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Author: PublicInvest   |   Latest post: Thu, 24 Jun 2021, 9:56 AM

 

PublicInvest Research Headlines - 9 Oct 2020

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Economy

US: Jobless claims worse than expected amid slowdown in hiring. First-time claims for unemployment benefits totalled 840,000 last week, higher than expected in another sign that the spike in job growth over the summer has cooled heading into Election Day. Economists surveyed by Dow Jones had been expecting 825,000 new claims. Though the total was a bit worse than Wall Street expected, it still represented a modest decline from the upwardly revised 849,000 from a week earlier. It also was the lowest level of claims since the virus-induced shutdown in mid-March. However, continuing claims again fell sharply, dropping by just over 1 million to 10.98m, according to the Labor Department release. Continuing claims trail the headline weekly claims number by a week. (CNBC)

EU: German exports continue to expand in Aug . German exports continued to grow in Aug, albeit at a slower pace, and imports growth gained momentum with the recovery in domestic demand, data from Destatis revealed. Exports were up by more than-expected 2.4% in Aug from July. Economists had forecast growth to slow to 1.4% from 4.7% in July. Meanwhile, the MoM increase in imports accelerated to 5.8% from 1.1%. Imports were also forecast to climb 1.4%. As the increase in imports exceeded the exports growth, the trade surplus fell to a seasonally adjusted EUR15.7bn from EUR18bn in July. The expected level was EUR18.2bn. (RTT)

EU: Policymakers saw need for 'free hand' in monetary policy amid high uncertainty . ECB policymakers saw the need for latitude in monetary policy to tackle the difficult economic situation as the outlook remains highly uncertain in the absence of a permanent cure for the coronavirus and political factors such as Brexit transition and US presidential election, minutes of the Sept policy meeting showed. "In the prevailing environment of high uncertainty, keeping a steady hand with respect to monetary policy was seen as most appropriate," the minutes, which the ECB calls "account", of the Sept 9-10 Governing Council meeting showed. "At the same time, the case was made for keeping a "free hand" in view of the elevated uncertainty, underpinning the need to carefully assess all incoming information, including the euro exchange rate, and to maintain flexibility in taking appropriate policy action if and when needed." (RTT)

UK: BoE's Bailey says Britain, EU should reach trade deal . BoE Governor Andrew Bailey said he believed Britain and the EU should be able to reach a trade deal, and that he did not expect the new wave of coronavirus cases to be as damaging as the first. "I do think it is in the interests of both sides - let's be blunt - to get an agreement," he said in an interview with the Yorkshire Post newspaper published. "I'm surprised that the EU wants to restrict where their citizens can do business. We will certainly keep our markets open to the world," he added. Britain's Brexit supremo Michael Gove told parliament on Wed that he saw a two in three chance that the two sides would reach a deal before post-Brexit transition arrangements expire at the end of this year. (Reuters)

Japan: Has JPY2,102.8bn current account surplus in Aug . Japan posted a current account surplus of JPY2,102.8bn in Aug, the Ministry of Finance said - down 1.5% on year. That exceeded expectations for a surplus of JPY1,983.7bn following the JPY1,468.3bn surplus in July. Exports were down 15.5% on year at JPY5.12trn, while imports sank an annual 22.0% to JPY4.711trn. The trade surplus was JPY413bn, up from JPY137.3bn in the previous month. (RTT)

Taiwan: Consumer prices continue to fall . Taiwan's consumer prices declined further in Sept, data from the Directorate-General of Budget, Accounting and Statistics showed. The consumer price index fell 0.58% YoY in Sept, following a 0.33% decrease in Aug. Economists had expected a 0.30% decline. Prices of fuels and lubricants fell 16.49% as the international oil prices plummeted. On a MoM basis, consumer prices fell 0.11% in Sept. Excluding fruits, vegetables and energy, core consumer prices increased 0.24% annually in Sept and fell 0.18% from the previous month. (RTT)

Markets

AirAsia (Underperform, TP: RM0.50): To return planes to lessors, shrink fleet, says CEO. Malaysia's AirAsia Group is looking to slash dozens of planes from its fleet by returning aircraft to lessors, Group CEO Tony Fernandes said on Thursday. "We are not going to buy new planes and we are going to return as many as we can. I estimate by the end of next year we'll be flying 180 planes," Fernandes said. (Reuters)

Bioalpha: Health food ingredients on track for growth in China. Bioalpha Holdings (BHB) is further solidifying its presence in China as it commences delivery of health food ingredients for the preparation of nutritional meals to be distributed to the customers in the Guizhou province in China. The supply contract is valued at CNY700m (RM426.7m) annually for a duration of 5 years, subject to annual renewal. (Business Times)

Tropicana: Issues RM318m in sukuk wakalah to repay borrowings . Tropicana Corp has issued RM318m in Islamic bonds from its RM1.5bn Sukuk Wakalah Programme to repay existing financing or borrowings. The issuance has tenors of three and five years with a senior ranking and security cover of 1.5 times. (The Edge)

MyEG: To provide online payment system for Covid-19 tests for inbound travellers. MY EG Services (MYEG) has received a letter of acceptance from the Ministry of Health to undertake the provision of an online payment system for inbound travellers to pay for Covid-19 screening tests and quarantine charges, prior to their arrival in the country. The project has a tenure of two years, with no fixed value, as it is dependent on the number of transactions and the service options selected by users. (The Edge)

Brite-Tech: To acquire two pieces of land in Klang for RM10m . Brite-Tech’s wholly-owned subsidiary Brite-Tech Corp SB (BCSB) has entered into two sale and purchase agreements to acquire two pieces of land in Kapar, Klang, Selangor, for RM10.2m. It said the acquisitions will be funded via a combination of bank borrowings and internally-generated funds. (The Edge)

Censof: Bags RM7.8m contract from IRB. Censof Holdings has bagged a RM7.8m contract from the Inland Revenue Board for the maintenance of application, hardware and licence renewal for the latter's revenue accounting system, or eRAS. Century Software (Malaysia) SB has accepted the letter of award for the three-year job, from IRB. (The Edge)

Euro Holdings: Proposes 2-for-1 bonus issue. Euro Holdings has proposed a bonus share issuance to reward its shareholders, on the basis of two bonus shares for every one existing share held at an entitlement date to be fixed. The proposed exercise will involve the issuance of 534.6m bonus shares. (The Edge)

IPO: Southern Cable oversubscribed by 10.5 times. Southern Cable Group has received overwhelming response for the public tranche of its IPO on ACE Market. It said its public portion had been oversubscribed by 10.5x. It received a total of 10,308 applications for 459m shares with a total value of RM156.1m. (Business Times)

Market Update

The FBM KLCI might open higher today after US stocks finished higher Thursday, as investors focused on polls showing less uncertainty around November’s presidential election. House Speaker Nancy Pelosi also rejected the idea of a standalone bill to aid the airline industry, saying such a measure would need to be part of a broader fiscal stimulus package. The Dow Jones Industrial Average closed up 122.05 points, or 0.4%, at 28,425.51, while the S&P 500 rose 27.38 points, or 0.8%, to finish at 3,446.83. The Nasdaq Composite added 0.5%, or 56.38 points, ending at 11,420.98. All three major equity benchmarks ended at their highest levels in five weeks. Meanwhile, initial jobless claims filed through state programs slipped to 840,000 in the week ended Oct. 3 from a revised 849,000 in the prior week, the Labour Department reported. The slowing decline of the number of Americans who applied for jobless benefits could be a sign the labour market is experiencing a setback amid another wave of corporate layoffs. The pan-European Stoxx 600 Europe index rose 0.8%, while London’s FTSE 100 gained 0.6%.

Back home, the FBM KLCI finished up 29.87 points or 2.01% at its intraday high of 1,519.43 after a final hour spike on bargain hunting and institutional support and as crude palm oil (CPO) prices rose with crude oil prices. In the region, the Nikkei 225 gained 0.96%, while the Hang Seng lost 0.2%.

Source: PublicInvest Research - 9 Oct 2020

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