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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 23 Oct 2020, 9:35 AM

 

PublicInvest Research Headlines - 22 Sept 2020

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Economy

EU: ECB’s Lagarde says stimulus can be ramped up amid uncertainty. ECB President Christine Lagarde reiterated a vow to ramp up monetary stimulus again if needed as the euro area’s recovery from the coronavirus recession remains uncertain. She said while the third quarter will see a rebound, the situation is still “uneven and incomplete.” “The uncertainty of the current environment requires a very careful assessment of the incoming information, including developments in the exchange rate, with regard to its implications for the medium-term inflation outlook,” Lagarde told. “The Governing Council continues to stand ready to adjust all of its instruments, as appropriate.” (Bloomberg)

UK: Household finances continue to deteriorate in Sept. UK households' perception about the financial well-being showed another sharp fall in Sept but this was less severe than the fall logged at the height of the covid-19 pandemic, survey data published by IHS Markit showed. The household finance index remained unchanged at 40.8 in September. Households' perceptions of their finances in 12 months' time weakened in September, with the respective index reaching the lowest since May. Spending decreased moderately though the reduction was the weakest in the current six-month sequence of falls. Amid lower disposable incomes, household savings were again depleted in Sept. (RTT)

UK: House prices rise most in 4 years – Rightmove. UK house prices increased at the fastest pace in four years in Sept driven by higher demand for larger homes, data published by the property website Rightmove showed. House price inflation advanced to 5% from 4.6% in August. This was the fastest growth since Sept 2016. House prices gained 0.2% MoM in Sept, reversing a 0.2% drop in August. Data showed that the trend of up-sizing to a larger home has continued at pace over the past month, leading to record asking prices in the second-stepper sector, made up of three- or four bedroom homes. "Needing more space has always been the most popular reason for moving house, but now there's a new urgency for extra space to be able to work from home, which means that there are different sets of buyers competing for the same type of property," Tim Bannister, Rightmove's Director of Property Data, said. National sales agreed for the whole year to date were down just 5% YoY. (RTT)

UK: Manufacturers see no scope for ‘V’-shape recovery – Make UK/BDO Survey. UK manufacturers downgraded their outlook for next year as they see no evidence of a V-shaped recovery from the coronavirus-driven pandemic, according to a survey conducted by Make UK and business advisory firm BDO released. Despite improvements in output and orders from record lows, manufacturers reduced their investment plans, the manufacturing outlook survey showed. The balance on investment intentions fell to -32% in the third quarter from -26% in the last quarter. The balance on output improved to -36% from -56% in the last quarter which was the lowest balance on record in the 30-year survey history. Meanwhile, the employment balance weakened since the last quarter, falling to - 29% from -22%. (RTT)

China: Keeps benchmark rates on hold. China retained its benchmark rates for the fifth straight month as the economy continued to log robust recovery from the downturn caused by the coronavirus pandemic. The one-year loan prime rate was retained at 3.85% and the five-year loan prime rate was maintained at 4.65%. The one-year and five-year loan prime rates were last reduced in April. The one-year loan prime rate was lowered by 20bps and five-year rate by 10bps in April. The interest rates were expected to be retained today as the rate on its medium-term lending facility or MLF, which serves as a guide for the LPR, was maintained early this month. The loan prime rate is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. This new lending rate replaced the central bank's traditional benchmark lending rate in August 2019. (RTT)

Hong Kong: Consumer prices fall for second month. Hong Kong's consumer price declined for the second straight month in August, data from the Census and Statistics Department showed. The consumer price index fell 0.4% YoY in August, following a 2.3% decrease in July. The smaller annual fall in prices was mainly due to the effect of the Government's payment of public housing rentals and waiver of two-thirds of rent for tenants of in some housing estates in July dissipated in August, the agency said. Excluding the effects of all government's one-off relief measures, core inflation was 0.1% in August versus 0.2% in the previous month. The underlying consumer price inflation rate edged down further as economic conditions remained weak amid the third wave of the coronavirus, a government spokesman said. "Prices of meals bought away from home saw a slightly larger year-on-year decline, while price pressures on many other major CPI components receded further," spokesman added. (Bloomberg)

Markets

Sapura Energy (Neutral, TP: RM0.10): Tan Sri Shahril to pass baton in March 2021. Sapura Energy’s president and CEO Tan Sri Shahril Shamsuddin will retire from his posts upon turning 60 in March next year. Tts board has appointed Datuk Mohd Anuar Taib as its COO and CEO designate effective next month, as part of a six-month transition. (The Edge)

QES Group: To acquire factory in Shah Alam for RM21m . QES Group has entered into a sale and purchase agreement with Astronautic Technology (M) SB for the acquisition of a five storey factory in Hicom Glenmarie Industrial Park, Shah Alam, via its wholly owned subsidiary QES (Asia-Pacific) SB for a cash consideration of RM21m. The proposed acquisition will be financed with internally generated funds and/or bank borrowings. Barring any unforeseen circumstances, it is expected to be completed within three months.(SunBiz)

Scientex: Strengthens presence in Johor with RM185m landbank acquisition in Pulai. Scientex is strengthening its presence in Malaysia’s affordable housing development market through its 202.2-acre land acquisition in Pulai, Johor, for RM185m. The group plans to launch a mixed development project on the new site, whose GDV is yet to be determined. (SunBiz)

Supermax: Buys Bukit Raja land for RM73.5m for subsidiary's HQ. Supermax Corp is aquiring two pieces of land from SP Setia's subsidiary, Bandar Setia Alam SB, to build an operations headquarters for its wholly-owned unit Maxter Glove Manufacturing SB. It said it had entered into a sale and purchase agreement with Bandar Setia Alam to buy the land for RM73.5m. (Business Times)

Green Packet, MMAG: Partners to venture into foreign worker e-wallet. Green Packet has teamed up with MMAG Holdings to set up a digital payment system for migrant workers. The tenure of the master agreement is two years (24 months), and will be renewed for successive periods of one year (12 months) each. (The Edge)

Leweko: To preserve funds for construction by making cash call . Leweko Resources' proposed rights issue will allow the company to preserve funds for its construction division. It said the proposed exercise was expected to raise up to RM16.5m based on an indicative issue price of 9 sen per rights share. (Bernama)

Jade Marvel: Plans to develop RM25m residential project in Penang. Jade Marvel Group plans to build a residential housing project in Penang with a GDV of up to RM25m. Great Marvel SB (GMSB), has inked a JV agreement (JVA) with JSC Land SB to develop a 1.31-hectare freehold land owned by GMSB in Simpang Ampat. (Bernama)

Bintai Kinden: To be licensee of Covid-19 vaccine compounds in Malaysia. Bintai Kinden Corp has entered into a licensing agreement with US-based firm Generex Biotechnology Corp for Covid-19 vaccine compounds in Malaysia. It will hold the exclusive licence in Malaysia when it comes to the commercialization and development of compounds and research information in the country when it comes to a Covid-19 vaccine. (The Edge)

Market Update

The FBM KLCI might end with a negative note today as US stocks suffered a sharp selloff on Monday but avoided a much uglier loss for the main benchmarks, as investors contended with the COVID- 19 trajectory in Europe and a lack of progress toward another round of fiscal stimulus out of Washington. Major global banks also faced pressure, after weekend news reports claimed that lenders continued doing business with customers suspected of illicit activity and wrongdoing. The Dow Jones Industrial Average fell 509.72 points, or 1.8%, to close at 27,147.70, well off its low for the session at 26,715.15. The technology-laden Nasdaq Composite staged an amazing turnaround, ending with a relatively meager 14.48-point decline, or 0.1%, to close at 10,778.80, after seeing an intraday nadir at 10,519.49. The S&P 500 slipped 38.41 points, or 1.2%, to 3,281.06. The Stoxx Europe 600 Index dropped 3.2%, while the UK’s benchmark FTSE fell 3.4%.

Back home, the FBM KLCI finished 7.2 points or 0.48% lower at 1,499.43 as Asian equity indices alongside US stock futures amid rising number of global Covid-19 infections leading to world economic growth concerns. In the region, Hong Kong’s Hang Seng Index fell 2.1% and the Shanghai Composite Index fell 0.6%, while Japan’s Nikkei was closed for a public holiday.

Source: PublicInvest Research - 22 Sept 2020

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