PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 15 Oct 2021, 9:35 AM


PublicInvest Research Headlines - 2 Feb 2021

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EU: Factory recovery faltered in Jan but still strong – PMI. EU manufacturing growth remained resilient at the start of the year but the pace waned from Dec as renewed lockdown measures across the continent, alongside supply shortages, hurt activity, a survey showed. With coronavirus infections soaring again in Europe countries have forced vast swathes of the bloc’s dominant service industry to shut their doors, leaving manufacturing to support the economy as factories have largely remained open. IHS Markit’s final Manufacturing PMI fell to 54.8 in Jan from Dec’s 55.2, although that was a touch above the initial 54.7 “flash” estimate. (Reuters)

EU: Jobless rate remains stable in Dec. The EU unemployment rate remained stable in Dec despite restrictions imposed to curb the spread of Covid-19, data from Eurostat revealed. The jobless rate came in at 8.3%, unchanged from Nov and in line with economists' expectations. The number of unemployed increased by 55,000 from Nov. Unemployment totalled 13.671m in Dec. Compared with Dec 2019, unemployment rose 1.516m. (RTT)

EU: German retail sales decline sharply in Dec. German retail sales decreased sharply in Dec due to the restrictions imposed to control the spread of the coronavirus, data from Destatis revealed. Retail turnover fell 9.6% MoM in Dec, reversing a 1.1% rise in Nov. This was the first fall in three months and much bigger than the economists' forecast of -2.6%. On a yearly basis, retail sales growth slowed to 1.5% from 5% in Nov. This was the slowest increase in the current eight-month sequence of growth. Economists had forecast sales to climb again by 5%. (RTT)

UK: Factory growth slows as Covid and Brexit combine – IHS Markit. British manufacturers suffered a double hit in Dec as Covid-19 disruption to global shipping combined with new trade barriers with the EU. Separate data from the Bank of England showed a record fall in borrowing by consumers in Dec, potentially paving the way for a spending rebound once the pandemic eases. But for now the data paints a picture of a British economy that is struggling in early 2021 as finance minister Rishi Sunak considers whether to extend his emergency support programmes. Data firm IHS Markit said its monthly survey of the factory sector showed a hit to new export orders, signs of supply chain problems and inflation pressure. (Reuters)

UK: Mortgage approvals decline in Dec. UK Mortgage approvals declined moderately in Dec, the Bank of England (BoE) said. The number of mortgages approved in Dec fell to 103,400 from 105,300 in Nov. But this was well above the Feb's level of 73,400. Recent strength in approvals has more than offset the significant weakness earlier in the year. House purchase approvals after having troughed at a record low of 9,400 in May, totaled 818,500 in 2020, the largest number in one year since 2007, data showed.. (RTT)

China: January factory activity expands at slowest pace in 7 months – Caixin PMI. China’s factory activity expanded at the slowest pace in seven months at the start of 2021, weighed down by falling export orders amid a surging global pandemic and rising costs, a business survey showed. The slowdown in the manufacturing sector underscores the fragility of the ongoing economic recovery in China, as Beijing grapples with a resurgence of local Covid-19 cases in northern China and navigates rising tensions with Washington and its allies. cThe Caixin/Markit Manufacturing PMI dropped to 51.5 last month, the lowest level since June last year and easing markedly from December’s reading of 53.0. The survey broadly aligned with Beijing’s official PMI, which showed the recovery in factory activity slowing as Covid-19 cases rose. (Reuters)

Japan: Manufacturing PMI slips into contraction in Jan – Jibun Bank. The manufacturing sector in Japan fell into contraction in Jan, the latest survey from Jibun Bank showed with a PMI score of 49.8. That is down from 50 in December. Individually, output and employment contracted, while new orders stabilized following a two year decline. Businesses remain optimistic about output. Input cost inflation strengthened further in January. The pace of inflation was solid overall and was the strongest since May 2019. (RTT)

India: Manufacturing growth improves in Jan. India's manufacturing sector grew at a faster pace in January, survey results from IHS Markit showed. The headline IHS Markit manufacturing PMI, rose to 57.7 in Jan from 56.4 in Dec. Economists had expected a score of 56.0. New business inflows expanded at a faster rate in Jan, which was the quickest in three months, and output increased. New export orders continued to increase in Jan with the pace of expansion solid and quickening from the previous month. Jobs declined in Jan, though the pace of contraction was modest and the slowest in the ten month sequence of reduction. Stocks of purchases increased sharply in Jan. The quantity of purchases rose and the pace of expansion was the second-strongest in under nine years. (RTT)


Sunway: Buys Cheras Land for RM42m. Sunway has signed a sale and purchase agreement with CTM Development SB to acquire a 1.35-hectare freehold land in Cheras here for RM42m. Sunway said the prime freehold land in the matured neighbourhood of Taman Mutiara, Kuala Lumpur was purchased for a development of townhouse and condominium, with consideration of new norm lifestyles. The company said the land was acquired with an approved development order secured, which will accelerate the development’s speed to market. The development is expected to be ready for launch by the first half of 2022 with the expected completion in 2026, contributing positively to Sunway’s earnings from 2022. (Bernama)

Mestron: Clarifies it does not have MoH's approval to distribute Covid-19 vaccines in Malaysia . Mestron Holdings has issued a clarification to say that it did not obtain approval or a clearance letter from the Ministry of Health (MoH) to purchase or distribute Covid-19 vaccines in Malaysia. Instead, it clarified that its intention is to explore and venture into the vaccine distribution business by partnering with China-based Zhongyu Yexing (Chengdu) Industrial Co Ltd. (The Edge)

Iris: Secures RM1.16bn immigration system contract . Iris Corp said it has secured an immigration system contract from the government worth RM1.16bn. Its wholly-owned subsidiary Iris Information Technology Systems SB received a letter of award from the Ministry of Home Affairs to develop and deliver the immigration system. The contract will be for a period of 54 months until Aug 31, 2025. (The Edge)

Jerasia Capital: Plans private placement, rights issue with warrants for glove-making venture . Jerasia Capital has proposed to further expand into personal protection equipment (PPE) with the manufacturing and trading of gloves and will undertake a private placement and rights issue with warrants to fund the venture. Its group managing director Pronob Sen Gupta opined that the expansion will provide synergy as it had expanded its product portfolio to develop, produce and supply PPE on July 3, 2020. “The glove business venture will allow us to take advantage of favourable long-term prospects for the glove industry and capitalise on the burgeoning demand for gloves while making the most out of the opportunities created by the Covid-19 pandemic,” Pronob said. (SunBiz)

Uchi Technologies: Unit stops production after 15 employees test positive for Covid-19 . Uchi Technologies said 15 employees of its subsidiary Uchi Optoelectronic (M) SB (UOM) have tested positive for Covid-19. The Penang-based group said UOM started a mass screening process for its employees, after the acknowledgement of a confirmed Covid-19 case from a contractor on Jan 25. (The Edge)

KTG: Plans private placement to raise up to RM29.5m . KTG has proposed a private placement of up to 20% of its shares to raise as much as RM29.5m to finance the moneylending and glove manufacturing businesses that it recently ventured into. Up to 134.09m shares will be placed out to investors to be identified later at an issue price to be fixed later, the loss-making ceramics and pottery products manufacturer said. (The Edge)

Market Update

The FBM KLCI might open higher today as US equities notched their biggest gain in more than two months on Monday, regaining lost ground after the struggle between Reddit’s day traders and Wall Street institutions helped to send stocks to their worst week since October. The blue-chip S&P 500 index closed higher by 1.6%, while the tech-heavy Nasdaq Composite rose more than 2.6%, boosted by rallies in tech giants such as Alphabet and Amazon, which are due to report earnings this week. Equities bounced back as investors looked past the trading tussle to focus instead on promising vaccine news on both sides of the Atlantic. Further progress was being made in Europe in a dispute between the EU and AstraZeneca over the terms of a supply deal for Covid- 19 vaccines. The drugmaker agreed to provide the bloc with 9m more jabs by March. The region-wide Stoxx Europe 600 index closed up 1.2%, having fallen more than 3% last week, while London’s FTSE 100 climbed 0.9% and Frankfurt’s Xetra Dax rose 1.4%. In the region, China’s CSI 300 index rose 1.2%, Hong Kong’s Hang Seng gained 2.2% and South Korea’s Kospi advanced 2.7%.

Source: PublicInvest Research - 2 Feb 2021

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