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Author: PublicInvest   |   Latest post: Fri, 4 Dec 2020, 10:06 AM

 

PublicInvest Research Headlines - 8 Oct 2020

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Economy

US: Fed officials worried that lack of help from Congress will threaten recovery, minutes show . Fed officials worried that a lack of further fiscal stimulus would jeopardize and economy recovery that was moving faster than expected, according to minutes released from the central bank’s Sept meeting. The Fed’s policymaking arm held interest rates steady at the meeting and approved language outlining its new approach to inflation. The minutes described the recovery in GDP at that point as being “rapid.” The meeting featured extensive discussion about the economic outlook, as members said the economy was doing better than expected in good part because of the fiscal help provided by Washington. (CNBC)

UK: House prices jump most since 2016 in post-lockdown boom. UK house prices rose at their strongest annual pace since 2016 last month as Britons’ changing work patterns and a tax reduction on purchases fanned a resurgence. Average house prices rose 7.3% in Sept from a year earlier to a record average of GBP249,870 (USD323,000), mortgage lender Halifax said. On the month alone, prices gained 1.6%. Since the lockdown started to be eased in May, a wave of buyers have sought to sell up in urban areas such as London to move to places with bigger yards and more green space. They’ve been helped by a temporary tax break on home purchases that will expire next year. Prime Minister Boris Johnson signalled more support for the market this week, with a promise of more generous home loans for millions of young first time buyers. (Bloomberg)

UK: Plans to quit Brexit talks if no deal clear next week — source. Brexit negotiations are at risk of breaking down within days after the UK government warned it will pull out of trade talks with the EU if there is no clear deal in sight next week. Boris Johnson has said he wants the outlines of a deal to be clear by Oct 15. EU officials, however, have said they won’t be pressured into making concessions and are prepared to call the prime minister’s bluff if he doesn’t compromise, effectively daring Johnson to walk away. A person familiar with the British position said Johnson’s team would indeed pull the plug on talks if no clear landing zone for a deal has been identified by that date. (Bloomberg)

Singapore: Economic decline seen slowing in 3Q, central bank on hold . Singapore’s economic decline is expected to have slowed significantly in the 3Q as the city-state loosened coronavirus curbs, giving the central bank room to keep monetary settings unchanged when it meets next week. GDP is expected to contract 6.8% from the same period a year earlier, according to the median forecast of 11 economists in a Reuters poll, marking the third straight quarter of decline. The economy had shrunk 13.2% in April-June - its worst performance on record as the country went into lockdown. All 14 economists polled by Reuters forecast the Monetary Authority of Singapore (MAS) will keep its exchange-rate based policy on hold at its review on Oct. 14. (Reuters)

Japan: Budget requests hit record USD997bn, fuelled by pandemic spending . Japan's ministries have asked for a record USD997bn in initial budget for the next fiscal year, the finance ministry said, as Prime Minister Yoshihide Suga's new government juggles the need to rein in the pandemic and revive the economy. The general account spending requests for the fiscal year that begins next April totalled JPY105.4071trn (USD996.85bn), exceeding the previous high of JPY105trn sought for the current year. The amount got a boost from demand related to urgent steps to contain the virus spread and ease the pain from the economic fallout, which triggered the deepest recession on record. (Reuters)

South Korea: Posts USD6.57bn current account surplus in Aug . South Korea saw a current account surplus of USD6.57bn in Aug, the Bank of Korea said- down from USD7.45bn in July. The goods account surplus widened to USD7.01bn, compared to the USD4.63bn figure in Aug 2019. The services account deficit decreased to USD0.80bn, from USD1.56bn in August last year, owing to an improvement in the travel account. The primary income account surplus narrowed from USD2.02bn the year previously to USD0.63bn in Aug of this year, in line with a decrease in the income on equity. (RTT)

Hong Kong: Private sector PMI climbs to 47.7 in Sept - IHS Markit . The private sector in Hong Kong continued to contract in Sept, albeit at a slower pace, the latest survey from IHS Markit showed with a PMI score of 47.7. That's up from 44.0, although it remains beneath the boom-or-bust line of 50 that separates expansion from contraction. (RTT)

Markets

Sapura Energy (Neutral, TP: RM0.10): Says no director or employee under investigation by the authorities in Brazil. Sapura Energy says no director or employee of the company is under investigation by the authorities in Brazil. Clarifying several media reports mentioning it in the "Operation Car Wash" probe there, Sapura Energy said a search and seizure warrant had been issued by the 13th Federal Court of Curitiba, Brazil on two accused persons. Neither of them were employees or directors of the company. (Business Times)

Bina Puri: JV bags RM1bn contract in Thailand . Bina Puri Holdings, through its JV, SPTK JV Company Ltd, has bagged a contract package worth THB7.75bn (RM1.04bn) for the high speed railway project in Thailand. "With the latest contract, the group's unbuilt book order stands at RM1.9bn as at to date," Bina Puri said. (Business Times)

TCS: Win RM323m Mah Sing job. TCS Group Holdings has secured a RM323m contract for main building works of the M Arisa development. TCS said its wholly-owned TCS Construction SB had secured the contract from Cosmowealth Housing Development SB, a subsidiary of Mah Sing Group. The overall duration of the contract is 36 months commencing from the date of site possessions. (Business Times)

Sunsuria: To raise up to RM500m via sukuk issuance . Sunsuria plans to issue up to RM500m worth of Islamic medium terms notes or sukuk wakalah. The tenure will be up to 30 years, adding that the programme has been assigned a preliminary rating of A+IS with a stable outlook by Malaysian Rating Corp. The proceeds raised from the sukuk will be used to finance capex, working capital requirements and investments, as well as for general corporate purposes. It will also be used to refinance the existing borrowings and future financing of the group, it added. (The Edge)

K-One: Gets shot in the arm with syringe safety needle caps deal. K-One Technology, via K-One MediTech SB, has signed a licence agreement with Star Syringe Ltd based in the UK to manufacture syringe safety needle caps (K4 Products) on an exclusive basis in Malaysia and distribute it worldwide on a non exclusive basis. Manufacturing is expected to start by end 1Q 2021, with the cost estimated at RM6m. (SunBiz)

Kerjaya Prospek Property: Buys land in Old Klang Road to complement existing project. Kerjaya Prospek Property is buying a piece of vacant freehold land measuring 50,482 sq ft or 0.469 hectare in Kuala Lumpur for RM10m in cash. It said the land will complement its existing Bloomsvale mixed development in Old Klang Road and will be funded via internal funds or bank borrowings. The acquisition is expected to be completed in Dec. (The Edge)

Trive Property: Plans another cash call to fund acquisition and pare down term loan. Trive Property Group intends to raise up to RM63.8m through a rights issue with warrants, mainly to fund the acquisition of the remaining 40% stake in a subsidiary and to repay its term loan. It said it is acquiring the remaining 40% equity interest in Avenue Escapade SB (AESB) from Ong Kah Hoe and Ong Kah Wee for RM9.9m. Subject to all relevant approvals being obtained, the proposals are expected to be completed by the 1Q of 2021. (The Edge)

Market Update

The FBM KLCI might open higher today tracking US stocks which finished higher Wednesday after President Donald Trump signaled late Tuesday that he was open to a number of separate fiscal stimulus measures, only hours after calling off talks with congressional Democrats on a relief package until after the November election. At the same time, investors said they were looking past the current legislative wrangling in Washington, eyeing the year ahead when the passage of a stimulus package to support the economic recovery and a working vaccine was more likely. The Dow Jones Industrial Average rose 530.7 points, or 1.9%, to 28,303.46, while the S&P 500 was up 58.5 points, or 1.7%, to finish at 3,419.45. The Nasdaq Composite gained 210 points, or 1.9%, at 11,364.60. The pan-European Stoxx 600 Europe was 0.1% lower, and London’s FTSE 100 was up 0.1%.

Back home, the FBM KLCI fell 1.31% against the backdrop of higher Covid-19 cases, new infection clusters, as well as declines in crude oil prices, despite the generally positive sentiment in the regional markets. At 5pm, the benchmark index fell 19.91 points or 1.31% to close at 1,489.56 points, marking its second consecutive day of decline. In the region, Hong Kong’s Hang Seng Index rose 1.1%, while Japan’s Nikkei 225 closed fractionally lower.

Source: PublicInvest Research - 8 Oct 2020

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