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PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 23 Nov 2020, 11:55 AM

 

PublicInvest Research Headlines - 5 Oct 2020

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Economy

US: Consumer sentiment improves more than initially estimated in Sept . Revised data released by the University of Michigan showed consumer sentiment in the US improve by more than previously estimated in the month of Sept. The report said the consumer sentiment index for Sept was upwardly revised to 80.4 from the preliminary reading of 78.9. Economists had expected the index to be upwardly revised to 79.0. With the bigger than expected upward revision, the consumer sentiment index is well above the final Aug reading of 74.1. (RTT)

US: Factory orders miss expectations; business spending improving . New orders for US-made goods increased less than expected in Aug, though business spending on equipment appeared to be recovering, which likely supported the economy in the 3Q. The Commerce Department said that factory orders rose 0.7% after accelerating 6.5% in July. Economists polled by Reuters had forecast factory orders would increase 1.0% in Aug. (Reuters)

EU: Inflation remains negative for second month . Eurozone consumer prices declined for the second straight month in Sept adding pressure on the ECB to add stimulus and kick start the economy from the coronavirus driven downturn. Consumer prices decreased 0.3% on a yearly basis, following a 0.2% drop in Aug, flash data from Eurostat showed. A similar lower rate was last seen in April 2016. Prices were expected to fall again by 0.2% in Sept. (RTT)

EU: Brexit negotiators brace for a summit showdown as talks lurch on. The stage is set for a showdown on Brexit at a EU summit. French President Emmanuel Macron’s reluctance to make concessions on fish is stirring concern among officials he could sink efforts to reach a wider trade accord as negotiators begin on Monday a two-week period of intense talks. That follows Saturday’s call between Boris Johnson and European Commission President Ursula von der Leyen. The two sides are nervous that major compromises on the key disagreements of fishing rights and state aid are still to be made, officials said. (Bloomberg)

Japan: Consumer confidence at 7-month high . Japan's consumer confidence improved to the highest level in seven months in Sept, data from the Cabinet Office showed. On a seasonally adjusted basis, the consumer confidence index increased to 32.7 in Sept from 29.3 in Aug. Among the four sub-indexes of the consumer confidence index, the index reflecting households' willingness to buy durable consumer goods rose to 34.9 in Sept, and the index for overall livelihood increased to 35.1. The indicators measuring the income growth increased to 34.8 and employment grew to 26.0. The latest survey was conducted on September 15 among 8,400 households. (RTT)

Australia: Services PMI Swings To Expansion - IHS Markit. The services sector in Australia moved into expansion territory in Sept, the latest survey from IHS Markit showed with a seasonally adjusted services PMI score of 50.8. That's up from 49.0 in Aug and it moves above the boom-or-bust line of 50 that separates expansion from contraction. Individually, new business inflows rose last month, but employment shrank further amid spare capacity. Business sentiment improved. (RTT)

Markets

Malakoff (Trading Buy, TP: RM1.06): Announces resignation of CEO . Malakoff Corp has announced the resignation of its CEO Datuk Ahmad Fuaad Mohd Kenali, effective Oct 31, 2020. It said Ahmad Fuaad will relinquish from his current post to pursue other career opportunities. (Business Times)

Icon Offshore: To buy rig for USD41.7m. Icon Offshore has signed a deal to buy a rig from a wholly-owned unit of Perisai Petroleum Teknologi for USD41.8m. The group said it is purchasing the Perisai Pacific 101 jack-up rig from Perisai Petroleum Teknologi SB (PPTB). Icon also to acquire 51% in the latter’s unit Perisai Offshore SB for RM1m or USD255,500. Icon is also buying intellectual property from PPTB’s Perisai Drilling SB for RM2.1m or USD500,000. In total, the group will be spending USD42.5m or RM177m on the deal. Icon said the acquisitions will be funded partly from the proceeds of its rights issue with warrants and also from new borrowings. (The Edge)

Gagasan Nadi: Bags another project in Serendah with RM375m GDV. Gagasan Nadi Cergas has bagged another project in Serendah, Selangor with a GDV of up to RM374.9m. The development will be funded by a combination of internallygenerated funds and bank financing, the exact mix of which will be determined later, the group said. However, no contract value was disclosed. Under the agreement, PNSB will be entitled to receive 15.5% of the GDV or a minimum guaranteed development rights value of up to RM58.1m over the development period of nine years. (The Edge)

Sunsuria: Ventures into 2 KL high-rise projects. Sunsuria has entered into two agreements to venture into the development of a high-rise residential project in Bangsar @ Lorong Maarof and a high-rise mixed commercial project along Lorong Tuanku Abdul Rahman in Kuala Lumpur. Under a conditional shares subscription and shareholders’ agreement (SSSA), Sunsuria will acquire a 51% stake in property developer BHP Development for RM8.4m. (SunBiz)

DutaLand: Unit gets money lending licence from Housing Ministry . DutaLand’s wholly-owned subsidiary has obtained a money lending licence. The group said its unit Sea Resorts Development SB (SRDSB) had obtained a money lending licence, valid from Sept 21, 2020, from the Ministry of Housing and Local Government (KPKT) under the Moneylenders Act 1951 and Moneylenders (Control and Licensing) Regulations 2003. The license will be valid for two years and is renewable upon expiry. (The Edge)

Pelangi: To be taken private via capital repayment of 36.5 sen. Pelangi Publishing Group’s controlling shareholders have proposed to the board to undertake a capital repayment scheme in order to privatise the school textbook publication firm. The controlling shareholder, Datuk Sum Kown Cheek, has written to Pelangi’s BOD to notify his intention to take the company private via capital repayment of 36.5 sen per share. (The Edge)

Market Update

The FBM KLCI might open weaker today after US stock indexes ended lower Friday in choppy trade as investors reacted to a weaker-than-expected September jobs report and news that President Donald Trump and first lady Melania Trump had tested positive for the coronavirus. The president and his wife will need to quarantine as the presidential election campaign enters its final weeks. The diagnosis also overshadows negotiations in Congress for another round of fiscal stimulus to combat the economic effects of the pandemic. The Dow Jones Industrial Average shed 134.09 points, 0.5%, to close near 27,682.81, while the S&P 500 index lost 32.36 points, or 1%, closing at 3,348.44. The Nasdaq Composite Index slumped 251.49 points, or 2.2%, to reach 11,075.02. The US economy created 661,000 new jobs in September and the unemployment rate fell again to 7.9% to the lowest level of the pandemic, but the gain in hiring was the smallest since businesses reopened after lockdowns earlier this year and pointed to deceleration in the economic recovery. The decline in the unemployment rate mostly reflected 700,000 people exiting the labor force because of a scarcity of new jobs. About 12 million jobs have been recovered since the mid-March economic shutdown that saw about 22 million layoffs. In Europe, the Stoxx Europe 600 index closed 0.3% higher, at 362.69, while the UK’s FTSE 100 gained 0.4% to close at 5902.12.

Back home, the FBM KLCI posted a minor gain after being lifted by rubber glove stocks Top Glove Corp Bhd and Hartalega Holdings Bhd. At market close, the benchmark index was up 3.53 points or 0.24% at 1,500.33. Elsewhere in Asia, the Shanghai Composite was down 0.2% or 6.31 points to 3,218.05, Hong Kong’s Hang Seng fell 0.79% or 183.52 points to 23,459.05, Japan’s Nikkei 225 dropped 0.67% or 155.22 points at 23,029.90, and Singapore’s Straits Times Index 0.33% or 8.16 points lower at 2,492.58. South Korea’s Kospi managed to rise 0.86% or 19.81 points to 2,327.89.

Source: PublicInvest Research - 5 Oct 2020

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