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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 22 Jan 2021, 10:40 AM

 

PublicInvest Research Headlines - 26 Nov 2020

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Economy

US: Weekly jobless claims higher than expected as labor market takes hit from rising Covid cases. The pace of first-time filings for jobless claims picked up last week, with the jobs market showing increasing vulnerability to the coronavirus spread. Claims totaled 778,000 for the week ended Nov. 21, ahead of the 733,000 expectation from economists surveyed by Dow Jones and up from 742,000 the previous week, the Labor Department. Continuing claims for those collecting benefits for at least two weeks maintained their decline, falling to 6.07m, a drop of 299,000. (CNBC)

US: Consumer sentiment deteriorates slightly more than initially estimated. Revised data released by the University of Michigan showed consumer sentiment in the US deteriorated by slightly more than expected in the month of Nov. The report said the consumer sentiment index for Nov was downwardly revised to 76.9 from a preliminary reading of 77.0. "Consumer sentiment was unchanged in late Nov--a difference of just 0.1 points from midmonth--although there was a significant decline in the Expectations component which was offset by more favorable assessments of current economic conditions," said Surveys of Consumers chief economist, Richard Curtin. (RTT)

US: New home sales unexpectedly dip 0.3% in Oct. New home sales in the US unexpectedly edged lower in the month of Oct, according to a report released by the Commerce Department. The Commerce Department said new home sales dipped by 0.3% to an annual rate of 999,000 in October after inching up by 0.1% to a revised rate of 1.002m in Sept. (RTT)

US: Personal income drops in Oct, but personal spending rises. The Commerce Department released a report showing a decrease in US personal income in the month of Oct. The report said personal income fell by 0.7% in Oct after climbing by a downwardly revised 0.7% in Sept. Economists had expected personal income to come in unchanged compared to the 0.9% increase originally reported for the previous month. Disposable personal income, or personal income less personal current taxes, also slid by 0.8% in Oct after rising by 0.7% in Sept. Meanwhile, the report said personal spending rose by 0.5% in Oct after jumping by a revised 1.2% in Sept Economists had expected spending to increase by 0.4% compared to the 1.4% spike originally reported for the previous month. (RTT)

UK: Sunak warns of 2.6m unemployed faces historic recession. Chancellor of the Exchequer Rishi Sunak warned the UK will suffer its deepest recession in more than 300 years as a result of the coronavirus pandemic, with 2.6m unemployed, as he set out government spending plans. “Our health emergency is not yet over and our economic emergency has only just begun,” Sunak told Parliament. “So our immediate priority is to protect people’s lives and livelihoods.” (Bloomberg)

EU: ECB warns European banks may need more bad-loan provisions. Euro-area banks will probably have to set aside more money to soak up losses when government pandemic support ends and the economy grapples with massively increased debt, the ECB said. Provisions for losses on loans to companies are lower than in previous crises and below those seen in the US, the ECB said in its Financial Stability Review. That’s partly because measures by European governments and the Central Bank have reduced default risks, and partly because of weak profitability at banks. (Bloomberg)

Japan: Government retains economic view. Japan's government maintained its economic assessment but downgraded its view on capital spending. Retaining the economic view, the Cabinet Office said Japanese economy is still in a severe situation due to the Novel Coronavirus, but it is showing movements of picking up. Downgrading its assessment of business investment, the government said investment is decreasing recently. In October report, the cabinet office said business investment is showing weakness. The government repeated that private consumption is picking up. Also, the government retained its view on exports and industrial production. (RTT)

Markets

Mesiniaga: Wins RM19.11m Socso contract. Mesiniaga has received a RM19.11m contract for the supply, delivery, installation, configuration, testing, training, commissioning, and maintenance of local area network and network access control for SOCSO.The contract would commence on Dec 7, 2020, and was expected to be completed by July 6, 2026. (Bernama)

Khee San: Lodges police report against former chairman for alleged fraud, embezzlement. Khee San has lodged a police report against its former chairman Datuk Seri Liew Yew Chung, as well as other undisclosed concerted parties, for alleged fraudulent schemes including forgery, misappropriation and embezzlement of the company's funds for their personal use. On top of that, the board had also initiated legal suits against bankers for negligence but believed there had been collusion or conspiracy. (The Edge)

Sern Kou: 1QFY21 net profit jumped 16.2% to RM7.1m. Sern Kou Resources (SKR) posted a revenue of RM80.7m for 1QFY21. This represented an increase of 2.2% YoY. The improvement was mainly attributed to stronger demand for its furniture products especially from US and China customers. 1QFY21 net profit was up 16.2% YoY to RM7.1m. The bottomline increase was due to a net fair value gain on investment property. "We are making good progress on our furniture business, having added production lines with higher automation level to improve our operational efficiency,". (NST)

MPI: 1Q net profit rises on higher revenue. Malaysian Pacific Industries (MPI) saw its net profit for 1QFY21 rise 50.32% YoY to RM55.31 million. The higher profit was on the back of a higher revenue, which was up 19.37% to RM440.59m. The increase in revenue was supported by increases of 25%, 21% and 4% in the revenue of its Asian, US and EU segments. MPI declared a dividend of 10sen per share. “The board anticipates that the operating environment will remain challenging, due to the Covid19 pandemic and uncertainties of the global economy in the coming quarters. It added that the board expects MPI’s performance for FY21 to be satisfactory. (The Edge)

KNM: 3Q earnings up 60% on higher exchange gain and cost savings. KNM Group’s net profit rose 60.21% YoY to RM17.98m in 3QFY20, mainly due to a higher unrealised exchange gain, gain on disposal of a non-profitable business unit in China, and cost savings from operations. Revenue fell 3.52% YoY to RM321.32m, mainly due to a drop in ethanol production in Thailand’s operations. KNM anticipates that the outlook for this year to remain challenging due to the continuous uncertainties in the global economy outlook and impact of the pandemic. (The Edge)

Rubber Gloves (Neutral): No glove supply disruption despite factory closures, says MARGMA. The Malaysian Rubber Glove Manufacturers Association (MARGMA) said it does not anticipate any disruption to supply after Top Glove shut some factories due to a coronavirus outbreak among its workers. "Be assured that new capacity is available to make good the interim shortfall and that there is not going to be any aggravated disruption to whatever is currently being supplied to the world," MARGMA said. (The Edge)

MARKET UPDATE

The FBM KLCI might ease at opening today as rally in global stocks paused on Wednesday following the release of disappointing US jobless data and a cautious appraisal on the health of the UK economy. Wall Street’s S&P 500 pulled back from Tuesday’s record high, closing 0.2% lower after an unexpected jump in US unemployment claims suggested spiralling coronavirus cases and local shutdowns had delivered a further blow to the US economy. The subdued sentiment extended after the Federal Reserve released minutes of its past monetary meeting. The technology-focused Nasdaq Composite meanwhile closed up 0.5%. In Europe, the Stoxx 600 closed down 0.1%, although the continent-wide benchmark remained on course for its best month on record, having climbed 14% so far in November. London’s FTSE 100, which slid 0.6%, was among the worst performing indices in Europe, while the domestically focused FTSE 250 dipped 1.1%. This came as Rishi Sunak, UK chancellor, announced his latest spending review on Wednesday in which the Office for Budget Responsibility forecast that the British economy would shrink 11.3% this year.

Back home, the FBM KLCI climbed 1.22%, buoyed by the overnight record closing on Wall Street amid news that the Trump administration agreed to start the transition process for Presidentelect Joe Biden to the White House. The FBM KLCI added 19.19 points to 1,597.58, after moving between 1,582.31 and 1,600.20. The regional benchmarks were mixed, with the Japanese Nikkei 225 ending the day 0.5% higher, while China’s Shanghai Composite fell 1.2%.

Source: PublicInvest Research - 26 Nov 2020

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