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PublicInvest Research

Author: PublicInvest   |   Latest post: Thu, 21 Jan 2021, 11:57 AM

 

PublicInvest Research Daily - 30 Nov 2020

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Economy

EU: Eurozone economic confidence weakens amid second wave of infection. Eurozone economic confidence weakened to a four-month low in Nov as new restrictions to curb the spread of Covid-19 weighed on sentiment among retailers, service providers and consumers, survey results from European Commission showed Friday. The economic confidence index fell less-than-expected to 87.6 from 91.1 in the previous month. The expected reading was 86.5. This was the first fall in seven months. Industry confidence edged down in Nov, ending its six months rally which had brought the indicator almost back to its level prior to the outbreak of Covid19 in Europe. The industrial sentiment index declined to -10.1 from - 9.2 in the prior month. However, the score was above economists' forecast of -10.5. (RTT)

EU: More than half of German retailers pessimistic about Christmas - HDE. More than half of German retailers expect fewer customers and falling sales over the crucial Christmas period, according to a survey of 550 companies by the German Retail Association (HDE). “The prospects for Christmas business in this coronavirus year are worryingly poor, especially for many inner-city retailers and especially the fashion houses,” said HDE MD Stefan Genth on Sunday. Around 52% of companies expect significant losses in sales and customers after the extension of the country’s partial lockdown into Dec, the survey found, with 62% of retailers surveyed pessimistic about the further course of Christmas business. (Reuters)

EU: German minister does not expect big insolvency wave in Nov, Dec. German Economy Minister Peter Altmaier said on Friday he expects emergency aid will prevent a big wave of insolvencies in Nov and Dec among businesses, such as restaurants and hotels, that have been forced to close due to coronavirus curbs. “I believe that for the sectors primarily concerned (...) we have - through the Nov and Dec aid - created a possibility for the economic consequences to remain within manageable limits,” he said. “And therefore I do not expect any major waves of insolvency here either.” (Reuters)

EU: Italy producer prices, consumer confidence falls. Italy's consumer confidence weakened in Nov and producer prices continued to decline in Oct, data from the statistical office Istat showed on Friday. The consumer confidence decreased to 98.1 in Nov from 101.7 in Oct. Economists had expected a score of 99.0. The economic confidence index fell to 82.8 in Nov from 92.2 in the previous month. The business confidence index declined to 90.2 in Nov from 94.7 in the prior month. Economists had forecast a score of 93.5. Separate data from the statistical office showed that the producer price index declined 2.5% YoY in Oct, following a 3.1% fall in Sept. On a monthly basis, producer prices increased 0.6% in Oct, following a 0.1% rise in the preceding month. (RTT)

China: Factory growth likely edged up in Nov - Reuters poll. China’s factory activity likely expanded at a slightly faster pace in Nov, a Reuters poll showed on Friday, as the economy steadily recovers from the coronavirus crisis. The official manufacturing PMI is expected to rise slightly to 51.5 in Nov from Oct’s 51.4, according to the median forecast of 22 economists polled by Reuters. A reading above 50 indicates an expansion in activity on a monthly basis. China’s vast industrial sector is steadily returning to the levels seen before the pandemic paralysed huge swathes of the economy early this year. Premier Li Keqiang said on Tuesday he expects economic activity to return to a reasonable range next year. Profits at industrial firms grew in Oct for a sixth consecutive month and at their quickest pace since early 2017, data showed on Friday. (Reuters)

Taiwan: Raises 2020 growth forecast. Taiwan upgraded its growth outlook for this year as higher overseas demand for technological applications helped the economy to withstand the downturn posed by the coronavirus pandemic. The economy is forecast to grow 2.54% this year, up from the previous projection of 1.56%. But the government lowered its outlook for next year to 3.83% from 3.92%. GDP grew 3.92% YoY in the 3Q, faster than the 0.35% growth in the 2Q, data from the Directorate-General of Budget, Accounting and Statistics showed. The real GDP surged 16.59% on a QoQ, seasonally-adjusted annualized basis in the 3Q, in contrast to a 2.8% fall a quarter ago. (RTT)

India: GDP contraction slows, economy enters recession. India's economic contraction slowed sharply in the Sept quarter, but the economy entered a technical recession due to the impact of the harsh lockdown imposed to curb the spread of the Covid-19 pandemic. GDP fell 7.5% YoY, data from the statistics ministry showed on Friday. The pace of decline was much slower than the record 23.9% contraction in the June quarter as lockdown restrictions were relaxed in the June quarter. Economists had forecast an 8.8% contraction. (RTT)

Thailand: To see more visitors, 'signal' for reopening - tourism chief. Thailand expects to receive 1,200 foreign visitors in both Nov and Dec, after a slight easing of travel curbs aimed at generating some income until a ban on mass tourism is lifted, its tourism authority chief said on Friday. The country is gradually opening up to a limited numbers of visitors during the coronavirus pandemic to give some support to a tourism-dependent economy that the government expects to shrink by 6% this year. The new arrivals, however, would be a fraction of the number in 2019, a record year. (Reuters)

Singapore: Producer prices decline slows in Oct. Singapore's producer prices declined at a softer pace in Oct, data from the Department of Statistics showed on Friday. The manufacturing producer price index fell 8.3% YoY in Oct, following an 9.8% decline in Sept. The oil index declined 37.8% annually in Oct, and non-oil indices fell 4.0%. The Domestic Supply Price Index declined 9.6% YoY in Oct, after a 10.5% decrease in Sept. On a monthly basis, producer prices rose 0.5% in Oct, following a 0.1% increase in the preceding month. (RTT)

Markets

Brahim's: Launch entrepreneurship programme for exairline workers. Brahim’s Holdings and Malakat Mall in Cyberjaya have launched an entrepreneurship programme which is expected to attract the participation of 1,000 retrenched airline employees who are keen to generate income by selling quality frozen food products. Interested candidates only need to provide capital as low as RM1,000. (The Edge)

Maxim: Sells remaining 40% stake in Pulau Indah power project for RM70m. Maxim Global, formerly known as Tadmax Resources, is disposing of its remaining 40% stake in Pulau Indah Power Plant SB (PIPP) to Worldwide Holdings (WHB) for RM70m. PIPP operates the 1,200mw combined cycle gas turbine power plant project in Pulau Indah. (The Edge)

BHIC: Reports possible irregularities in its RM9bn littoral combat ship project to MACC. Boustead Heavy Industries Corp (BHIC) has lodged a report with the Malaysian AntiCorruption Commission (MACC) on possible irregularities in the RM9bn littoral combat ship (LCS) project, which its associate Boustead Naval Shipyard SB (BNS) is undertaking. The findings of the forensic audit were handed over to the MACC in Sept. (The Edge)

Public Bank: 3Q net profit up 2.2% to RM1.39bn. Public Bank’s net profit for the 3Q ended Sept 30, 2020 grew 2.2% to RM1.39bn as compared to the corresponding quarter in 2019 mainly due to higher investment income, higher net fee and commission income on higher income from stock-broking and fund management, higher Islamic banking income, higher net interest income and higher other operating income. (SunBiz)

Ekovest: Back in the black thanks to resumption of business activities. A recovery in business activities helped Ekovest swing back into the black with a net profit of RM10.86m in its 1QFY21, from a net loss of RM53.82m in the preceding quarter. Revenue increased 63.17% to RM313.77m. The group attributed the improved results to more construction work done being recognised, an increase in traffic volume for its toll operations, and an increase in rental income from the EkoCheras Shopping Mall. (The Edge)

Construction (Neutral): Malaysia, Singapore still in negotiations on HSR proposals, says Mustapa. Malaysia and Singapore are still in negotiations regarding the proposals presented by Malaysia to improve the KL-Singapore High Speed Rail (HSR) project. Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said the 2 countries had until Dec 31, 2020 to complete the negotiation process. (The Edge)

Oil & Gas (Neutral): Petronas 3Q in the red. Petroliam Nasional (Petronas) recorded a net loss of RM3.4bn for the 3Q of 2020, as compared to the net profit of RM7.4bn in the 3Q of 2019 primarily due to lower EBITDA, higher impairment loss on assets and higher tax expenses attributed to derecognition of deferred tax assets, primarily as a result of lower oil and gas prices outlook. (SunBiz)

MARKET UPDATE

The FBM KLCI might open with a positive bias today as Wall Street closed a truncated session last Friday, in which US markets were open just half a day, with the tech-heavy Nasdaq Composite up 0.9% to a fresh closing high. The S&P 500 rose 0.2%. The Stoxx Europe 600 share index closed up 0.4%, keeping the regionwide benchmark on track for a record monthly gain of more than 14%. But despite November’s advances, the Stoxx 600 is still 5% lower than when it started the year, while London’s FTSE 100 is down 15%. Optimism has also been tempered to some extent by the surge in coronavirus cases in the US and tightening restrictions in Europe.

Back home, the FBM KLCI dropped 0.28% as profit-taking emerged but still ended the week above the 1,600-point level at 1,607.59 points — the highest weekly closing since July 31. Gainers outnumbered losers by 621 versus 605, while 406 counters remained unchanged. Across Asia, Japan's Nikkei 225 rose 0.4%, while Seoul's Kospi climbed up 0.29%. In China, Hong Kong’s Hang Seng Index gained 0.39%, while the Shanghai Stock Exchange Composite Index closed up 1.14%.

Source: PublicInvest Research - 30 Nov 2020

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