PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 15 Jan 2021, 10:38 AM


PublicInvest Research Headlines - 27 Aug 2020

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US: Durable-goods orders unexpectedly quicken on auto boost . US orders for durable goods rose in July by more than double estimates, amid a continued surge in automobile demand, indicating factories will help support the economic rebound in coming months. Bookings for durable goods — or items meant to last at least three years — increased 11.2% from the prior month after a 7.7% jump in June, Commerce Department data. Core capital goods orders, a category that excludes aircraft and military hardware and is seen as a barometer of business investment, rose 1.9%, slightly more than forecast. (Bloomberg)

US: Fed seen holding rates at zero for five years in new policy. The Fed looks likely to keep short-term interest rates near zero for five years or possibly more after it adopts a new strategy for carrying out monetary policy. The new approach, which could be unveiled as soon as next month, is likely to result in policy makers taking a more relaxed view toward inflation, even to the point of welcoming a modest, temporary rise above their 2% target to make up for past shortfalls. (Bloomberg)

EU: French consumer confidence holds steady in Aug. French consumer confidence held steady in Aug as unemployment fears eased further in the euro zone’s second-biggest economy, a survey from the INSEE statistics agency showed on Wed. INSEE’s consumer confidence index held at 94, unchanged from July and in line with the average forecast in a Reuters poll of 14 economists. France has avoided a major spike in permanent unemployment as companies put workers on state-subsidised furloughs en masse. (Reuters)

China: PMIs to show recovery underway at slower speed. China’s purchasing managers’ indexes for August are likely to show the economy continued to make progress, albeit at a more moderate pace. The official and Caixin PMI readings are expected to remain comfortably above the 50-threshold, pointing to expansion. Further re-opening of overseas economies likely added support to the export sector, giving the export-oriented Caixin PMI a lift to 52.9. (Bloomberg)

Hong Kong: Exports continue to fall in July . Hong Kong's merchandise exports decreased at a faster pace in July, data from the Census and Statistics Department showed. Exports fell 3.0% YoY in July, following a 1.3% decrease in June. Shipments declined for the fifth consecutive month. At the same time, imports declined 3.4% annually in July, following a 7.1% fall in the previous month. Consequently, the trade deficit narrowed to HKD29.82bn in July from HKD32.17bn in the same month last year. (RTT)

Singapore: Industrial production falls in July . Singapore industrial production declined at a faster-than-expected rate in July, data from the Economic Development Board showed. Industrial production decreased 8.4% YoY in July, following a 6.5% decline in June. Economists had forecast a 5.7% fall. Excluding biomedical manufacturing, industrial output fell 5.2% annually in July, after a 2.2% rise in the prior month. (RTT)

Japan: Leading index rises less than estimated . Japan's leading index increased at a less than estimated pace in June, data the Cabinet Office showed. The leading index, which measures the future economic activity, rose to 84.4 in June from 78.3 in May. In the initial estimate, the reading was 85.0. The coincident index increased to 76.6 in June from 72.9 in the previous month. (RTT)

South Korea: Bank of Korea holds key rate as virus surge dims growth outlook. The Bank of Korea held its key interest rate amid mounting pressure on policy makers to take more action to ensure the resurgence of the coronavirus doesn’t derail the economy’s recovery. The BOK maintained its seven-day repurchase rate at 0.5%, a decision predicted by all 22 analysts surveyed by Bloomberg. The central bank is expected to cut its economic projection for 2020 after forecasting a 0.2% contraction in May. (Bloomberg)


Khee San: Sues another bank over repayment default, seeks RM114m in damages. Khee San has filed a writ of summons against United Overseas Bank (Malaysia) (UOB) over a payment default allegedly owed by the group’s wholly-owned unit Khee San Food Industries SB (KSFI). Khee San is seeking for the sum owed to the bank be set off in totality, or that the “fictitious” portion be omitted from repayment as the court directs. It is also claiming for a sum of RM114m or equivalent to RM1 to every shareholder of Khee San be paid by UOB as damages. Furthermore, it is asking for additional damages of RM140m for damage caused to Khee San in terms of operations and revenue loss including reputational damage to the group and its brands. (The Edge)

Berjaya Corp: Sign agreement on lottery operations cooperation with China Sports. Berjaya Corp (BCorp) and China Sports Lottery HKJC Infotech (Beijing) Co Ltd. (CSLJC) signed a cooperation framework agreement to cooperate on lottery management, business development and technical and market solutions to further expand the areas of cooperation and explore opportunities to jointly develop the third-party lottery market under a responsible gaming framework. The agreement will be for an initial five-year term starting Aug 26, 2020. (SunBiz)

XOX: In pact with Alipay to offer blockchain solutions in Asia Pacific. XOX has formed a strategic collaboration with Alipay Labs (Singapore) Pte Ltd, an affiliate company of Chinese billionaire Jack Ma's Ant Group Co Ltd, to offer blockchain-based solutions in the Asia Pacific region including Malaysia. XOX said the agreement with Alipay was effective from August 24 this year for three years. (Business Times)

Salcon, MMC, Ahmad Zaki: JV initiates RM85m arbitration proceedings against Pengurusan Aset Air. Salcon, MMC Corp and Ahmad Zaki Resources has commenced arbitration proceedings against Pengurusan Aset Air (PAAB), seeking a sum of RM85m. Salcon MMCB AZSB JV SB (SMAJV) is claiming the sum for work performed by the company in respect of the development of the Langat 2 water treatment plant and water reticulation system in Selangor and Kuala Lumpur, MMC said. (The Edge)

DNeX: 2Q dragged by impairment, proposes to take over all PPL stake. Dagang NeXchange (DNeX) posted RM26.4m net loss in the 2QFY20. The net loss was bogged down by an one off non-cash impairment loss totalling RM31.3m. Meanwhile, DNeX entered into a head of agreement (HOA) with Ping Petroleum Ltd (PPL) to acquire the remaining equity interest in PPL not currently owned by it. DNeX's investment in PPL stood at RM216m as at Dec 31 last year. (Business Times)

Power Root: 1Q profit down on lower sales, proposes 2.5 sen dividends. Power Root's net profit fell 15% to RM10.7m for the 1QFY21, from RM12.7m in the preceding quarter, due to lower local sales. The group also attributed the lower earnings to impairment of trade debts, bad debts written off and impairment loss on property, plant and equipment. It has proposed a first interim dividend of two sen and a special interim dividend of 0.5 sen per share. The entitlement date will be announced later. (The Edge)

Market Update

The S&P 500 and Nasdaq Composite rose to fresh record highs overnight as tech shares led the way higher again. Sentiment was also lifted by positive vaccine-related news and stronger economic data. Moderna Inc. said its coronavirus vaccine showed promising results in a small trial of patients aged 56 and older. On the data front, durable goods order rose by 11.2% in July. The Dow Jones Industrial Average rose 0.3% while the S&P 500 and Nasdaq Composite jumped 1.0% and 1.7% higher. European equities were also higher on the day ahead of a speech by Federal Reserve Chairman Jerome Powell. Sentiment was also helped by the US economic data and encouraging reports about US and China’s trade talks. Germany’s DAX and France’s CAC 40 rose 1.0% and 0.8%. UK’s FTSE 100 inched 0.1% higher. Asian markets were mostly lower earlier in the day however. Mainland Chinese stocks led losers in the region, with the Shanghai Composite Index slumping 1.3%. The Hang Seng Index and Nikkei 225 were largely unchanged. Benchmarks in Singapore and Malaysia fell 0.7% and 0.4%.

On notable corporate developments, TSH Resources is disposing of its 90% stakes in two Indonesian subsidiaries to Kuala Lumpur Kepong, realising cash proceeds of RM517.6m. Dagang NeXchange has backtracked from its plan to dispose of its 30% stake in Ping Petroleum Ltd, and instead wants to buy up the remaining 70% stake in the oil and gas exploration and production outfit via a combination of cash and new DNeX shares. Berjaya Corporation is partnering China Sports Lottery HKJC INFOTECH (Beijing) Co Ltd to explore opportunities to jointly develop a third party lottery market under a responsible gaming framework.

Source: PublicInvest Research - 27 Aug 2020

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