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PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 25 Nov 2020, 10:24 AM

 

PublicInvest Research Headlines - 16 Oct 2020

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Economy

  • US: Import prices rise 0.3% in September, in line with estimates. A report released by the Labor Department showed import prices in the US increased in line with economist estimates in September. The Labor Department said import prices rose by 0.3% in September after jumping by an upwardly revised 1.0% in August. Economists had expected import prices to rise by 0.3% compared to the 0.9% increase originally reported for the previous month. The uptick in import prices came despite a sharp pullback in prices for fuel imports, which tumbled by 2.9% in Sept after surging up by 3.9% in Aug. Prices for non-fuel imports advanced by 0.6% in September after climbing by 0.7% in Aug. (RTT)
  • US: Weekly jobless claims unexpectedly climb to 898k. Firsttime claims for US unemployment benefits unexpectedly increased in the week ended October 10th, according to a report released by the Labor Department. The report said initial jobless claims climbed to 898k, an increase of 53k from the previous week's revised level of 845k. Economists had expected jobless claims to edge down to 825k from the 840k originally reported for the previous week. With the unexpected increase, jobless claims reached their highest level since topping 1m in the week ended August 22nd. (RTT)
  • UK: Lenders expect loan defaults to rise in Q4. British lenders expect loan defaults to rise in 4Q, according to Credit Conditions Survey from the BoE. Lenders reported that the default rates on secured loans to households remained unchanged in the 3Q but was expected to increase in the 4Q. At the same time, default rates for total unsecured lending decreased in 3Q but were forecast to climb in the quarter ahead. Defaults rates on loans to corporates remained unchanged for small businesses in the 3Q but increased for medium and large businesses. These balances were expected to increase for all business sizes in the 4Q. (RTT)
  • China: Inflation struggles to perk up despite broader recovery. China’s factory gate prices fell at a faster-than-expected pace in September and consumer inflation slowed to its weakest in 19 months, underscoring the challenges still facing China as it recovers from the COVID-19 pandemic. The producer price index (PPI) fell for an eighth straight month on an annual basis while consumer prices grew more slowly than expected. China has seen a steady recovery after being hard hit by the coronavirus in 1Q. But a sustained fall in producer prices, seen as a gauge of industrial demand, may rekindle worries about deflation and prompt authorities to provide more support. (Reuters)
  • ASEAN: Millions of middle-class Southeast Asians are falling into poverty. As the coronavirus pandemic derails economies worldwide, many of the newly poor will come from Southeast Asia, dealing a huge setback to a region that had been prospering from a surging middle class. The job losses are pausing the outsized boom Southeast Asia has experienced in recent years, with economies possibly taking years to fully recover. In the Philippines, a survey by the World Bank and local agencies showed almost half of shuttered businesses were unsure when they could reopen. (Bloomberg)
  • Singapore: Home sales rise to highest in more than 2 years. Singapore home sales rose to the highest in more than 2 years in Sept on the back of low interest rates and government stimulus cushioning the economic fallout from the coronavirus pandemic. Unit sales jumped 5.6% to 1,329 last month, the highest since July 2018, Urban Redevelopment Authority data showed. The figures show Singapore’s property market is weathering the city’s worst recession after a two-month lockdown to combat the coronavirus. To cushion the economic fallout, the government unleashed more than SGD100bn (USD73bn) of stimulus. (Bloomberg)
  • Indonesia: Sept exports, imports beat forecasts. Indonesia's exports and imports fell in Sept at a slower-than-expected pace, while the trade surplus widened, signalling improving global demand. Exports were down just 0.51% on an annual basis to USD14.01bn, data from the statistics bureau showed, beating a Reuters poll forecast for a fall of 7.20%, on support from shipments of farm products. Imports fell 18.88% to USD11.57bn, less than a tumble of 22.40% expected by the poll. (Reuters)

Markets

  • Mah Sing: To diversify into glove manufacturing by Q2 2021. Mah Sing Group plans to diversify into healthcare by venturing into glove manufacturing via indirect wholly-owned subsidiary Mah Sing Healthcare SB. Mah Sing said the new venture is part of the group’s plan to expand its manufacturing division by venturing into the healthcare sector, leveraging on its experience as a plastics manufacturer and is supported by potential synergies to be derived among the group’s glove, plastic and property business. Founder and group managing director Tan Sri Leong Hoy Kum said Mah Sing Healthcare will be converting a warehouse in Kapar, Klang, into its first glove manufacturing factory. “With a built-up of approximately 228,800 square feet, Phase 1 of the factory could house 12 new production lines with a maximum capacity of up to 3.68bn pieces of gloves per annum -- at a speed of 38,000 pieces of gloves per production line per hour,” he said. (Bernama)
  • FGV: In talks with CBP to seek clarification on WRO. The board of directors of FGV Holdings has communicated with the US Customs and Border Protection (CBP) to seek clarification on the findings of its investigation and on steps expected to be taken by FGV for the revocation of the withhold release order (WRO). In a filing with Bursa Malaysia, it said the information around the CBP’s investigation findings is imperative to enable FGV to address and resolve any remaining gaps in its practices. "A conference call between FGV and the CBP was held on Oct 8, 2020. However, the CBP could not reveal any information about its findings except that its research had identified the 11 International Labour Organisation indicators of forced labour in FGV’s practices.” (Bernama)
  • EcoFirst: To extend Klang Valley footprint via Shah Alam landbank acquisition. EcoFirst Consolidated intends to expand its footprint in Klang Valley by acquiring a 4.76-acre leasehold landbank in Shah Alam for RM42m. The group is planning to launch a RM311m GDV mixed development in Cahaya SPK, Shah Alam on the said land. (SunBiz) § AWC: JV wins maiden water infrastructure project in Sarawak. AWC and its partners have secured a water infrastructure project in Sarawak worth RM7.33m from Real Teamtrade SB. AWC's unit, DD Techniche SB inked a JV agreement with Techkem Utilities SB and Techkem Resources SB in July 2020 to formally explore and finance water related opportunities in Malaysia and the ASEAN region. The JV will supply and install mechanical as well as electrical works for a water treatment plant. (Bernama)
  • Powerwell: Order book rises to RM80m with new jobs. Powerwell Holdings outstanding order book has risen to RM80m after the firm secured new jobs. Powerwell said its unit Kejuruteraan Powerwell SB had accepted two letters of intent from Sunway Group for contracts totalling RM9.1m. (The Edge)
  • IPO: ACE Market-bound Econframe IPO's public portion oversubscribed by 40.2 times. En route to list on the ACE Market of Bursa Malaysia, door system solution provider Econframe’s IPO of 16.25m shares for the Malaysian public have been oversubscribed by 40.23 times. Econframe said the group’s listing exercise entails a public issue of 65m new shares and an offer for sale of up to 32.5m existing shares at an issue price of 28 sen per share. (The Edge)

MARKET UPDATE

  • The FBM KLCI might open weaker today after US stocks finished well off session lows but ended with losses for a third day on Thursday, as rising coronavirus cases, especially in Europe, resulted in new restrictions on businesses and travel. Investor sentiment also took a hit following a rise in weekly US jobless claims and a lack of progress in Congress on another fiscal stimulus bill which is now unlikely until after the November elections. The Dow Jones Industrial Average fell 19.80 points, or 0.1%, to 28,494.2, but well off its intraday nadir of 28,181.54; the S&P 500 index was down 5.33 points to end at 3,483.34, a drop of 0.2%, while the Nasdaq Composite Index slumped by 0.5%, a fall of 54.86 points to 11,713.8. In Europe, the pan-European Stoxx 600 fell 2.1% and London’s FTSE 100 slumped 1.7%.

    Back home, the FBM KLCI closed 9.3 points or 0.61% lower at 1,513.95 with Asian stock indices as the global resurgence of Covid-19 cases weighed down on investor sentiment. Across Bursa Malaysia at 5pm, trading volume stood at 6.29bn securities worth RM4.74bn. There were 593 decliners and 431 gainers as investors also closely watched Malaysian political updates. In the region, Hong Kong’s Hang Seng Index closed 2.1% lower, Japan’s Nikkei 225 fell 0.5% and China's Shanghai Composite dropped 0.26%.

Source: PublicInvest Research - 16 Oct 2020

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