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Author: PublicInvest   |   Latest post: Mon, 18 Jan 2021, 11:45 AM

 

PublicInvest Research Headlines - 26 Mar 2020

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Economy

US: Core capital goods orders point to worsening business investment downturn. New orders for key US-made capital goods fell sharply in Feb as demand for machinery and other products slumped, suggesting a deepening contraction in business investment that analysts said signaled the economy was already in recession. Orders for non-defense capital goods excluding aircraft,  a closely watched proxy for business spending plans, dropped 0.8% in Feb after rising by a slightly downwardly revised 1.0% in Jan, the Commerce Department said. These core capital goods orders were previously reported to have increased 1.1% in Jan. (Reuters)

US: Durable goods orders unexpectedly jump 1.2% in Feb. A report released by the Commerce Department showed an unexpected increase in new orders for US durable goods in the month of Feb. The Commerce Department said durable goods orders jumped by 1.2% in Feb after a revised uptick 0.1% in Jan. The unexpected increase in durable goods orders was largely due to a substantial rebounded in orders for transportation equipment, which spiked by 4.6% in Feb after falling by 0.9% in Jan. "For once that wasn't driven by the volatile aircraft orders figures, but instead reflected a 1.8% increase in vehicle orders and a 32% MoM surge in other transport orders." (RTT)

EU: German business confidence logs record fall in March. German business sentiment logged its steepest fall ever recorded since German reunification, as the spread of coronavirus weighed on economic activity, final survey data showed Wednesday. The business confidence index fell to 86.1 in March from 96.0 in Feb. This was the biggest fall since German reunification and reached its lowest level since July 2009. The preliminary reading for March was 87.7. Sentiment among German managers has become extraordinarily dire, ifo said. "The German economy is in shock." The final survey showed that companies' expectations darkened as never before. Assessments of the current situation also worsened considerably. The business situation indicator came in at 93.0 in March versus 99.0 in the previous month. (RTT)

UK: Retail sales fall moderately in March - CBI. British retailers reported a moderate fall in sales in March but sales are expected to plunge next month, according to a survey from the Confederation of British Industry, released Wednesday. The retail sales balance fell to -3% from +1% in Feb, the Distributive Trends Survey showed. The results of the survey indicated that households are stockpiling groceries in response to the spread of the coronavirus and the introduction of social distancing, while they are putting off purchases of non-essential items. Looking ahead, retail sales volumes are expected to fall sharply in the year to April. (RTT)

UK: Inflation slows as expected in Feb. UK consumer price inflation slowed in Feb driven by motor fuels and computer games and output price inflation reached its lowest since mid-2016, data from the Office for National Statistics showed. Consumer prices advanced 1.7% from last year, as expected, slower than the 1.8% gain in Jan. This was also below the central bank's 2% target. Meanwhile, core inflation that excludes energy, food, alcoholic beverages and tobacco, rose to 1.7% from 1.6% in Jan. The expected rate was 1.5%. On a monthly basis, overall consumer prices rose 0.4% versus forecast of 0.3%. The drop in CPI inflation to 1.7% in Feb was a small sign of things to come. (RTT)

Thailand: Central bank leaves rate unchanged. Thailand's central bank left its key interest rate unchanged, after lowering it by a quarter at an unscheduled meeting last week. The Monetary Policy Committee of the Bank of Thailand voted 4-2 to hold the policy rate at 0.75%. Two members voted to reduce the rate by 0.25 percentage points. The bank had lowered the rate by 25 basis points at the meeting convened to assess the impact of the covid-19 outbreak on the economic outlook and domestic financial markets functioning. (RTT)

Markets

LKL: To supply RM6.6m of medical equipment to Sarawak government. LKL International will be supplying RM6.6m worth of personal protective equipment (PPE) for onward distribution to public hospitals under the Sarawak State Health Department. LKL said the supply would be timely as the state faces an increasing number of infections and deaths. LKL said the contract came on the back of PM Tan Sri Muhyiddin Yassin’s announcement on March 23 over an additional RM500m to the MoH to fight the outbreak across the country. (New Straits Times)

KAB: To buy two energy utility companies . Kejuruteraan Asastera (KAB) is taking up an 80% stake each in two companies involved in the renewable energy and energy efficiency-related business for RM7.26m cash in a deal that will see it assume liabilities worth some RM4.24m, which values the entire transaction at RM11.5m. The electrical engineering services company’s 90%-owned KAB Energy Power SB (KABEP) inked the Heads of Agreement with Invest Energy SB to acquire the stakes in the two companies, namely Konpro Industries SB (Konpro) and Meru One SB (Meru). (The Edge)

Glomac: 3Q net profit jumps over eight times to RM12.14m . Glomac’s net profit for 3QFY20 jumped more than eight times to RM12.14m or 1.56 sen per share versus RM1.43m or 0.18 sen per share in the previous year. The group attributed the significantly increased profitability to contributions from higher margin projects, better performance by the property investment segment and overall administrative cost savings during the period under review. Revenue for the quarter, which fell by 6.34% YoY to RM74.02m compared with RM79.03m previously, was underpinned mainly by its Saujana Perdana at Bandar Saujana Utama, Plaza @ Kelana Jaya, Saujana KLIA and Saujana Rawang developments. (The Edge)

Yinson: 4Q net profit up 7%, proposes 2 sen dividend. Yinson Holdings closed its 4QFY20 with its net profit up 7% to RM64.95m from RM60.7m in the same period last year, thanks to higher operating profit and lower tax incurred. Revenue jumped to RM1.86bn from RM287.6m previously, mainly due to the commencement of lease for floating production storage offloading (FPSO) vessel Helang that gave rise to outright sale recognition under classification of a finance lease. Yinson has proposed a final dividend of two sen per share, bringing FY20 total to six sen per share. (The Edge)

Rubber Gloves (Outperform): Glove-makers in Malaysia, warn of chronic shortage if full capacity doesn't resume . The Malaysian Rubber Gloves Manufacturers Association (Margma) is warning of the possibility of there being a chronic shortage in medical gloves, despite the industry working on an overdrive to meet both local and international demands, amid the deepening Covid-19 outbreak. While Malaysia’s requirement of 120m pieces per year can easily be fulfilled, it is the demand from the rest of the world that is going to be very challenging. This is especially the case, given the partial lockdown or movement control order (MCO) that has been put in place, which allow rubber glove manufacturers to operate with just 50% of their staff, it said. “This will mean only half of the normal quantity of gloves to be produced and it could really cause a chronic shortage to the world. On that point, Margma said it will continue to talk to the Government to allow members to operate at full capacity, together with the necessary support service and material suppliers. (The Edge)

Market Update

The FBM KLCI might open higher today after U.S. stocks on Wednesday finished well off their best levels and the Nasdaq turned negative in the final minutes of trade, as the passage of a US$2 trillion economic rescue package appeared to hit a snag. The Dow Jones Industrial Average rose 495.64 points, or 2.4%, to settle at 21,200.55. The S&P 500 rose 28.23 points, or 1.2%, to end at 2,475.56. The Nasdaq Composite turned negative, finishing down 33.56 points, or 0.5%, at 7,384.30. Progress on a U.S. fiscal stimulus package has been credited with providing some lift to beaten-down stocks over the past two sessions, as investors have worried about the depth of the coming recession and the rising death toll from the world-wide coronavirus pandemic that has infected 425,000 people and killed more than 20,000, as of Wednesday. However, late Wednesday, Sen. Bernie Sanders of Vermont, who is seeking the Democratic presidential nomination, said he would put a hold on the bill unless Republican senators dropped their objections. And Republican senators, including Ben Sasse of Nebraska, identified what they said may be an error in the bill involving unemployment benefits. In U.S. economics reports, durable goods orders jumped 1.2% in February, mostly because of big increase in bookings for new autos. The Stoxx Europe 600 closed 3.1% higher.

Back home, the FBM KLCI closed higher for the second consecutive day, riding on the optimism in global equities and as bargain hunting continued from the heavy sell-off earlier this month. The benchmark index closed up 33.36 points or 2.58% at 1,324.5, after having touched an intra-day high of 1,341.86 in the morning session. The market pared some morning gains following news that Malaysia will extend the Movement Control Order for another two weeks to April 14 as new COVID-19 cases and the death toll rose further, but the positive sentiment prevailed.In the region, stocks also ended sharply higher, with the China CSI 300 rising 2.7%, Hong Kong’s Hang Seng Index adding 3.8% and Japan’s Nikkei 225 surging 8% after an 7.1% gain the previous session.

Source: PublicInvest Research - 26 Mar 2020

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Labels: LKL, GLOMAC, KAB, YINSON

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YINSON 5.59 -0.09 (1.58%) 770,200 

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