept South Korea -- the Bank of Korea said. A separate gauge showing manufacturers’ assessment of the current business environment also plunged to a four-year low of 65. The figures show South Korea’s companies are bracing for or already suffering from the impact of a virus outbreak that has killed thousands in China and shut down parts of the economy there. The epidemic has now spread to South Korea, with the number of infections soaring in the past week and forcing some companies to temporarily close factories and retail outlets. (Bloomberg)


Prestariang: To dispose of education unit to Serba Dinamik. Prestariang is selling its boutique university which is owned and operated by its unit Prestariang Education SB to Serba Dinamik Group for RM2.5m. The disposal is part of Prestariang’s rationalisation plans to improve cash flow and working capital, while resetting the business to return to profitability. A conditional share sale agreement was sealed for SDGB to acquire University Malaysia of Computer Science and Engineering (UNIMY) owned by Prestariang Education. (The Edge)

MAHB: Goes ahead with RM600m upgrade at KLIA. MAHB is going ahead with its plan to replace ageing assets at the Kuala Lumpur International Airport (KLIA) as scheduled. This is despite the fact that the government is reviewing the regulated asset base (RAB) framework, which would have set out the funding mechanism for airport operators to spend on airport developments in the country. (The Edge)

Sunway: To open six new hospitals after strong growth in FY19. Sunway is expanding its healthcare business with six new hospitals in the pipeline as the group reported improved earnings in FY19. Net profit in FY19 rose 18.8% to RM766.6m compared with RM645.5m made a year ago. The Group has identified healthcare as one of its upcoming segments and plans to build six more hospitals in Malaysia, mainly located within the integrated townships of Sunway. The healthcare segment reported revenue of RM584.8m and profit before tax of RM61.8m in FY19. (StarBiz)

Econpile: Returns to black in 2QFY19. Econpile Holdings returned to the black with a net profit of RM8.65m 2QFY19 against a net loss of RM34.45m in the same period in the preceding financial year. The civil engineering company recorded a revenue of RM273.1m for the current six months financial period ended 6MFY19, mainly from the piling and foundation services business segment. (The Edge)

Nationwide Express: Triggers PN17 status. Nationwide Express Holdings has triggered the criteria pursuant to Practice Note No 17 (PN17) of the Main Market listing requirements of Bursa Malaysia Securities. Bursa Securities said it would continue to monitor the company's progress in respect of its compliance with the listing requirements. (The Edge)

Minda Global: Disposes of Hulu Langat education campus for RM30m . Minda Global said it is disposing of an education campus in Hulu Langat for RM30m cash. The property comprises 15 contiguous units of four-storey terrace blocks, a single storey auditorium and 18 units of shop offices and a car park area. Minda Globa’s indirect wholly-owned unit Asiamet Education Group SB has signed a sales and purchase agreement with Ascent Resource Holdings SB for the disposal. (The Edge)

IPO: Optimax to issue 70m new shares for ACE Market listing. Optimax is heading for a listing on the ACE Market of the bourse, with its IPO entailing a public issue of 70m new shares. Of this, 13.5m shares will be made available for the Malaysian public; 4m shares for eligible employees and directors; and 52.5m shares will go to Malaysian institutional and selected investors. They intend to use the IPO proceeds raised for capital expenditure, repayment of borrowings and working capital. (SunBiz)

Market Update

The FBM KLCI might open lower today as U.S. stocks closed with the Dow Jones Industrial Average registering its worst two day loss on record Tuesday, after the Centers for Disease Control and Prevention warned Americans to prepare for a coronavirus outbreak and investors attempted to assess the impact of the epidemic in China on global trade and travel. Global stocks were hammered Monday too, as investors feared disruptions to manufacturing supply lines with factories in China still struggling to re-open after quarantines were imposed on several cities in an attempt to contain the epidemic. The Dow Jones Industrial Average slid 879.44 points, 3.2%, to settle at 27,081.3, while the S&P 500 lost 97.68 points, 3%, to close at 3,128.21. The Nasdaq Composite fell below 9,000, shedding 255.67 points, or 2.8%, to end at 8,965.61. European stocks couldn’t hold early gains and lost 1.8% at the closing bell.

Back home, the FBM KLCI closed 10.82 points or 0.73% higher at 1,500.88, on bargain hunting, after Malaysian stocks' substantial drop yesterday into a bear market, as investors weighed factors including Malaysian political uncertainties, besides the global Covid-19 outbreak and crude oil price slump. Asian markets continued to fall, with Japan’s Nikkei —which had been closed for a holiday Monday — down over 3%. Australia’s S&P/ASX 200 fell 1.8%, though South Korea’s Kospi, which fell 4% on Monday, rebounded 1.2% on Tuesday.

Source: PublicInvest Research - 26 Feb 2020

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