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PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 25 Jan 2021, 1:29 PM

 

PublicInvest Research Headlines - 10 Nov 2020

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Economy

US: Consumers' views on labor market mixed, New York Fed survey shows. US consumers reported mixed feelings about the labor market in Oct as the outlook for unemployment improved but the perceived odds of finding new work after losing a job dropped to a six-year low, according to a survey released on Monday by the New York Federal Reserve. The regional Fed bank’s latest Survey of Consumer Expectations found gradual improvement in optimism about the labor market, with the average expectation that the unemployment rate could be higher one year from now dropping for the third consecutive month. (Reuters)

US: Still faces possible default wave, asset declines due to pandemic - Fed. The US may still face a wave of debt defaults and “significant declines” in asset prices because of the coronavirus pandemic and recession, the Federal Reserve warned on Monday in a stark reminder that the economy, while recovering, is far from out of the woods. “As many households continue to struggle, loan defaults may rise, leading to material losses,” for lenders, the Fed said in its latest biannual Financial Stability Report. Business debt “has risen sharply as businesses increased borrowing to weather the period of weak earnings. (Reuters)

US, EU: EU 'regrettably' hits US with tariffs, seeks better Biden ties. The European Union will impose tariffs on up to USD4bn of US imports in retaliation for US subsidies for Boeing, but said on Monday it was hopeful of an improvement in trade ties under US President-elect Joe Biden. The move, given the green light by the World Trade Organization last month, is the latest in a 16-year USEU dispute over civil aviation subsidies. From Tuesday, the EU will impose tariffs of 15% on US exports of planes and parts and of 25% on a range products including tobacco, nuts, fruit juice, fish, spirits, bags, tractors and casino and gym equipment. (Reuters)

EU: Euro zone investor morale worsens in Nov but beats forecast. Investor morale in the euro zone fell for a second consecutive month in Nov but the drop was not as bad as feared because lockdowns imposed to curb the spread of the coronavirus did not hit the economy as hard as expected, a survey showed on Monday. Sentix’s index for the euro zone dropped to -10.0 in Nov from -8.3 in Oct. That compared with a Reuters forecast for a reading of -15.0. “The renewed lockdowns in many EU countries have less impact than feared,” said Manfred Huebner, MD of Sentix. (Reuters)

EU: German exports rise more than expected in Sept. German exports rose by more than expected in Sept and foreign trade gave Europe’s largest economy a boost going into the 4Q as it struggles to avoid slipping into a double dip contraction. Seasonally adjusted exports rose 2.3% on the month after an upwardly revised 2.9% rise in Aug, the Federal Statistics Office said. Imports fell by 0.1% after a rise of 5.8% the previous month. The trade surplus expanded to EUR17.8bn, the Office said. Economists polled by Reuters had expected exports to rise by 2.0% and imports to increase by 2.1%. The trade surplus was predicted to come in at EUR15.8bn. (Reuters)

Taiwan: Trade surplus grows in Oct. Taiwan's trade surplus grew in Oct as exports rose and imports declined, figures from the Ministry of Finance showed on Monday. The trade surplus increased to USD7.4bn in Oct from USD3.9bn in last year. Economists had expected a surplus of USD5bn. In Aug, the trade surplus was USD7.1bn. Exports rose 11.2% YoY in Oct, following an 9.4% growth in Sept. Economists had expected an increase 4.2%. Imports declined 1.0% annually in Oct, following a 5.4% increase in the preceding month. Economists had forecast a fall of 2.5%. Exports of parts of electronic products, information, communication and audio-video products, plastic and rubber, and articles thereof, and machinery grew in Oct. (RTT)

Japan: Leading index highest in more than a year. Japan's leading index rose to the highest in over a year in Sept, preliminary data from the Cabinet Office showed on Monday. The leading index, which measures the future economic activity, rose to 92.9 in Sept from 88.5 in Aug. Economists had expected a reading of 88.6. The latest reading was the highest since July last year, when it was 93.7. The coincident index increased to 80.8 in Sept from 79.4 in the previous month. Economists had forecast a score of 79.0. The latest reading was the highest since March. The lagging index rose to 92.2 in Sept from 91.3 in the prior month. (RTT)

Japan: Manufacturers' less pessimistic in Nov - Reuters Tankan. Business sentiment of Japanese manufacturers and service-sector firms was the least pessimistic in nine months in Nov, likely as the world’s third-largest economy showed signs of pulling out of a coronavirus-induced recession, a Reuters poll showed on Monday. But both sectors believed conditions will remain negative over the coming months, highlighting the struggle to completely shake off the drag from Covid-19, according to the monthly Reuters Tankan, which tracks the BOJ’s closely watched tankan quarterly survey. The Reuters Tankan sentiment index for manufacturers showed a marked improvement in Nov, rising to -13 from -26 in the previous month. But the index remained in negative territory for a 16th straight month. (Reuters)

Indonesia: Consumer confidence weakens in Oct. Indonesia's consumer confidence weakened in Oct, though households' expectations for the next six months remained quite optimistic on hopes of more income and job availability, survey data from Bank Indonesia showed on Monday. The consumer confidence index fell to 79.0 from 83.4 in Sept, the bank said. The consumer expectation index remained above the 100-point threshold at 106.6. This signaled that consumer expectations of economic conditions in the next six months was quite optimistic, underpinned by upbeat sentiment regarding the income and employment outlook. However, consumers were less upbeat regarding the current economic situation due to lower income and less job availability amid the Covid-19 pandemic. (RTT)

Markets

Serba Dinamik (Outperform, TP: RM2.45): Serba Dinamik, UNIMY to collaborate on TVET programmes. Serba Dinamik Group and University Malaysia of Computer Science and Engineering (UNIMY) will work together to conduct technical training, share technology and expertise, and run certification programmes recognised by technical and vocational education and training (TVET) institutions in Terengganu. Group managing director Datuk Dr Mohd Abdul Karim Abdullah said this collaboration should be the key to success towards Industrial Revolution 4.0 (IR4.0). (Bernama)

Ho Wah Genting: Obtains one-year conditional approval to make medical products in Indonesia. Ho Wah Genting said its wholly-owned Indonesian subsidiary has obtained approval from that country's health ministry to manufacture medical products such as surgical face masks, Covid-19 rapid test cassettes and liquid chemical sterilants. The approval is valid for one year, the group said. It added that the approval given to PT Ho Wah Genting (PT HWG) is on the condition that the items are produced under the supervision of Ariston Ginting, the registered pharmacist of PT HWG. (The Edge)

Barakah Offshore: Auditor expresses disclaimer of opinion on group's FY20 financials. The auditor of Barakah Offshore Petroleum has issued a disclaimer of opinion on the group’s audited financial statements for the financial year ended June 30, 2020 (FY20), as they could not obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Messrs Morison AAC PLT highlighted several bases for its disclaimer of opinion, including Barakah’s current liabilities exceeding its current assets by RM240.82m. (The Edge)

Revenue: Huawei Technologies, Revenue to develop eservices hub for SMEs. Huawei Technologies (Malaysia) SB and cashless payment solutions provider Revenue Group have teamed up to develop an e-Services Hub for the small and medium enterprises (SMEs). Their objective is to build an ecosystem to develop digital innovations to help over 900,000 SMEs in Malaysia move towards digital transformation and effectively boost their presence in the market. (The Star)

PUC: PUC, Sharp Electronics plan to develop joint ecosystem. PUC plans to collaborate with Sharp Electronics (Malaysia) SB (SEM) to develop an Internet-based integrated lifestyle ecosystem for consumers and businesses. The digital services provider said it signed a MoU with the home electrical appliance company with the aim of negotiating and finalising the partnership for operating the system. (Bernama)

Kronologi: Optimistic of continued growth in Oct-Dec 2020 quarter as business activities gradually resume. Kronologi Asia expects to see sequential growth in the upcoming Oct-Dec 2020 quarter as most businesses where it has a presence continue to recover from the pandemic amid gradual resumption of activities. “One of the driving factors for the sequential growth for our 4Q result is the market starting to recover. Also, with this pandemic] today, digitalisation is not a choice, all companies have to somehow go online or in the cloud to get their business going. Hence, the demand for data generated is tremendous. This is one of our biggest driving factors,” said its CEO Edmond Tay Nam. (The Edge)

Market Update

The FBM KLCI might open higher today as global share markets roared higher in a rally led by companies hit hardest by the pandemic after Pfizer and BioNTech revealed a breakthrough in the race to find a vaccine for Covid-19. The drugmakers’ announcement that a vaccine had been found to be more than 90 percent effective in a late-stage trial ricocheted through asset markets that had already been rising on optimism over Joe Biden’s victory in the US Presidential election. Wall Street’s blue-chip S&P 500 index closed 1.2% higher, having earlier been up 3.9% to set an intraday record high. The Russell 2000 of small-cap stocks, seen as a barometer of the US economy, surged 3.7%, but the Nasdaq Composite — which includes many of the tech stocks which have benefited from the shift to working from home — ended down 1.5%. Further afield, Europe’s Stoxx 600 closed up 4%, its best day since May.

Back home, the FBM KLCI was up 4.68 points or 0.31% to 1,524.32. Turnover was 11.70bn shares valued at RM4.62bn. There were 621 gainers, 533 losers and 420 counters unchanged. China’s Shanghai Composite Index closed 1.9% higher, and Hong Kong’s Hang Seng Index rose 1.2%. Japan’s Nikkei 225 gained 2.1% to close at a 29-year high.

Source: PublicInvest Research - 10 Nov 2020

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