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Author: PublicInvest   |   Latest post: Tue, 2 Mar 2021, 9:39 AM

 

PublicInvest Research Headlines - 20 Jan 2021

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Economy

  • EU: Construction output rises in Nov. Eurozone's construction output rose in November, data form Eurostat showed. The construction output increased 1.4% MoM in Nov, after remaining unchanged in Oct. In Sept, output dropped 2.7%. Production in building construction rose 1.0% MoM in Nov and output in civil engineering gained 3.1%. On a YoY basis, the construction output fell 1.3% in Nov, following a 1.9% decrease in the prior month. In the EU27, construction output increased 1.2% MoM, and fell 1.1% YoY. Among member states, the biggest increases were recorded in Slovenia, Hungary and Slovakia, while the largest decreases were observed in Romania, Spain and Belgium. (RTT)
     
  • EU: Car sales drop most on record in year vexed by virus. European car sales plunged the most on record last year as relatively resilient demand in the 2H did only so much to make up for the collapse during the initial outbreak of Covid-19. New-vehicle registrations fell 24%, the European Automobile Manufacturers Association said, the biggest annual drop since records began in 1990. A strong finish to the year for Volkswagen AG and PSA Group limited the industry wide decline in Dec to just 3.7%. Carmakers managed to better cope with government measures to contain the spread of the coronavirus as the year rolled on, helped by subsidies and dealers embracing online-ordering tools. But the collapse in sales in March, April and May proved difficult to come back from, with the industry managing a single month of growth all year. (Bloomberg)
     
  • EU: German ZEW economic confidence strengthens more than expected. German economic sentiment improved more-than-expected in Jan despite the uncertainty over the further course of the lockdown, survey data from the ZEW - Leibniz Centre for European Economic Research showed. The ZEW Indicator of Economic Sentiment climbed 6.8 points to 61.8 in Jan. The reading was above the expected level of 60.0. At the same time, the current situation index rose slightly to -66.4 from -66.5 in Dec. The expected level was -68.5. (RTT)
     
  • China: Seen keeping lending benchmark unchanged for 9th month in Jan. China’s benchmark lending rate is likely to remain unchanged at the first monthly fixing of the year, steady for the ninth straight month, as the economy recovers from the coronavirus shock. The one-year LPR was last at 3.85% after 30bps of rate cuts last year, and the five-year rate stood at 4.65% after 15bps of cuts in 2020. China’s economy picked up speed in 4Q, data showed, with growth beating expectations and is poised to expand further this year even as the global pandemic rages unabated. The strong market expectations for a steady LPR fixing in Jan also came as the People’s Bank of China (PBOC) kept borrowing cost on medium term loans unchanged for nine months in a row. (Reuters)
     
  • Japan: Industrial production falls in Nov. Japan's industrial production declined for the first time in six months in Nov, final data from the Ministry of Economy, Trade and Industry showed. Industrial output dropped 0.5% MoM, in contrast to Oct's 4% increase and the flash estimate of nil growth. This was the first fall in six months. Shipments fell 1.2%, in contrast to previous month's 4.9% increase. The rate was revised from -0.9% estimated previously. Inventories were down 1.5%, bigger than the preliminary estimate of -1.1% but slower than the 1.8% drop seen a month ago. The inventory ratio came in at -2.2% versus -3.3% in Oct and the preliminary estimate of - 1.8%. YoY basis, industrial production decreased 3.9%, data showed. The capacity utilization rate dropped 2.9% MoM in Nov (RTT)
     
  • Hong Kong: 4Q20 unemployment at 16-year high, hit by economic slowdown. Hong Kong's seasonally adjusted unemployment rose to a 16-year high of 6.6% in 4Q2020, as a new wave of coronavirus infections slammed the brakes on a wide range of economic activities. The figure compared with 6.3% in the SeptNov period and was the highest since the 4Q2004 when unemployment hit 6.6%. The underemployment rate remained unchanged at 3.4% in the two three-month rolling periods. The number of unemployed rose by about 1,500 people to 245,800 in the 3 months ended in Dec. The labour market deteriorated due to the fourth wave of the pandemic. (Reuters)
     
  • Thailand: Approves USD7bn stimulus to mitigate virus impact. Thailand's cabinet approved THB210bn (USD6.99bn) of new stimulus to boost consumption and help alleviate the economic impact of a recent spike in coronavirus cases in the country, the finance minister said. The government will offer 31.1m people, mainly low-income earners, up to THB7k each, with payments made weekly during FebMarch. The money must be used to buy goods and services from sellers registered with the government until the end of May, he said. The government will also allow 1.34m people to register for a THB3.5k available under the current co-payment scheme. The measures will help reduce living costs and ease the impact of the new outbreak. The new programme should boost economic growth by 0.5 - 0.6%, but together with the co-payment scheme, growth should be lifted by 1% (Reuters)

Markets

  • F&N: Halal food set to be new pillar of growth. Fraser & Neave Holdings (F&N) is set to establish halal food as the group’s new pillar of growth following the acquisition of three F&B companies – Sri Nona Food Industries SB, Sri Nona Industries SB and Lee Shun Hing Sauce Industries SB – for up to RM60m. (SunBiz)
     
  • T7 Global: Bags contract extension from Petronas Carigali. T7 Global's wholly-owned Tanjung Offshore Services SB has received a contract extension from Petronas Carigali SB for the provision of underwater inspection services using mini remotely operated vehicle. T7 Global said the contract had been extended to May 31 this year. (Bernama)
     
  • Riverstone: Subsidiary acquires land in Selangor for RM5m. Riverstone Holdings has, through its wholly-owned subsidiary Riverstone Resources, acquired a piece of industrial land at Kawasan Perindustrian Bukit Beruntung, Selangor, for a consideration of RM5m. The land was purchased to support the expansion of the group’s operations, as well as the expansion of production capacity for cleanroom gloves. (The Edge)
     
  • Alam Maritim: Clarifies that MV Setia Kilas vessel is managed by third party. Alam Maritim Resources has clarified that the MV Setia Kilas vessel which sank in the Kuala Terengganu estuary, had been bareboat chartered to and managed by a third party, the demise charterer. "All crew and passengers were evacuated immediately and no casualty was recorded," it said. (Bernama)
     
  • Jade Marvel: Terminates JVA for development of housing project in Penang. Jade Marvel Group and JSC Land SBhave mutually agreed to terminate their joint venture agreement (JVA) to develop a project in mainland Penang. Jade Marvel, through its unit Great Marvel SB (GMSB), will instead complete the development on its own. The termination of JVA is due to JSC being unable to obtain approval from the relevant authorities for the change of developer's name from GMSB to JSC. (The Edge)
     
  • Hai-O: To transfer listing status to BesHom. Hai-O Enterprise has proposed a share exchange with BesHom Holdings, which will also take over the group's listing status. Hai-O said the exercise will see its entire 300.3m shares exchanged with BesHom shares on a one-for-one basis. Upon the completion of the share exchange, BesHom will become the new holding company of the group. (The Edge)
     
  • Bioalpha: Plans rights issue of new shares, ICPS. Bioalpha Holdings has proposed to undertake a rights issue of up to 83.34m new shares and a rights issue of up to 208.34m new irredeemable convertible preference shares (ICPS) to raise funds primarily for the group's working capital requirements. It said the fundraising plans include a private placement of 290m new ICPS in the group. (The Edge)
     
  • KIP REIT: Posts RM8.66m net profit for 2Q. KIP REIT’s net profit fell 6.2% to RM8.66m for its 2QFY21, from RM9.23m reported in the same quarter of the previous year mainly due to the amortisation of rental rebates. Revenue for the period stood at RM18.62m, a 5.7% decline from RM19.73m previously. For 2QFY21, KIP REIT has declared a second interim distribution per unit of 1.59 sen amounting to RM8m. (SunBiz)

Market Update

The FBM KLCI might open with a positive bias today as US stocks closed higher on Tuesday after Treasury secretary nominee Janet Yellen made the case for large-scale fiscal stimulus to cushion the economic blow from Covid-19 during her confirmation hearing in Washington. The benchmark S&P 500 index gained 0.8%, while the tech-heavy Nasdaq Composite rose 1.5%. Ms. Yellen backed major fiscal stimulus to help workers and businesses battered by the coronavirus pandemic as she testified before the Senate Finance Committee, which will vote on her nomination for Treasury secretary. In prepared remarks, she said the US risks a longer, more painful recession unless Congress approves more aid, and encouraged lawmakers to “act big” to shore up the recovery. In Europe, the continent-wide Stoxx 600 closed down 0.2%. London’s FTSE 100 dropped 0.1% and Germany’s Xetra Dax was 0.2% lower.

Back home, the FBM KLCI erased all its gains earlier in the day and ended at its intra-day low, as the government’s RM15bn Perlindungan Ekonomi dan Rakyat Malaysia (Permai) stimulus package was met with lukewarm response from investors. The benchmark index, which rose to a high of 1,618.41, finished the day 7.64 points or 0.48% lower at 1,601.88. In Hong Kong, shares in China Evergrande added almost 16% after the country’s largest real estate group redeemed a USD2bn convertible bond early. Hong Kong’s Hang Seng index closed up 2.7% on Tuesday to touch a 20-month high. Japan’s benchmark Topix climbed 0.6% and South Korea’s Kospi 200 added 2.6%. In China, the CSI 300 index of Shanghai and Shenzhen-listed stocks shed 1.5% on Tuesday.

Source: PublicInvest Research - 20 Jan 2021

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