PublicInvest Research

Author: PublicInvest   |   Latest post: Thu, 22 Oct 2020, 9:57 AM


PublicInvest Research Headlines - 6 Jul 2020

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US: Goldman lowers US GDP forecast, sees 4.6% contraction in 2020 . Goldman Sachs revised down their estimates for the US economy this quarter, but predicted it will be back on track in September after some states imposed fresh restrictions to combat the coronavirus. While consumer spending appears likely to stall this month and next, economists led by Jan Hatzius said other economies have proved it’s possible to resume activity and changes in behaviour such as wearing masks will help too. (Bloomberg).

EU: Eurozone private sector activity rebounds in June. Eurozone private sector activity rebounded in June, as businesses reopened despite challenging economic conditions posed by the coronavirus pandemic. The final composite output index climbed to 48.5 in June from 31.9 in the previous month. The flash score was 47.5. (RTT)

EU: Eurozone unemployment rises less than expected. Despite a deep recession, the euro area jobless rate rose only marginally in May as the short-time work programs of member countries to support jobs amid the downturn caused by the coronavirus pandemic suppressed actual unemployment. The unemployment rate climbed to 7.4% in May from 7.3% in April. In the same period last year, the jobless rate was 7.6%. (RTT)

EU: Producer prices decline further. Eurozone’s producer prices decreased 5.0% on a yearly basis in May, following a 4.5% decline in April. Economists had expected a fall of 4.8%. Excluding energy, producer prices declined 0.6% in May after a 0.3% fall in the prior month. Energy prices declined 17.2% in May. On a MoM basis, producer prices fell at a slower pace of 0.6% in May following a 2.0% decrease in April. This was the fourth straight decline in prices. (RTT)

UK: Historic slump among UK companies levels off in June - PMI. The IHS Markit/CIPS UK Services PMI rose to 47.1 from 29.0 in May, slightly higher than a preliminary reading of 47.0 but still below the 50 threshold for growth. The survey showed 33% of services businesses, which account for the vast bulk of Britain’s economy, reported a drop in activity, down from 54% in May, while 28% reported a rise. (Reuters)

UK: Service sector contraction sharply slows in June. The pace of deterioration in the UK service sector slowed sharply in June, as more businesses reopened and started operating after meeting the social distancing requirements meant to fight the Covid-19 pandemic. The final CIPS UK services PMI, climbed to 47.1 from 29 in May. The flash for June was 47. The latest reading was the highest in four months and well above April's record low of 13.4. (RTT)

UK: Consumer confidence improves moderately – GfK. UK consumer sentiment improved at the end of June, according to the flash survey conducted by the market research group GfK. The consumer sentiment index rose three points to -27 over the last two weeks of June. The June reading was -30. Four measures of the index increased, while one measure decreased. Assessment of past and future financial situation strengthened during the survey period. Consumers' view on past general economic situation weakened, while outlook for future economic situation improved.

China: Services sector grows at fastest pace in over a decade in June - Caixin PMI. The Caixin/Markit services PMI rose to 58.4, the highest reading since April 2010, from May’s 55.0, pulling further away from the trough hit in February as the coronavirus lockdown paralysed the economy. The rebound suggests China’s overall recovery is becoming more balanced and broader based as life slowly returns to normal in one of the world’s biggest consumer markets, though analysts believe it will take months for activity to return to pre-crisis levels. (Reuters)

Japan: Service sector contracts at slower pace in June. The au Jibun Bank services PMI rose sharply to 45.0 in June from 26.5 in May. This was above the flash estimate of 42.3. Any reading below 50 indicates contraction in the sector. Output increased in June and new orders decreased due to the economic effects of Covid-19. (RTT)


Sino Hua-An: Buys Hong Kong-based IoT firm for RM150m. Sino Hua-An International Bhd is acquiring Hong Kong’s internet of things (IoT) firm HK Aerospace for USD35m (RM150m) to strengthen the former’s digital transformation and digital ecosystem solutions. The group has inked share subscription and share purchase agreements with Dr Wan Muhamad Hasni Wan Sulaiman, Nong You Hua and Satriya Suetoh for the acquisition, it said. (The Edge)

Boustead: Unit gets winding up petition over RM56m debt. Boustead Holdings said its subsidiary Boustead Naval Shipyard SB (BNS) has been served with a winding up petition over an alleged debt of RM56m. The group said the petition was served by MTU Services (Malaysia) SB. (The Edge)

Anzo: To acquire assets for glove production for RM55m . Anzo Holdings is acquiring assets comprising lands, buildings, machineries, equipment and vehicles from Wintrade World SB for RM55m in cash, to produce medical and nitrile gloves. The group said it had entered into a Term Sheet with Wintrade for the acquisition of the assets that are located in Manjung, Perak. “The assets are ready to be mobilised and commissioned to produce approximately 100m pieces of medical and nitrile gloves per month. (The Edge)

Ikhmas Jaya: Unit sued over RM2.7m debt. Ikhmas Jaya Group said that its subsidiary has been slapped with a lawsuit over an unpaid debt of RM2.69m and also served with a winding up petition over another debt of RM268,011. The group said its wholly-owned Ikhmas Jaya SB (IJSB) is being sued by Choo Seng Hardware Co (Ipoh) SB over alleged non-payment of RM2.69m for tools and equipment supplied. (The Edge)

MUI: Unit selling retail space at below market value to ensure speedy disposal. Malayan United Industries (MUI) said its unit agreed to sell a freehold retail space in Penang at below market value to conclude negotiations quickly given the current economic uncertainties. The RM3m discount was also a gesture of goodwill to the purchaser, who has been a tenant of the property since 2010, the group said in response to a query from Bursa Malaysia on the discounted price. (The Edge)

Sinotop: Dapat Vista collaborates with Bank Islam, PTPTN, Fass Payment to expand MyPay’s capabilities. Sinotop Holdings' 51% subsidiary Dapat Vista (M) SB has launched MyPay’s digital payments, digital financing and e-wallet features in collaboration with the National Higher Education Fund Corporation (PTPTN), Bank Islam and Fass Payment Solutions SB. The collaboration is aimed at expanding MyPay’s capabilities. (SunBiz)

Telco (Neutral): MCMC fines five telcos for non-compliance with service quality standards. The Malaysian Communications and Multimedia Commission (MCMC) said it had issued 92 compounds amounting to RM4.6m to telcos Celcom Axiata, Digi Telecommunications SB, Maxis Broadband SB, TT dotCom SB and Telekom Malaysia (TM) between Jan and June 2020 for offences including non-compliance with the regulator’s billing-complain resolution and customer-hotline management standards. (The Edge)

Market Update

The FBM KLCI might open flat today after London stocks fell on Friday, as weak oil prices weighed on major energy names, and alongside concerns that next week’s summer statement from the U.K. Chancellor will lack big tax cuts. The FTSE 100 dropped nearly 1% to 6,180.18, while the pound was flat at $1.2454. U.S. markets are closed on Friday for the Independence Day holiday, something that was keeping volumes pinned down in Europe. The U.K. services purchasing managers index posted 47.1 in June, up sharply from 29.0 in May and the highest for four months. But it was in line with an earlier ‘flash’ figure of 47.0 in June.

Back home, the FBM KLCI closed higher led by gains in glove counters which attracted fresh buying interest as prospects for the industry strengthened further amid rising COVID-19 cases globally. The benchmark index closed 1.07% or 16.37 points higher at 1552.65. Regional markets finished broadly higher on Friday with shares in China leading the region. The Shanghai Composite was up 2.01% while Hong Kong's Hang Seng added 0.99% and Japan's Nikkei 225 rose 0.72%.

Source: PublicInvest Research - 6 Jul 2020

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