PublicInvest Research

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


PublicInvest Research Headlines - 9 Jul 2020

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Global: Global economy to contract by 5.2% in 2020 – Report. The global economy is likely to contract by 5.2% in 2020 with the coronanvirus still spreading and the economic prospects of countries across the world looking muted. According to Dun and Bradstreet's (D&B) Country Risk and Global Outlook Report, the wider global context remains sombre and the global economy will not reach pre-pandemic levels of activity again before 2022. D&B is currently forecasting that the global economy will contract by 5.2% in 2020, the biggest decline since the Second World War and a far stronger contraction than the 1.7% recorded in 2009 during the global financial crisis. (Economic Times)

US: Consumer credit slumps more than expected in May. After reporting a sharp drop in US consumer credit in the previous month, the Fed released a report showing consumer credit continued to decline in the month of May. The Fed consumer credit slumped by USD18.2bn in May after plunging by a revised USD70.2bn in April. Economists had expected credit to decrease by USD15.5bn compared to the USD68.7bn nosedive originally reported for the previous month. The continued decrease in consumer credit came as another sharp drop in revolving credit more than offset a rebound in non-revolving credit. Revolving credit, which largely reflects credit card debt, tumbled by USD24.3bn in May after plummeting by USD58.2bn in April. Meanwhile, non-revolving credit, such as student loans and car loans, rose by USD6.0bn in May after slumping by USD12.0bn in the previous month. (RTT)

EU: Lagarde says ECB has time to assess stimulus effectiveness. Christine Lagarde signalled the ECB will keep policy unchanged at its next meeting after its massive emergency stimulus helped calmed markets. The ECB president said that measures unleashed in the wake of the pandemic have “demonstrated its efficiency and its effectiveness.” The Governing Council’s next decision is in just over a week, its first since it almost doubled the size of its pandemic purchase program to EUR1.35trn (USD1.52trn). Lagarde’s comments confirm the ECB has effectively switched to a wait-and-see mode after the economy began to bounce back. (Bloomberg)

EU: German economy likely to grow again from October or November – minister. Europe’s largest economy will likely start to grow again from October or November said the German Economy Minister Peter Altmaier. The German economy has been battered by the coronavirus crisis, with economic output contracting by 2.2% in the 1Q, its steepest rate since 2009. The government expects the economy to shrink by 6.3% this year, its worst recession since World War Two. (Reuters)

UK: Hiring activity continues to fall in June. UK hiring activity continued to fall in June as clients continued to freeze or cut back on their recruitment plans due to the coronavirus pandemic, the Report on Jobs compiled by IHS Markit showed. Both permanent staff placements and temporary billings decreased at notably weaker rates than in April and May when the covid-19 pandemic was at its most severe. However, rates of contraction remained sharp. (RTT)

UK: Sunak gambles GBP30bn on plan to save economy. Rishi Sunak set out a GBP30bn (USD37.6bn) blueprint to save jobs and inject confidence into the UK’s coronavirus-battered economy. In a statement to Parliament, the Chancellor of the Exchequer announced tax cuts on home-buying and dining out, and a new bonus program for employers who don’t fire their staff. (Bloomberg)

Japan: Has JPY1,176.8bn current account surplus. Japan posted a current account surplus of JPY1,176.8bn in May. That exceeded expectations for a surplus of JPY1,088.2bn and was up from JPY262.7bn in April. The trade balance showed a deficit of JPY556.8bn, down 18.1% on year. Exports tumbled 28.9% a year to JPY4.2trn, while imports sank an annual 27.7% to JPY4.75trn. (RTT)


AirAsia (Neutral, TP: RM0.78): Weighs raising RM1bn via rights issue. AirAsia Group is considering raising about RM1bn through a rights issue after an external auditor raised concerns about its viability, according to a person with knowledge of the matter. AirAsia is also weighing raising additional funds via the sale of stakes in its digital and cargo units in order to further strengthen its financial position, said the person. (Bloomberg)

Gagasan Nadi: To build affordable homes in Shah Alam worth RM777m. Gagasan Nadi Cergas is planning to build 4,319 units of affordable homes in Shah Alam worth RM777m under the Rumah Idaman programme. This would be its largest ever construction project. Group MD Wan Azman Wan Kamal said, the project is expected to contribute positively to the group in the FYE Dec 31, FY2021 to 2027. The overall duration of the project is over six years till 2026. (SunBiz)

Focus Dynamics: In early talks on potential F&B acquisitions. Focus Dynamics Group is exploring opportunities to expand its core business in the F&B segment via mergers and acquisitions (M&A) to enhance its earnings and improve its financial performance. “In addition, the group is currently in an exploratory stage for a potential merger/acquisition exercise with another company that has a sizeable assets base. (SunBiz)

Muar Ban Lee: Proposes 1-for-1 bonus issue. Muar Ban Lee Group (MBL) has proposed a 1-for-1 bonus issue of up to 147.1m shares. MBL said the bonus issue is not expected to have any material effect on its earnings for the FYE Dec 31, 2020. However, there will be a corresponding proportional dilution in MBL’s consolidated EPS, as a result of the increase in the number of issued MBL shares pursuant to the bonus issue, it added. The bonus issue is expected to be completed in the 3Q this year. (The Edge)

SEGi: To lease Subang Jaya space from HCK in related party deal. SEG International (SEGi) said it has agreed to lease space in HCK Capital's upcoming project in Subang Jaya for the expansion of SEGi College Subang Jaya. SEGI said the space comprises an indoor area of 141,253 sq ft and outdoor area of 7,020 sq ft in one of four towers and part of the podium of Edumetro @ Subang Jaya. SEGi said the total rental amount will be RM58.6m for the tenure of 12 years. (The Edge)

Nationwide Express: Sells Shah Alam property at a loss to boost financial position. Nationwide Express Holdings is disposing of a property in Shah Alam to real estate company Rubicon Lexington SB at below market price. The selling price of RM19.4m is a discount to the market value of RM22m, the group said. The disposal of the property would result in a net loss of RM3.8m. (The Edge)

Cymao: Disposes of loss-making laminated product business for RM9.1m. Cymao Holdings is disposing of its loss making laminated product business for RM9.1m in a related party transaction. It said it is selling its 100% stake in Poly-Ply Industries SB to Zinton SB which is equally owned by Taiwanese nationals Lin Kai-Min and Lim Yu-Lin. The proceeds from the sale of laminated product business would be used to fund its capital expenditure and working capitals. (The Edge)

Market Update

  • The FBM KLCI might open higher today as US stocks ended Wednesday higher, with the tech-heavy Nasdaq scoring an all-time record, as investors focused on stocks that can outperform amid an acceleration of coronavirus infections in about 30 American states and longer periods of working from home. The Dow Jones Industrial Average rose 177.10 points, or 0.7%, to end at 26,067.28, after trading as high as 26,109.49 at the start of the session. The S&P 500 climbed 24.62 points, or 0.8%, to finish at 3,169.94. The Nasdaq Composite added 148.61 points, or 1.4%, closing at a fresh 10,492.50 record, it’s 25th of the year. In European equities, the Stoxx Europe 600 index fell 0.7%, and London’s FTSE 100 shed 0.6%. 

    Back home, the FBM KLCI finished 16.78 points or 1.07% higher at 1,583.50 in heavy trading on liquidity-driven buying. In regional markets, Japan's Nikkei 225 dipped 0.78% and South Korea's Kospi sank 0.24%. Hong Kong’s Hang Seng Index, however, gained 0.59% while the Shanghai Stock Exchange Composite Index rose 1.74%.

Source: PublicInvest Research - 9 Jul 2020

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