PublicInvest Research

Author: PublicInvest   |   Latest post: Thu, 24 Sep 2020, 10:46 AM


PublicInvest Research Headlines - 5 Aug 2020

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US: Factory orders spike more than expected in June. A report released by the Commerce Department showed another substantial increase in new orders for US manufactured goods in the month of June. The Commerce Department said factory orders soared by 6.2% in June after skyrocketing by a revised 7.7% in May. Economists had expected factory orders to jump by 5.0% compared to the 8.0% spike originally reported for the previous month. The bigger than expected increase in factory orders came as orders for durable goods surged up by 7.6% in June after soaring by 15.0% in May. (RTT)

US: Fed's Daly says length of support needed by economy will have to be longer . The coronavirus outbreak will be staying for “longer and more vigorously” than initially anticipated, which will lead to the US economy needing more support than initially thought, Federal Reserve Bank of San Francisco President Mary Daly said. (Bloomberg)

US, China: Plan to review Phase-One trade deal in mid-August. Senior US and Chinese officials are planning to assess the nations’ phase-one trade agreement this month against a backdrop of rising tensions between the countries, according to people briefed on the matter. The discussion, led by US Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He, would take place on or around Aug. 15, six months after the agreement took effect, as directed in the text of the accord, the people said. (Bloomberg)

EU: Eurozone producer prices rise for first time in 5 months . Euro area industrial producer prices increased for the first time in five months in June and at a faster than expected pace, even though economic activity remained damped by the Covid-19 containment measures in most of the countries in the EU, preliminary data from Eurostat showed. The producer price index for Eurozone rose 0.7% from May, when it fell 0.6%. Economists had forecast a 0.5% increase. On a YoY basis, producer prices fell 3.7% after a 5% drop in May. Economists had expected a 3.9% decline. (RTT)

EU: ECB’s Lane warns of slow recovery amid virus resurgence . ECB chief economist Philip Lane cautioned against reading too much into recent economic data and warned that a global resurgence of coronavirus cases will weigh on consumers and businesses for some time. It would be “unwise” to draw strong conclusions from the euro area’s less- bad-than-expected 2Q performance, which should be jointly assessed with the three months through September, Lane said in a blog post published on the ECB’s website. He also said a rise in coronavirus infections in some European regions as well as globally is dampening consumer spending and business investment. (Bloomberg)

Australia: RBA holds key rate at record low . Australia's central bank maintained its interest rate at a record low and quantitative easing unchanged as the package unveiled in March is supporting the economy as expected. The board of Reserve Bank of Australia, governed by Philip Lowe, decided to maintain cash rate and the targeted yield on three-year government bonds of 25 b.p. Lowe said the bank will buy government securities in the secondary market on Wednesday to ensure that the yield on 3-year bonds remains consistent with the target. (RTT)


DRB-Hicom (Outperform, TP: RM2.18): Proton July sales highest monthly volume for 8 years. Proton Holdings sold 13,216 vehicles in July 2020, its highest monthly sales volume since June 2012. Four models ended July as sales leaders in their respective segments as overall sales grew by 37.3% over June 2020. It also shared that the Malaysian car sales continued to rebound in July as a combination of tax-free incentives and consumer demand, pushing Total Industry Volume (TIV) to a 13- month high. (SunBiz)

Kossan (Neutral, TP: RM8.80), Green Ocean and AT Systematization: Refute news report on formation of glovemaking pact. Kossan Rubber Industries, Green Ocean Corp and AT Systematization have denied that they are in a partnership to form a glove-making pact. In separate bourse filings, the three companies refuted a news report that said they were working together on a partnership. "Kossan wishes to clarify that the company is neither aware of nor involved in the glove-making pact or tripartite partnership." (The Edge)

Alam Maritim: Awarded 5-year contract from Repsol Oil & Gas Malaysia. Alam Maritim Resources announced that its wholly-owned subsidiary, Alam Maritim (M) SB, has received a letter of award from Repsol Oil & Gas Malaysia Ltd for the provision of subsea inspection, maintenance and repair services for PM3-CAA. It said the contract value is as per the work order request by Repsol Oil & Gas Malaysia for a duration of five years. The contract has been effective since June 30, 2020 with its first vessel mobilisation for this year targeted for the middle of August. (The Edge)

Aemulus: Plans to raise up to RM24m via private placement. Aemulus Holdings plans to raise up to RM23.6m via a private placement to fund potential business investments and reduce bank borrowings. The group has proposed to undertake a private placement of up to 54.9m shares representing 10% of its total number of issued shares to third-party investors to be identified later, it said. The enlarged number of issued share capital will be 604.4m post private placement. The issue price, it said, will also be determined later by the group's BOD. (The Edge)

MPHB Capital: Decides to exit insurance business, seeks BNM nod to start talks with Generali. MPHB Capital has announced that it is seeking Bank Negara Malaysia's (BNM) green light to start talks with Generali Asia on the divestment of its 51% stake in MPI Generali. Its wholly-owned subsidiary MultiPurpose Capital Holdings (MPCHB) submitted another application to the central bank for the approval in principle to commence and enter into negotiations with Generali Asia, which currently holds the remaining 49% stake in MPI Generali. (The Edge)

F&N: Net profit for 3Q down 18% as consumer demand hit by Covid-19, MCO. Fraser & Neave Holdings’ (F&N) net profit for its 3QFY20 fell 18.3% to RM93.8m from RM114.9m a year ago, reflecting the adverse impact of the Covid-19 pandemic and movement control measures on consumer demand. “Post-June, we are seeing tentative signs of recovery in demand from Malaysia, Thailand and some of our export markets. As such, we are cautiously optimistic that sales in the 4Q will be better than 3Q as economic activities gradually normalise,” F&N said. (SunBiz)

Market Update

  • The FBM KLCI might open higher today after US stocks concluded a bumpy trading session on a high note Tuesday, with another record for the Nasdaq Composite, even as technology-related names took a backseat to outperformance in beaten-down sectors energy, real estate and consumer staples. Investors parsed a trove of quarterly results from U.S. corporations and awaited a resolution to a stalemate between congressional Democrats and Republicans on a fresh fiscal relief package for Americans that have been put out of work due to the COVID-19 pandemic. The Dow Jones Industrial Average picked up 164.07 points, or 0.6%, at 26,828.47, the S&P 500 index rose 11.90 points, or 0.4%, to 3,306.51 and the Nasdaq Composite Index finished 38.37 points, or 0.4%, to close at 10,941.17. European equity markets ended little changed. The Stoxx Europe 600 index declined less than 0.1%, and the FTSE 100 advanced 0.1%.

    Back home, the FBM KLCI finished up 3.33 points or 0.21% at 1,575.94 with top gainers included rubber glove manufacturers Supermax Corp Bhd and Top Glove Corp Bhd. In the region, China’s CSI 300 index gained less than 0.1%, the Shanghai Composite Index inched 0.1% higher. Japan’s benchmark Nikkei index climbed 1.7% after a 2.2% gain on Monday

Source: PublicInvest Research - 5 Aug 2020

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