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Author: PublicInvest   |   Latest post: Wed, 12 May 2021, 9:06 AM

 

PublicInvest Research Headlines - 18 Jan 2021

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Economy

  • US: Business inventories rise in Nov. US business inventories increased in Nov, supporting expectations that inventory investment was likely the main driver of economic growth in 4Q. Business inventories rose 0.5% in Nov after increasing 0.8% in Oct, the Commerce Department said. Inventories are a key component of GDP. Nov's increase was in line with economists' expectations. Inventories fell 3.2% on a YoY basis in Nov. Retail inventories rose 0.7% in Nov, as estimated. That followed a 0.9% increase in Oct. Motor vehicle inventories jumped 1.9%, instead of 1.5% as previously reported. (Reuters)
     
  • US: Producer prices rise slightly less than expected in Dec. A report released by the Labor Department showed US producer prices increased by slightly less than expected in Dec. The Labor Department said its PPI for final demand rose by 0.3% in Dec after inching up by 0.1% in Nov. Economists had expected producer prices to rise by 0.4%. The increase in producer prices largely reflected a spike in energy prices, which surged up by 5.5% in Dec after jumping by 1.2% in Nov. Meanwhile, the report said food prices edged down by 0.1% in Dec after climbing by 0.5% in the previous month. Excluding food and energy prices, core producer prices crept up by 0.1% in Dec, matching the uptick seen in the previous month. (RTT)
     
  • US: Retail sales continue to slump amid spike in coronavirus cases. Retail sales in the US continued to decline in Dec, according to the Commerce Department. The Commerce Department said retail sales fell by 0.7% in Dec after tumbling by a revised 1.4% in Nov. Economists had expected retail sales to come in unchanged compared to the 1.1% slump originally reported for the previous month. The continued decrease in retail sales reflected steep drops in sales by non-store retailers, electronics and appliance stores, food service and drinking places and department stores. On the other hand, sales by gas stations spiked by 6.6%. (RTT)
     
  • EU: Eurozone exports continue to rise in Nov. Eurozone exports increased for the seventh straight month in Nov, estimate from Eurostat showed. Exports grew 2% MoM and imports climbed 2.4% from October. However, compared to the month before restrictions were imposed in Feb, both flows were still down by 4.4% and 4.8%, respectively. The trade surplus totaled seasonally adjusted EUR 25.1bn compared to a EUR 25.2bn surplus in Oct. On a YoY basis, exports of goods decreased 1% and imports fell 4.2% in Nov. The trade surplus rose to an unadjusted EUR 25.8bn from EUR 20.2bn in the previous year. (RTT)
     
  • UK: Economy shrinks but might avoid double-dip recession. Britain's economy shrank in Nov as it went into a new lockdown, but the decline was smaller than expected as businesses adjusted to social distancing and schools remained open, making a double-dip recession less likely. The 2.6% monthly decline was the first since April. The scale was also far smaller than April's 18.8% collapse during Britain's first lockdown. UK’s economy shrank more than its peers in 1H20 and is now 8.5% smaller than it was in Feb. A third, stricter lockdown is likely to cause Britain's economy to contract in the 1Q21. (Reuters)
     
  • Indonesia: Trade balance swings to surplus. The trade balance registered a surplus of USD2.10bn in Dec, versus a deficit of USD0.08bn a year ago. Economists had expected a surplus of USD2.30bn. In Nov, the trade surplus was USD2.59bn. Exports grew 14.63% YoY in Dec. Economists had expected a rise of 6.3%. Imports fell 0.47% annually in Dec. Economists had forecast a decrease of 12.47%. On a MoM basis, exports rose 8.39% and imports increased 14.0% in Dec. (RTT)
     
  • Thailand: Central bank says might cut growth forecast after second coronavirus wave. Thailand's central bank said it might cut its growth forecast for 2021 in response to a recent coronavirus outbreak, although the impact on economic activity has been less than the first wave of infections. The new spread could hit the country's GDP by 1.0-4.0%, depending on its severity and the effectiveness of containment measures, said Bank of Thailand (BoT). The BoT lowered its 2021 GDP growth outlook to 3.2% from 3.6%, which had taken into account some virus impact. (Reuters)

Markets

  • Kanger: Undertakes six remaining construction works for RM495.9m. Kanger International (KIB), through its wholly-owned subsidiary, Kanger Ventures SB (KVSB) has entered into collaboration agreements with multiple contractors to carry out remaining construction works across six sites which has a total project value of RM495.9m. All of the six construction projects are expected to be completed by Dec 2023. (Business Times)
     
  • KNM: To raise RM54.9m via placement to repay borrowings, fund ongoing projects. KNM Group plans to raise up to RM54.93m via a private placement to pay off its bank borrowings and to fund some ongoing projects. It aims to issue up to 10% of its share capital or 296.92m shares, which will be placed out to third party investors to be identified. The placement is expected to be completed in the 1Q of 2021. (The Edge)
     
  • Samaiden: Clinches RM25.8m EPCC contract from Gimzan Plywood. Samaiden Group (SGB) through its wholly-owned subsidiary Samaiden SB (SSB) has bagged a RM25.8m project from Gimzan Plywood SB (GPSB) to undertake EPCC works for a 2MWac biomass renewable energy power plant located in the Wakaf Tapai Industrial Area, Hulu Terengganu. The work has been scheduled to commence on Feb 2, 2021, and has been targeted for completion within 23 months. (Business Times)
     
  • Daya Materials: Bags RM23.8m sub-contractor job. Daya Materials’ 51%-owned subsidiary Daya CMT SB accepted a RM23.86m project from Sing Foong Niap Engineering SB, as sub-contractor in relation to the proposed construction of a recycle pulp and packaging paper plant in Kuala Langat, Selangor. The project is targeted to be completed by June 30, 2021. It is expected to contribute positively to the future earnings of the group. (SunBiz)
     
  • AT Systematization: Acquires land for second glove factory. AT Systematization’s wholly-owned subsidiary AT Glove Engineering SB has entered into a sales and purchase agreement with Seacera Porcelain SB to acquire industrial land for RM10.5m for the construction of a second glove factory. The industrial land located in Larut & Matang is 72,770 square meters in size. The deal is expected to be completed within 60 days and will be satisfied in cash. (SunBiz)
     
  • MESB: Proposes diversification into waste recycling business. MESB has proposed to diversify into the waste recycling business to include the collection and recycling of wastepaper, plastics scrap and scrap ferrous metal. The group anticipate its future prospects for the present principal business in the trading and retailing of apparels and leather products to be challenging. (SunBiz)
     
  • Batu Kawan: Controls 92% of CCM, does not intend to maintain listing. Batu Kawan has updated that it now controls 92.14% of Chemical Company of Malaysia (CCM), after receiving more acceptances for its RM3.10 takeover offer. It said it will not be maintaining CCM’s listing on the Main Market of Bursa Malaysia. The group said the offer will remain open for acceptance until Feb 2. (The Edge)

MARKET UPDATE

  • The FBM KLCI might open with a negative bias today, tracking US stocks which fell for the second consecutive day on Friday as oil prices dropped in a gloomy end to the week after disappointing US retail sales data underscored the severe strains faced by the world’s biggest economy. The benchmark S&P 500 index closed 0.7% lower, while the tech-heavy Nasdaq Composite was down 0.9%. The wobble in market sentiment came after a round of data released by the US commerce department on Friday showed that retail sales dropped 0.7% in December from November. In Europe, the continent-wide Stoxx 600 and London’s FTSE 100 both closed down 1%, while Frankfurt’s Xetra Dax fell 1.4%.

Back home, the FBM KLCI finished 8.70 points or 0.53% lower at 1,627.01, dragged mainly by profit taking on banking counters. The index earlier rose to a high of 1,637.88. Across Bursa Malaysia on Friday, 5.85bn securities were traded for RM4.06bn, compared with 6.49bn securities worth RM4.86bn on Thursday. In the region, Japan’s Nikkei 225 closed 0.62% lower at 28,519.18, while South Korea’s KOSPI ended 2.03% lower at 3,085.9.

Source: PublicInvest Research - 18 Jan 2021

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