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PublicInvest Research

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

 

PublicInvest Research Headlines - 14 Sept 2020

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Economy

US: Consumer prices rise slightly more than expected in Aug . A report released by the Labor Department on Friday showed consumer prices in the US increased by slightly more than anticipated in the month of Aug. The Labor Department said its consumer price index climbed by 0.4% in Aug after advancing by 0.6% for two straight months. Economists had expected consumer prices to rise by 0.3%. Excluding food and energy prices, core consumer prices still rose by 0.4% in Aug following a 0.6% increase in July. Core consumer prices were expected to edge up by 0.2%. (RTT)

US: Cost of living is higher than official inflation rate shows. If the costs of living these days seems to be rising faster than the official 1.3% inflation rate, there’s a reason. The annual inflation rate for Covid-connected purchases is 1.85%, or a half percentage point higher than the CPI, according according to Harvard Business School professor Alberto Cavallo. Prices of such goods as groceries and paper towels that have been flying off the shelves during the pandemic are experiencing higher inflation compared with the costs of some less-popular purchases such as gasoline, he said. (Bloomberg)

EU: German consumer prices unchanged in Aug . Germany's consumer prices were unchanged in Aug after a modest decline in July, latest data from Destatis confirmed. The consumer price index was unchanged on a YoY basis, after a 0.1% fall in July. Compared to the previous month, the index decreased 0.1%. The harmonized index of consumer prices, or HICP, dropped 0.1% YoY after remaining unchanged in July. The index fell for the first time since May 2016. On a MoM basis, the HICP declined 0.2%. The YoY decline in energy prices eased to 6.3% from 6.7% in July. (RTT)

UK: Economy continues recovery in July . The UK economy expanded for the third straight month in July as lockdown measures continued to ease though it has still only recovered just over half of the lost output caused by the coronavirus. GDP expanded 6.6% in July from June, when it gained 8.7%, data published by the Office for National Statistics. GDP was forecast to climb 6.7%. "While it has continued steadily on the path towards recovery, the UK economy still has to make up nearly half of the GDP lost since the start of the pandemic," ONS director of economic statistics Darren Morgan said. GDP was 11.7% lower than the pre-pandemic levels seen in February 2020. (RTT)

China: Bank lending increases in Aug . China's bank lending increased in Aug as the economy started to recover from the coronavirus driven downturn, data from the People's Bank of China. Banks offered CNY1.28trn loans in Aug. This was bigger than the expected level of CNY1.22trn and CNY992.7bn loans provided in July. Total social financing, a broad measure of credit and liquidity in the economy, surged to CNY3.6trn from CNY1.69trn in July. The broad money supply M2 climbed 10.4% on year, slower than the 10.7% growth logged in July. (RTT)

Markets

Dialog (Outperform, TP: RM4.10): Lodges sukuk programme up to RM3bn. Dialog Group has lodged an Islamic notes issuance programme of up to RM3bn in nominal value based on the shariah principle of Wakalah Bi Al-Istithmar (sukuk programme) with the Securities Commission Malaysia. Dialog said the proceeds from the issuance of the Sukuk Wakalah would be utilised to finance investments, acquisition, capital expenditure, working capital requirements, repayment of intercompany borrowings. (Business Times)

RHB Bank: To issue senior sukuk to raise up to RM10bn. RHB Bank plans to issue up to RM10bn in senior sukuk murabahah, which will be in multi currencies including the ringgit. The proceeds raised from the sukuk will be used for its working capital and general banking purposes of Islamic business activity. It will also be used for the refinancing and redemption of Islamic financing facilities for Islamic business purposes. (The Edge)

Luster: To raise up to RM47m via private placement for manufacturing business. Luster Industries has proposed a private placement to raise between RM30.3m and RM47.2m for general working capital, including for the purchase of raw materials. The placement entails an issuance of up to 20% of the plastic products manufacturer's issued shares to a third-party investor to be identified later, at an issue price also to be announced later, the group said. (The Edge)

Mesiniaga: Bags RM24.2m contract from TNB. Mesiniaga has bagged a contract worth RM24.18m from Tenaga Nasional (TNB). It said the contract shall have commenced on Sept 10, 2020 and is expected to complete by Sept 9, 2022. It said the proposed transaction will have a positive effect on the company’s net assets for the FYE Dec 31, 2020 (FY20). (The Edge)

QES: To raise over RM20m via private placement for factory expansion. QES Group aims to raise RM20.5m from a proposed private placement of up to 10% of its issued share capital. The exercise will see the issuance of up to 75.8m shares at an indicative price of 27 sen per share representing a 6.9% discount to its 5-day volume weighted average market price. The group stated that RM8.2m of the proceeds has been allocated to expand its factory, RM5.3m has been allocated to R&D of future products and RM1.5m will be used for its market expansion into China. (SunBiz)

MAHB: Airports passenger movements fall to 3.3m in latest month. Malaysia Airports Holdings’ (MAHB) network of airports recorded 3.3m passengers in Aug 2020, a decline of 74.4% over Aug 2019. Domestic and international passenger movements recorded 2.8m and 500,000 passengers with a decline of 59% and 91% YoY. (SunBiz)

DNeX: Explores potential partnership in submarine cable biz with Indonesian telco unit. Dagang NeXchange (DNeX)’s unit has inked a preliminary agreement with PT Infrastruktur Telekomunikasi Indonesia (TelkomInfra) to look into establishing a partnership to undertake the business of submarine cable deployment, maintenance and repair within and outside Indonesia. The MoU, DNeX said, will be valid for 12 months. (The Edge)

Market Update

The FBM KLCI might open higher today as US stocks closed up modestly higher Friday, but Wall Street finished a volatile, holiday shortened week sharply lower. The Nasdaq Composite booked its sharpest weekly loss since March 20, during the height of the coronavirus pandemic selling. The Dow Jones Industrial Average rose 131.06 points, or 0.5%, ending at 27,665.64; while the S&P 500 tacked on 1.78 points, or 0.1%, to close at 3,340.97. The Nasdaq Composite Index shed 66.05 points, or 0.6%, finishing at 10,853.55. For the week, the Dow shed 1.7%, while the S&P 500 fell 2.5% and the Nasdaq dropped 4.1%. Markets were closed Monday for Labor Day. In U.S. economic news, the consumer price index for August rose 0.4% last month, beating average economists’ estimates for a rise of 0.3% but falling below the past two months at 0.6%. On a year-over-year basis, the CPI increased 1.3% after gaining 1.0% in July, the Labor Department said on Friday. The Stoxx Europe 600 index rose 0.1%, closing the week up 1.7%, while the U.K.’s benchmark FTSE rose 0.5% Friday and 4% for the week.

Back home last Friday, the FBM KLCI snapped two straight days of losses as glove stocks were back on the uptrend on bargain hunting. The FBM KLCI closed 14.73 points or 0.99% higher at 1,504.85.In the region, Hong Kong’s Hang Seng Index and the Shanghai Composite Index both rose 0.8%, while Japan’s Nikkei rose 0.7%.

Source: PublicInvest Research - 14 Sept 2020

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