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

 

PublicInvest Research Daily - 20 October 2020

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Economy

  • US: Housing market index climbs to new record high in Oct. Homebuilder confidence in the US climbed to another new record high in the month of Oct, according to a report released by the National Association of Home Builders on Monday. The report said the NAHB/Wells Fargo Housing Market Index rose to 85 in Oct from 83 in Sept. Economists had expected the index to come in unchanged. "Traffic remains high and record-low interest rates are keeping demand strong as the concept of 'home' has taken on renewed importance for work, study and other purposes in the Covid era," said NAHB Chairman Chuck Fowke. (RTT)
  • US: Pandemic expected to push poorer Americans out of banking system - regulator. Many poorer Americans will struggle to keep a foothold in the banking system due to economic fallout from the coronavirus pandemic after years of increasing access, a US banking regulator said on Monday. A new report from the Federal Deposit Insurance Corporation (FDIC) found that in 2019 just 5.4% of Americans lacked a checking or savings account, the lowest level recorded by the decade-old survey. (Reuters)
  • EU: Eurozone construction output growth improves. Eurozone construction output rose at a faster pace in Aug after easing in the previous month, data form Eurostat showed on Monday. The construction output increased 2.6% MoM in Aug, following a 0.3% rise in July. Production in building construction gained 2.8% monthly in Sept and civil engineering rose 0.7%. On a YoY basis, the construction output fell 0.9% in Sept, following a 3.4% decline in the prior month. In the EU27, construction output increased 2.4% monthly, and fell 1.5% from the same month a year ago. (RTT)
  • UK: Household finances continue to weaken in Oct. UK household finances remained under severe strain in Oct, survey data published by IHS Markit showed on Monday. The household finance index, which measures households' overall perceptions of financial wellbeing, held steady at 40.8 in Oct. The score was well below the neutral 50.0. Looking ahead, households expect their situation in twelve months to remain relatively gloomy, with the respective forward-looking index still well below the 50.0 threshold. (RTT)
  • UK: Housing market booms through Oct, Rightmove says. A surge in Britain’s housing market pushed up asking prices for homes this month by the most in more than four years, with buyers ready to pay a premium for larger properties after their lockdown experience this year, a survey showed on Monday. Property website Rightmove said asking prices were 5.5% higher than in Oct last year. The average asking price now stands at a record GBP323,530 (USD418,162). In Oct alone, asking prices rose by 1.1% from Sept. “Previous records are tumbling in this extraordinary market, and there are still some legs left in the upwards march of property prices,” Tim Bannister, Rightmove’s director of property data, said. (Reuters)
  • China: 3Q GDP grows 4.9% YoY, misses expectations. China’s economic recovery disappointed in the 3Q, growing 4.9% from a year earlier and missing analyst expectations, data from the National Bureau of Statistics showed on Monday. The growth was slower than the 5.2% forecast by analysts in a Reuters poll, and followed 3.2% growth in the 2Q. The economy grew 0.7% in the first nine months from a year earlier, the data showed. (Reuters)
  • China: Sept industrial output rises 6.9% YoY, retail sales up 3.3%. China’s industrial output in Sept rose 6.9% from a year earlier, data showed on Monday, expanding for the sixth straight month in a boost to an economy recovering from the coronavirus shock. Analysts polled by Reuters had expected annual industrial output growth to have quickened to 5.8% in Sept from a 5.6% gain in Aug, as more businesses resumed production after measures to contain the spread of the virus were lifted. (Reuters)
  • Japan: Sept exports fall 4.9% YoY - MOF. Japan’s exports fell 4.9% in Sept from a year earlier, Ministry of Finance data showed on Monday, dropping at a slower pace than in the previous month as pressure from the coronavirus pandemic eases. That compared with a 2.4% decline expected by economists in a Reuters poll and followed a 14.8% fall in Aug. Imports dropped 17.2% in the year to Sept, compared with the median estimate of an 21.4% decline. (Reuters)

Markets

  • Vortex: To raise up to RM84m via rights issue, private placement. Vortex Consolidated is planning to raise up to RM84.18m via a rights issue and private placement, mainly for repayment of borrowings and working capital. Interestingly, the cash call amount is slightly more than its current market capitalisation of RM83.98m. The proposed rights issue will involve the issuance of up to 370.84m rights shares on the basis of one rights share for every one share held. (The Edge)
  • Tan Chong: Signs MoU for exclusive distributorship in Vietnam. Tan Chong Motor (TCM) has inked a MoU with Xiamen King Long United Automotive Industry Co Ltd to start negotiations to appoint TCM as the sole and exclusive distributor of the King Long Kingo microbus model in Vietnam. The distribution of King Long microbus models will be for both completely built-up and completely knocked-down versions, Tan Chong said. The MoU is to facilitate the expansion of King Long and the group's collaboration in Vietnam with the exclusive distribution of the microbus. (Bernama)
  • Foundpac: Mulls ACE Market listing for Dynamic Stencil. FoundPac said any potential listing of its 75%-owned laser stencil manufacturing subsidiary Dynamic Stencil SB in Malaysia may happen on the ACE Market. The group however qualified that the IPO of Dynamic Stencil is still in its early stages, and that it is exploring all available options with no set timeframe in place. (The Edge)
  • Powerwell: Responds to query over contracts worth RM21.7m. Powerwell Holdings has responded to a letter of query issued by Bursa Malaysia pertaining to the company’s statement over contracts worth RM21.7m since September, with an outstanding book of over RM80m. Powerwell said the contracts secured included works for the LRT 3 project worth RM6.7m, that of Sunway Group (RM3m), CWM Group SB (RM560k), and Trans Resources Corporation SB (RM3.14m). (Bernama)
  • Acme: Says in ‘exploratory stage’ with skymind on AI JV in response to UMA query. Acme said it is exploring a potential JV with Skymind Holdings to produce artificial intelligence (AI) devices and offer AI solutions.In response to an unusual market activity (UMA) query, the company said it will make the necessary announcements upon the signing of any definitive agreement with Skymind. "We wish to inform Bursa that the company is only in the exploratory stage with Skymind for a potential JV to produce AI solutions/devices,” Acme said. (The Edge)
  • Automotive (Neutral): Malaysia’s September vehicle sales up 26% due to promotional activities – MAA. Malaysia’s vehicle sales rose 26.37% YoY to 56,444 units in September, following ongoing promotional activities by car manufacturers. The Malaysian Automotive Association (MAA) said sales were also 7% MoM higher than in August. In addition, September’s sales volume is the second-highest monthly sales figure recorded so far this year. Passenger vehicle sales accounted for 51,422 units sold during the month, while commercial vehicles sales stood at 4,399 units. Year to date (YTD), total vehicle sales stood at 341,489 units, down 22.91% YoY. (The Edge)

MARKET UPDATE

  • The FBM KLCI might open lower today after U.S. stocks slid for the fourth time in the past five days as a deadline on US stimulus talks loomed and coronavirus cases continued to rise. The benchmark S&P 500 closed 1.6% lower on Monday, with roughly nine of every 10 stocks in the index down on the day. The technology-heavy Nasdaq Composite declined 1.7%. Investors are waiting on further news on the progress of a US fiscal stimulus package. Negotiating teams for Nancy Pelosi, the Democratic speaker of the House, and Steven Mnuchin, Treasury secretary, were working “around the clock” to see if they could strike a deal for more fiscal stimulus before the November election. In Europe, continent-wide Stoxx 600 closed down 0.3%, while bourses in London, Frankfurt and Milan all ended the day lower. The retreat came as Covid-19 cases increased in the US and Europe. In recent days, Belgium has imposed new restrictions on bars and restaurants and Wales has rolled out a two-week national lockdown from Friday.

    Back home, the FBM KLCI closed in a positive territory for the first time after three straight sessions of losses, lifted by healthcare stocks, which saw a boost amidst rising Covid-19 cases. The benchmark index ended 14.27 points or 0.99% higher at 1,518.11. Data released by China pointed to its gross domestic product growing 4.9 percent year on year in the third quarter, below expectations for 5.2 percent but ahead of a 3.2 percent increase in the second quarter. Across Asia, markets mostly rose on hopes of a new US coronavirus relief deal before the presidential election. Japan's Nikkei 225 index climbed 1.11%, while South Korea's Kospi rose 0.22%. Hong Kong's Hang Seng rose 0.64% but the Shanghai Composite index fell 0.71%.

Source: PublicInvest Research - 20 Oct 2020

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