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PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 8 Mar 2021, 10:59 AM

 

PublicInvest Research Daily - 25 Jan 2021

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Economy

  • Global: World’s economic recovery gets delayed by slow vaccine rollouts. The world economy is facing a tougher start to 2021 than expected as coronavirus infections surge and it takes time to roll out vaccinations. While global growth is still on course to rebound from the recession of last year, it may take longer to ignite and not be as healthy as previously forecast. The World Bank already this month trimmed its prediction to 4% in 2021 and the International Monetary Fund will this week update its own outlook. (Bloomberg)
     
  • US: Existing home sales unexpectedly climb 0.7% in Dec. Existing home sales in the US unexpectedly rebounded in the month of Dec, according to a report released by the National Association of Realtors. NAR said existing home sales climbed by 0.7% to an annual rate of 6.76m in Dec after tumbling by 2.2% to a revised rate of 6.71m in Nov. The rebound surprised economists, who had expected existing home sales to slump by 2.1% to a rate of 6.55m from the 6.69m originally reported for the previous month. With the unexpected monthly increase, existing home sales in December were up by 22.2% YoY. (RTT)
     
  • EU: Business activity shrinks in Jan as lockdowns hit services. Economic activity in the eurozone shrank markedly in Jan as stringent lockdowns to contain the coronavirus pandemic hit the bloc's dominant service industry hard. IHS Markit's flash composite purchasing managers' index (PMI) for the eurozone, fell further below the 50 mark separating growth from contraction to 47.5 in Jan from Dec's 49.1. A Reuters poll had predicted a fall to 47.6. (Reuters)
     
  • UK: Retail sales recovered weakly in Dec; borrowing jumped. British retailers struggled to recover in Dec from a partial coronavirus lockdown the previous month, marking a weak end to their worst year on record, while public debt climbed to its highest since 1962, official data showed. The figures bode poorly for Britain's economy in early 2021, which looks likely to have gone into reverse under pressure from new anti-Covid-19 measures introduced in Jan. (Reuters)
     
  • Hong Kong: Business expectations erode in 1Q. The share of Hong Kong businesses expecting their business situation to be worse in the first quarter of the year compared to the final three months of last year was higher than that expecting it to be better, survey data from the Census and Statistics Department showed. The net balance of business expectations weakened to -17 from -8 in the 4Q. (RTT)
     
  • Japan: Overall inflation sinks 1.2% on year in Dec. Overall consumer prices in Japan were down 1.2% on year in Dec, the Ministry of Internal Affairs and Communications said - following the 0.9% decline in Nov. Core consumer prices were down 1.0% on year after also slipping 0.9% in the previous month. Among the individual components, prices were down for fuel, food, medical care, transportation, education and recreation on a yearly basis. Prices were up for housing, furniture and clothing. On a seasonally adjusted monthly basis, overall inflation was down 0.1% and core CPI was flat. (RTT).

Markets

  • Serba Dinamik (Outperform, TP: RM2.23): Private placement oversubscribed by 1.85 times. Serba Dinamik’s proposed private placement involving 336.83m new shares was oversubscribed by 1.85 times. With the completion of the bookbuilding exercise, the issue price was fixed at RM1.51, representing a discount of 8.1% to the five-day VWAP and is expected to raise gross proceeds of RM508.61m. (The Edge)
     
  • FGV: Non-interested directors claim Felda offer is low. The non-interested directors of FGV Holdings have recommended the shareholders to reject the mandatory take-over offer by the Federal Land Development Authority due to the lower fair value offered at RM1.30. It was made after careful examination of the terms and conditions, rationale and future for FGV Group and its employees as disclosed in the offer document. (SunBiz)
     
  • PLS Plantations: To place out 19m new shares to Nazir Razak. PLS Plantations has proposed to place out up to 19m or about 5.23% and 3.61% of the issued shares under the minimum scenario of 363.20m shares and maximum scenario of 526.05m shares to Datuk Seri Nazir Razak at 95sen. The total cash consideration for the 19m new shares will be RM18.05m. PLS had also proposed to place up to 33.60m new shares, or up to 6.39% of the issued shares to third party investors at a later date and at an issue price. (StarBiz)
     
  • DNeX: Strengthens investment in upstream O&G. Dagang NeXchange (DNeX) has entered into a conditional share sale and purchase agreement (SSPA) with the other shareholders of Ping Petroleum Limited to acquire an additional 60% stake in Ping not owned by DNeX, for USD78m (RM314.3m). The acquisition is expected to be completed by 2QFY21 subject to all required approvals under the SSPA being obtained. Upon completion of the exercise, DNeX will own 90% of Ping. (SunBiz)
     
  • SC Estate Builder: Seeks to raise RM10.54m via private placement. SC Estate Builder has proposed a private placement of up to 20% to third party investors at an issue price to be determined later. Based on the indicative issue price of 5.5sen, the proposed private placement is expected to raise gross proceeds of RM10.54m. This enables the company to raise additional funds without incurring interest costs. (Bernama)
     
  • Tune Protect: Bolsters pact with BaoViet Insurance. Tune Protect has strengthened its reinsurance and technology partnership with BaoViet Insurance Corp through the offering of BambooCARE Travel Insurance for customers flying with Bamboo Airways on its flight booking portal. BaoViet Insurance is the oldest insurance company in Vietnam. It provides a wide range of insurance products leveraging technology to bring convenience and a seamless experience to meet the needs of clients. (Business TImes)
     
  • HB Global: To raise RM12.17m via private placement to repay creditors. HB Global is raising RM12.17m via a private placement to repay creditors, future investments and working capital. It would be issuing 93.6m placement shares or 20% at an indicative issue price of 13sen. It allocates RM4m to repay creditors. Meanwhile, RM2m cash advance for the repayments to other creditors and outstanding fees, and another RM2m for working capital requirements. (The Edge)

MARKET UPDATE

The FBM KLCI might open weaker today after US equities slipped on Friday as euphoria over President Joe Biden’s spending plans gave way to concerns that the final package may be pared down in order to pass through Congress. On Wall Street, the blue-chip S&P 500 slipped 0.3%, the first time last week the benchmark index has closed lower. The tech-heavy Nasdaq Composite, meanwhile, traded flat. Scepticism has grown in recent days about the Democratic Party’s ability to get sufficient support to pass the entire USD1.9trn package put forward by the Biden administration, given the pushback from Republican lawmakers about the plan. Economists at Oxford Economics expect Congress to eventually pass a USD1.2trn programme some time in the first quarter. The decline in New York followed selling in Europe, where the continent-wide Stoxx 600 closed down 0.6% and the UK’s FTSE 100 benchmark fell 0.3%. Germany’s Xetra Dax lost 0.2% and France’s CAC 40 moved 0.6% lower.

Back home, the FBM KLCI snapped its six-day losing streak after closing up 1.94 points or 0.12% at 1,596.74 while Bursa Malaysia’s Technology index rose 3.44% to become the top percentage gainer among bourse gauges as investors weighed the economic impact from the reinforcement of Malaysia’s Movement Control Order (MCO) across all States and Federal Territories except Sarawak to control the Covid-19 outbreak. In the region, Hong Kong’s Hang Seng index fell 1.6%, Japan’s benchmark Topix slipped 0.2% and South Korea’s Kospi 200 lost 0.6%.

Source: PublicInvest Research - 25 Jan 2021

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