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PublicInvest Research

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

 

PublicInvest Research Daily - 22 Jan 2021

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Economy

  • US: Housing starts, building permits jump to 14-year highs in Dec. New residential construction in the US jumped by much more than expected in the month of Dec, according to a report released by the Commerce Department. The housing starts spiked by 5.8% to an annual rate of 1.669m in Dec from the revised Nov estimate of 1.578m. With the much bigger than expected increase, housing starts soared to their highest level since reaching a rate of 1.720m in Sept of 2006. Single-family starts led the way higher, skyrocketing by 12%. The Commerce Department said building permits also surged up by 4.5% to an annual rate of 1.709m in Dec from the revised Nov rate of 1.635m. (RTT)
     
  • US: Jobless claims pull back more than expected to 900,000. The Labor Department released a report showing initial jobless claims pulled back in the week ended Jan 16th. The report said initial jobless claims fell to 900,000, a decrease of 26,000 from the previous week's revised level of 926,000. Economists had expected jobless claims to drop to 910,000. Even with the downward revision, the number of claims in the previous week represented the most since reaching 1.011m in the week ended Aug 22nd. Meanwhile, the Labor Department said the less volatile four-week moving average rose to 848,000, an increase of 23,500 from the previous week's revised average of 824,500. (RTT)
     
  • US: Philly Fed Index rebounds much more than expected in Jan. A report released by the Federal Reserve Bank of Philadelphia showed a substantial acceleration in the pace of growth in regional manufacturing activity in the month of Jan. The diffusion index for current activity soared to 26.5 in Jan after slumping to a revised 9.1 in Dec, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the Philly Fed Index to inch up to 12.0 from the 11.1 originally reported for the previous month. The much bigger than expected increase by the headline index was partly due to a significant acceleration in the pace of growth in new orders, with the new orders index spiking to 30.0 in Jan from 1.9 in Dec. (RTT)
     
  • EU: Consumer confidence weakens more than expected. Eurozone consumer confidence deteriorated at a faster-than-expected pace at the start of the year, preliminary data from a European Commission survey showed. The flash consumer confidence index fell to -15.5 from -13.9 in Dec. Economists had forecast a score of - 15.0. The consumer confidence index for the EU dropped to -16.5 from -15.3 in Dec. Both readings are below their long-term averages of -11.0 and -10.6, respectively. The data was collected from Jan 1 to Jan 20. (RTT)
     
  • EU: ECB leaves rates and QE unchanged, vows readiness to adjust tools when needed. The European Central Bank left its key interest rates and asset purchases unchanged, in line with expectations, and reaffirmed its willingness to adjust the policy tools when needed. The Governing Council left the main refi rate unchanged at a record low 0% and the deposit rate was kept at -0.50%. The bank retained the size of the pandemic emergency purchase programme (PEPP) at EUR1,850bn. (RTT)
     
  • UK: Manufacturing outlook weakens further - CBI Survey. UK manufacturers expect production and new orders to decline in the coming three months, according to the Industrial Trends Survey, released by the Confederation of British Industry. Due to a fall in domestic and foreign demand, a net balance of -12% said new orders fell in the quarter to Jan compared to -3% in the Oct quarter. A balance of -17% expects total new orders to fall at a slightly quicker pace in the next quarter. Manufacturers said output volumes were broadly flat in the quarter to Jan but a net 24% expect production to fall once again in the coming quarter. (RTT)
     
  • Japan: BOJ revises up next year's growth forecast, holds fire on policy. The Bank of Japan kept monetary policy steady and revised up its economic forecast for next fiscal year, signalling that it has delivered sufficient stimulus for now to cushion the blow from the Covid-19 pandemic. The central bank kept unchanged its target for short-term interest rates at -0.1% and that for 10-year government bond yields around 0% in a two-day rate review. BOJ trimmed its economic forecast for the current year ending in March to a 5.6% contraction. (Reuters)
     
  • Japan: Exports post first annual gain in two years in Dec. Japan’s exports rose for the first time in two years in Dec, driven by shipments to China, government data showed, offering a glimmer of hope for policymakers counting on an export-led recovery amid a resurgence of the coronavirus. The Ministry of Finance data showed Japan’s exports rose 2.0% in Dec from a year earlier, slightly below a 2.4% increase expected by economists but up from a 4.2% decline in the previous month. (Reuters)
     
  • India: Has seen the worst, barring another wave of Covid-19, says RBI. Barring another wave of COVID-19 infections, the worst is over for India’s economy and policymakers may soon have more room to support a recovery. The RBI slashed interest rates early last year to cushion the shock from the coronavirus crisis, but has left rates unchanged in recent months, cautious of rising inflation. The RBI expects economy to contract by 7.5% in the current fiscal year to March, but it is likely to escape recession and see modest growth in the quarter. (Reuters)
     
  • South Korea: Exports grow much faster, buoyed by sales of chips, cars. South Korean exports expanded at a much faster pace in the first 20 days of Jan, driven by strong demand from major trading partners and underpinned by crucial sales of chips, cars and mobile devices. Outbound shipments increased 10.6% from a year earlier to USD28.23bn in Jan. 1-20 period, picking up from a gain of 1.2% in Dec 2020. Overseas sales of semiconductors jumped 11.6%, while those of mobile phones and cars surged 60.5% and 15.7%. (Reuters)
     
  • Indonesia: Central bank holds rates at first 2021 meeting. Indonesia’s central bank kept key interest rates unchanged at a record low, holding fire after providing a bout of monetary stimulus last year to support the coronavirus-hit economy. Bank Indonesia (BI) left the 7-day reverse repurchase rate at 3.75%, the lowest since the central bank began using it as its benchmark in 2016. BI also kept its overnight deposit facility and lending facility rates at 3.00% and 4.50%, respectively. (Reuters)
     

Markets

  • Bintai Kinden: Proposes to diversify into property development and management. Bintai Kinden Corp has proposed a diversification into the property development and management business and intends to undertake two mixed property development and management projects – Holistica Melaka and Holistica Penang. It also proposed a private placement of up to 30% of its existing issued shares at an indicative issue price of 52 sen per share, to raise RM58.4m. The proceeds will be used mainly for the mixed development projects. (SunBiz)
     
  • Green Packet: Funds bid for SilTerra. A tech fund promoted by Green Packet is funding the majority shareholders of Nuglobal Ventures SB which is keen on taking over Khazanah Nasional's semiconductor fabricating company SilTerra Malaysia SB. It revealed that Nuglobal Ventures has submitted a bid for SilTerra. However, it highlighted that the bid is subject to strict confidentiality with Khazanah and no detail of the bid can be publicly disclosed now. (The Edge)
     
  • DNeX: No definitive agreement to acquire SilTerra. Dagang Nexchange (DNeX) clarified that it has not entered into any definitive agreement to acquire Khazanah Nasional’s semiconductor fabricating company SilTerra Malaysia SB. Nevertheless its constantly evaluating various proposals to grow its business organically or through acquisitions including that of SilTerra. (The Edge)
     
  • Cymao: Secures RM120m mix development project in Batu Ferringgi. Cymao Holdings’ (CHB) wholly-owned subsidiary Billion Apex SB (BASB) signed a MoU with Ageson Development SB (ADSB), a wholly-owned subsidiary of Ageson for a mixed development project in Bandar Batu Ferringgi, Penang. This MoU entails the appointment of BASB as the main contractor to undertake and complete main building works for the mixed development project that comes with a contract value of RM120m. (Business Times)
     
  • Pertama Digital: eJamin sees rapid growth following Malaysian judiciary's support for digital shift. Pertama Digital's (PDB) digital bail payment solution eJamin is showing rapid growth following the Malaysian courts encouragement to digital shift amid the ongoing Covid-19 pandemic. It is seeking cooperation from banks to lift the financial process exchange (FPX) transfer limit on eJamin transactions. (Business Times)
     
  • Focus Dynamics: Sets up Focus Medicare for healthcare venture. Focus Dynamics Group is venturing into healthcare with the establishment of Focus Medicare SB, to create a digital platform for over-the-counter (OTC) healthcare products as part of its strategic plan to incorporate an entire suite of food-based consumer products into its ecosystem. (SunBiz)
     
  • UOA REIT: 4Q net rental income falls 11% on tenant rental rebates. UOA REIT’s net rental income for the 4QFY20 fell 10.8% to RM13m, from RM14.6m a year earlier. The fall was due to rental rebates given to eligible tenants. UOA REIT declared a DPU of 4.6 sen, compared with 2.3 sen a year ago. The cumulative DPU for FY20 was 8.44 sen (The Edge)
     

MARKET UPDATE

The FBM KLCI might end the week with a positive note after global shares reached new heights on Thursday following Joe Biden’s inauguration, as investors welcome the 46th US president’s promise of $1.9tn in stimulus spending and the jettisoning of isolationist policies pursued by his predecessor. On Wall Street the blue-chip S&P 500 stock index inched slightly higher, while the tech-heavy Nasdaq Composite climbed 0.6% following Wednesday’s record highs. Following his inauguration, President Biden swiftly overturned some of his predecessor Donald Trump’s actions, signing orders to rejoin the Paris climate accord, halting the US withdrawal from the World Health Organization and scrapping a ban on entry to the country by citizens from some Muslim-majority nations. In Europe, the benchmark Stoxx 600 index closed flat and London’s FTSE 100 lost 0.4%.

Back home, the FBM KLCI fell below 1,600 to close near its intraday low as the movement control order (MCO) expansion affected market sentiment. The index ended the day 6.74 points or 0.42% lower at 1,594.8, after having risen to a high of 1,615.22. Elsewhere in region, stocks mostly rose, tracking US markets as investors hoped for more economic stimulus from newly inaugurated US President Joe Biden to offset damage wreaked by the Covid-19 pandemic. Performance-wise, Japan’s Nikkei ended 0.82% higher and South Korea’s Kospi added 1.49%. Meanwhile, the Shanghai composite index rose1.07% but the Hang Seng index ended 0.12% lower.

Source: PublicInvest Research - 22 Jan 2021

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