PublicInvest Research

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


PublicInvest Research Headlines - 30 Oct 2020

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US: Economy posts record growth in 3Q, COVID-19 scarring to last. The US economy grew at a historic pace in the 3Q as the government injected more than USD3trn worth of pandemic relief which fueled consumer spending, but the deep scars from the COVID-19 recession could take a year or more to heal. The rebound in GDP of 33.1% followed a 31.4% rate of contraction in the 2Q, the deepest since the government started keeping records in 1947. On a YoY basis GDP jumped 7.4% last quarter after sinking 9.0% in the April-June period. (Reuters)

US: Weekly jobless claims drop to lowest level since March. First-time claims for US unemployment benefits fell to their lowest level since before the coronavirus-induced lockdowns in the week ended Oct 24th, according to a report released by the Labor Department. The report said initial jobless claims dropped to 751,000, a decrease of 40,000 from the previous week's revised level of 791,000. Economists had expected jobless claims to dip to 775,000 from the 787,000 originally reported for the previous week. (RTT)

US: Pending home sales unexpectedly pull back off record high in Sept. Pending home sales unexpectedly pulled back off a record high in the month of Sept, according to a report released by the National Association of Realtors. NAR said its pending home sales index slumped by 2.2% to 130.0 in Sept after spiking by 8.8% to 132.9 in Aug. Despite the unexpected monthly decrease, pending home sales in Sept were up by 20.5% compared to the same month a year ago. (RTT)

EU: ECB signals Dec move. European Central Bank left its key interest rates and massive stimulus unchanged, citing a highly uncertain outlook amid a resurgence in the Covid-19 pandemic, and hinted at a move in Dec when the latest set of macroeconomic projections will be available. The Governing Council, led by ECB President Christine Lagarde, left the main refi rate unchanged at a record low 0% and the deposit rate was kept at -0.50%, in line with economists' expectations. The lending rate was left unchanged at 0.25%. (RTT)

EU: German unemployment falls sharply before partial lockdown. German unemployment fell much more than expected in Oct and demand for job protection schemes kept declining as the labour market in Europe’s largest economy continued to recover from the first wave of the coronavirus pandemic. The surprisingly strong data suggested household spending should support growth in the 4Q. The number of people out of work fell by 35,000 in seasonally adjusted terms to 2.863m, far more than a 5,000-drop forecast in a poll. (Reuters)

EU: Consumer prices fall for second month. Germany's consumer prices declined for the second straight month in Oct largely due to the reduction in the value added tax, preliminary data from Destatis showed. Consumer prices fell 0.2% on year, the same rate of decrease as seen in Sept. Economists had forecast an annual decrease of 0.3%. MoM, the CPI edged up 0.1%, in contrast to 0.1% fall economists had forecast. Prices had decreased 0.2% in Sept. The harmonized index of consumer prices slid 0.5% annually, following a 0.4% drop last month. (RTT)

UK: Mortgage approvals hit 13-year high, consumer lending slides. British lenders approved the highest number of mortgages since Sept 2007 last month, unexpectedly extending a post lockdown surge, but there was a record drop in unsecured lending to consumers, Bank of England data showed. Mortgage approvals for house purchase jumped to 91,454 in Sept from Aug’s already high reading of 85,530, exceeding all forecasts in a poll of economists that had instead pointed to a decline. (Reuters)

UK: Sept car production lowest in 25 years, industry says. Britain’s car manufacturing industry had its weakest Sept in 25 years due to a slump in the number of vehicles exported to the US. Factories produced 114,732 cars last month, 5.0% fewer than in Sept 2019 as the sector struggled to recover from the COVID lockdown, the Society of Motor Manufacturers and Traders (SMMT) said. British car production this year is on track to fall below 1m vehicles for the first time since 1999, after a near-complete shutdown in April and May. (Reuters)

Japan: BOJ trims growth, price forecasts, keeps policy steady. The Bank of Japan trimmed its economic and price forecasts for the current fiscal year ending in March 2021, heightening expectations it will maintain its massive stimulus for the time being to cushion the blow from COVID-19. As widely expected, the central bank kept monetary policy steady, including a -0.1% target for short-term interest rates and a pledge to guide long-term rates around 0%. It also made no changes to a package of measures to ease corporate funding. (Reuters)

Japan: Consumer confidence highest in 8 months. Japan's consumer confidence improved to the highest level in eight months in Oct, data from the Cabinet Office showed. On a seasonally adjusted basis, the consumer confidence index increased to 33.6 in Oct from 32.7 in Sept. The latest index was the highest since Feb, when it was 38.3. The index reflecting households' willingness to buy durable consumer goods rose to 35.7 in Oct, and the index for overall livelihood increased to 36.2. (RTT)

South Korea: Industrial output jumps 5.4% on month in Sept. Industrial production in South Korea climbed a seasonally adjusted 5.4% on month in Sept, Statistics Korea said. That beat expectations for an increase of 3% following the upwardly revised 0.3% contraction in Aug (originally -0.7%). On a yearly basis, industrial production jumped 8%, exceeding expectations for a gain of 1.7% following the upwardly revised 2.6% decline in the previous month (originally -3.0%). For the 3Q of 2020, industrial production was up 5.7% on quarter and 0.9% on year. (RTT)

Singapore: Producer prices decline slows in Sept. Singapore's producer prices declined at a softer pace in Sept, data from the Department of Statistics showed. The manufacturing PPI fell 9.7% YoY in Sept, following an 9.9% decline in Aug. The oil index declined 40.5% annually in Sept, and non-oil indices fell 5%. The Domestic Supply Price Index dropped 10.5% YoY in Sept, following the 9.3% decrease in Aug. On a monthly basis, producer prices rose 0.2% in Sept, after a 1.9% decrease in the preceding month. (RTT)


FGV: Expects RM3.5bn-RM4.3bn compensation from Felda over LLA termination. FGV Holdings is expected to receive compensation of between RM3.5bn and RM4.3bn from the termination of its land lease agreement (LLA) with the Federal Land Development Authority (Felda), it said. The group stated that it has yet to receive written notice from Felda regarding the termination, which will take 18 months to complete. (SunBiz)

SunCon: Consortium bags RM315m contract in India. Sunway Construction Group's (SunCon) consortium, formed by subsidiary Sunway Construction SB (60%) and RNS Infrastructure Ltd (40%), has bagged RM315m contract from the National Highways Authority of India (NHAI). Construction of the project is expected to commence within 195 days from the LOA, while a concession agreement will be signed in due course. (Business Times)

WCE: Inks deal with Seriemas Development for RM126.8m interchange job. WCE Holdings is close to securing a construction works contract worth RM126.8m for a proposed access from the West Coast Expressway to a mixed development project in Kota Seri Langat. It added that the project is expected to contribute positively towards the future earnings of the group. (The Edge)

HeiTech Padu: Bags second NRD contract worth RM51m. HeiTech Padu has been awarded a second contract by the National Registration Department (NRD) this year, with the latest one worth a higher RM50.97m. It said the contract is for a period of 36 months commencing from Nov 1, 2020 to Oct 31, 2023. (The Edge)

AT Systematization: Line 1 glove production nears completion. AT Systematization’s Line 1 glove dipping facility is 80% completed and the first batch of medical-grade nitrile gloves set to be produced in less than two months. It will commence in early Dec 2020, which would enable revenue contribution for the new glove business to begin in FY2021 and for every subsequent two months it will install two new glove dipping lines. AT estimated that its glove production capacity to reach 2.6bn glove pieces per annum by June 2021. (SunBiz)

BAT: Sees 17% QoQ net profit growth in 3Q, declares 21 sen dividend. British American Tobacco (Malaysia) (BAT) saw its net profit for the 3QFY20 rise 16.7% QoQ following higher sales. BAT declared a dividend of 21 sen per share versus 29 sen a year earlier, bringing its 9MFY20 to 56 sen. Its latest quarterly dividend is the highest dividend that it has posted so far in its FY20. (The Edge)

CMMT: 3Q NPI falls on higher vacancies and rental relief, pays DPU of 1.13 sen. CapitaLand Malaysia Mall Trust's (CMMT) net property income (NPI) fell 17.2% to RM40.7m for the 3QFY20, from RM49.2m a year earlier. This was mainly due to higher vacancies and the rental relief granted to affected tenants. It reported a distributable income of RM23.2m and distribution per unit (DPU) of 1.13 sen for the quarter. (The Edge)

Market Update

The FBM might open higher today as US stocks rose on Thursday after data showed the economy was strengthening and President Donald Trump hinted at plans for a large additional fiscal stimulus after the election. The S&P 500 index of blue-chips rose 1.2% for its best day in two weeks — a reversal from Wednesday, when it fell 3.5%, the worst day since June. The Nasdaq Composite index rose 1.6%, also the best showing in two weeks, as investors anticipated positive earnings after the market close from Apple, Amazon, Alphabet and Facebook. The bullish turn was accentuated in afternoon trading when Mr Trump said he was preparing a “very big” fiscal package, should he be returned to office in next week’s US presidential election. Data released on Thursday morning showed the American economy rebounded in the third quarter and jobless claims dropped more than expected last week. US economic output rose 7.4% in the July to September period compared with the previous three months. It shrank 9 % in the second quarter. Initial US jobless claims fell to 751,000 last week, below the 775,000 claims forecast by economists, although the number remains at historically high levels as the country faces a fresh rise in coronavirus cases. Europe’s main equities bourses closed little-changed, having swung between gains and losses throughout Thursday. London’s FTSE 100 and the CAC 40 in Paris both ended the day flat, while Frankfurt’s Xetra Dax edged up 0.3%. Asian markets finished mixed with the Shanghai Composite gained 0.11%, while the Hang Seng led the Nikkei 225 lower. They fell 0.49% and 0.37% respectively

Source: PublicInvest Research - 30 Oct 2020

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