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Author: PublicInvest   |   Latest post: Fri, 27 Nov 2020, 11:04 AM

 

PublicInvest Research Headlines - 14 Jul 2020

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Economy

US: Consumers more secured about jobs but earnings expectations drop – New York Fed survey. US consumers are more optimistic that the worst of the economic crisis sparked by the pandemic is behind them, but are still concerned about their earnings and their ability to find new jobs if they become unemployed, according to a survey released by the New York Federal Reserve. Workers became less concerned about becoming jobless, with consumers saying there was a 15% chance that they would lose their jobs in the next year. That dropped 3.6 ppts from May and is the lowest since February, when consumers registered a 13.8% chance of losing their jobs over the next 12 months. (Reuters)

EU: Germany’s wholesale prices fall at slower pace. Germany's wholesale prices continued to fall in June, but the pace of decline slowed, data from Destatis revealed. Wholesale prices dropped 3.3% annually in June after easing 4.3% in May. This was the fifth consecutive decrease in prices. On a monthly basis, wholesale prices advanced 0.6% in June, offsetting a 0.6% fall in May. Prices climbed for the first time since February. Data showed that petroleum product prices decreased 23.4% MoM, while mineral oil product prices grew 8.9%. (RTT)

EU: Germany’s economy start to recover – Economy Ministry. Germany's economy began to recover after easing of coronavirus containment measures, the Economy Ministry said. The economy has passed the trough. However, the ministry said the recovery process is just beginning and the capacities are still underutilized. According to ministry, industrial production has bottomed out. Production is expected to pick up in months ahead on increased order intake. Nonetheless, weak demand from non-EU economies remains a risk for the further recovery. Further, the government noted that leading indicators recovered somewhat but a lasting improvement is not expected in the coming months. (RTT)

UK: Consumer spending recovers a little more in June, surveys show. A release of pent-up demand after the coronavirus lockdown spurred a rebound in retail sales last month, although overall consumer spending remains far below normal levels, surveys showed. The British Retail Consortium trade body said retail sales values rose by 3.4% in annual terms in June, the biggest increase since May 2018, although the reading was flattered by the comparison with unusually weak sales in June 2019. The turnaround is especially sharp when compared with a 19.1% fall in spending recorded in April. Food, computing and furniture sales were bright spots last month but clothing and health and beauty sales remained weak. Separately, Barclaycard said overall consumer spending fell 14.5% in annual terms in June - the smallest decline since lockdown began. (Reuters)

Japan: Tertiary activity falls for fourth month. Japan's tertiary industry activity declined for the fourth month in a row in May, data from the Ministry of Economy, Trade and Industry showed. Tertiary industry activity decreased 2.1% MoM in May, following a 7.7% fall in April. This was the fourth consecutive decline. Data showed that the broad-ranging personal services declined 0.6% in May, and broad-ranging business services fell 3.9%. Among components, wholesale trade, information and communication, transport and postal activities, electricity, gas, heat supply and water, medical, health care and welfare, goods rental and leasing, and finance and insurance declined in May. Meanwhile, retail trade, living and amusement-related services, business related services, and real estate increased from the previous month. (RTT)

India: Inflation exceeds expectations in June. India's consumer prices increased more than expected in June largely driven by higher food prices, data from the National Statistical Office revealed. Consumer prices climbed 6.09% YoY in June, which was above economists' forecast of 5.3%. The government did not release the headline consumer price inflation data for April and May due to insufficient data during the nationwide lockdown. In March, inflation was 5.9%. The central bank aims to keep headline consumer price inflation at 4%within a band of +/- 2%. Food price inflation slowed to 7.87% in June from 9.2% in May. Data showed that clothing and footwear prices increased 3.53% and housing cost advanced 3.55%. Fuel and light cost moved up 2.69% annually. (RTT)

Thailand: Plans USD3.2bn soft loans to help tourism, services. Thailand plans THB100bn (USD3.2bn) of new soft loans to help SMEs in the tourist and services sector hit by the coronavirus pandemic, the finance minister said. The loans will offer more relaxed conditions than the central bank's THB50bn soft loan scheme, Uttama Savanayana told. "These will reduce operators' costs and give them liquidity to keep jobs. It should be released soon," he said. The loans will follow various relief measures for SMEs which the finance minister has said employs 80% of the total workforce. Although Thailand has recorded no domestic transmissions for more than one month, the global impacts of the pandemic have hit the economy badly, especially tourism, with a border closure keeping visitors out and weaker demand for international air travel set to slow its recovery. (Reuters)

Markets

Can-One: Buys 68 acres of land in Klang for RM103.6m to build manufacturing hub. Can-One is buying two plots of freehold land in Klang for RM103.55m to be used as a new manufacturing hub and warehousing facility. The acquisition of the plots, measuring 68 acres, is also aimed at relocating some of the group’s operations in the Klang Valley and consolidating them in one location to improve operating efficiency. The group is acquiring the plots via its indirect wholly-owned subsidiary Bintang Seribu SB, from Golden Valley Industries SB (GVI), a subsidiary of Klanggroup Holdings SB. The proposed acquisition will be funded via bank borrowing, indicatively in the proportion of 80%, while the balance will be from internally-generated funds. (The Edge)

Lambo: Buys stake in Focus Dynamics for RM25.6m. Lambo said its unit, Oriented Media Holdings Ltd in Hong Kong had purchased the shares for RM25.65m at an average price of RM1.12 each from the open market. Lambo said that Focus Dynamics has a subsidiary Marquee International SB which operates and manages food and beverage outlets in Malaysia. The board of directors feels that this represents an opportune time to take a strategic stake in Focus as their subsidiary. (StarBiz)

Saudee: To buy two meat trading firms for RM20m via share issue. Frozen food processor Saudee Group has proposed the acquisition of two meat trading firms for RM20 million in a move to expand its offerings, especially the premium product range. Saudee said the acquisitions will allow the group to realise potential synergies, including cross-selling opportunities and better cost efficiencies arising from the consolidation of operations and utilisation of spare resources. (The Edge)

Protasco: Sells three plots of land in Johor to NSK for RM17m . Protasco is disposing of three plots of commercial land in Johor to NSK Property SB for RM16.72m in cash, with proceeds to be used to pare down its existing term loan and generate additional cash flow. Its wholly-owned Sun Rock Development SB had inked a sale and purchase agreement with NSK Property for the sale. The disposal would give it a one-off gain of some RM3.07m. (The Edge)

GHL: Philippines arm gets approval to begin lending operations. GHL Systems Philippines Inc, a wholly-owned subsidiary of GHL Group, announced that its new lending unit GHL Philippines Financing Services has received relevant certifications to commence operations. GHL Philippines follows closely behind GHL’s Malaysian and Thai arms, which launched their lending operations towards the end of 2019, as the third unit in the group to offer lending services to the merchant base. (The Edge)

IPO: Reservoir Link reports RM2.72m net profit for 1Q. Oil and gas well services provider Reservoir Link Energy has recorded RM2.72m net profit for its 1QFY20. They group also reported revenue of RM22.86m for the period under review, of which 90.6% was derived from well perforation services, wash and cement services and well leak repair services segments. On its prospects, Reservoir Link said economic uncertainties arising from the Covid-19 pandemic and low oil prices have forced many global oil majors to cut back on their capital expenditure and operating expenses. (The Edge)

Market Update

The FBM KLCI might open lower today as US stocks closed mostly lower Monday, with the Dow clinging to a modest gain, after technology stocks fell and rising coronavirus cases led California’s governor to order businesses across the state to shutter once again. Equity benchmarks started with sharp gains after the Food and Drug Administration granted “fast track” status to a pair of vaccine candidates produced by Pfizer and German biotech firm BioNTech SE. The Dow Jones Industrial Average eked out a 10.50 point gain, a rise of less than 0.1%, to end at 26,085.80. The Nasdaq Composite tumbled 226.60 points, or 2.1%, to close at 10,390.84, after setting a new intraday record at the start of trading. The S&P 500 fell 29.82 points, or 0.9%, to finish at 3,155.22. In Europe, the pan-European Stoxx 600 Europe Index finished 1% higher, while London’s FTSE 100 gained 1.3%.

Back home, the FBM KLCI finished up 14.59 points or 0.92% at 1,606.43, led mainly by rubber glove manufacturers Top Glove Corp Bhd and Hartalega Holdings Bhd's share price rise amid rising Covid-19 infections globally. In the region, the Shanghai Composite rose 1.8%, while the CSI 300 Index advanced 2.1%. Japan’s Nikkei 225 Index rose 2.2%, while the Hang Seng Index in Hong Kong edged up 0.2%.

Source: PublicInvest Research - 14 Jul 2020

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