PublicInvest Research

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


PublicInvest Research Headlines - 18 Feb 2021

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US: Retail sales spike 5.3% in Jan, much more than expected. The Commerce Department released a report showing retail sales rebounded by much more than anticipated in the month of Jan. The retail sales spiked by 5.3% in Jan after sliding by a revised 1% in Dec. Excluding a 3.1% jump in sales by motor vehicle and parts retailers, retail sales still soared by 5.9% in Jan after tumbling by a revised 1.8% in Dec. The sales by department stores skyrocketed by 23.5%. (RTT)

US: Manufacturing production rises solidly despite semiconductor shortage. Output at US factories increased more than expected in Jan even as a shortage of semiconductors weighed on the production of motor vehicles, pointing to resilience in the manufacturing sector recovery. Manufacturing production rose 1% last month after gaining 0.9% in Dec, the Federal Reserve said. Manufacturing has powered ahead as the pandemic left Americans grounded at home, shifting demand to household goods from services. (Reuters)

US: Business inventories rise solidly in Dec. US business inventories increased solidly in Dec, with stocks at retailers larger than initially estimated. Business inventories rose 0.6% in Dec after gaining 0.5% in Nov, the Commerce Department said. Inventories are a key component of GDP. Inventories fell 2.6% on a YoY basis in Dec. Retail inventories increased 1.2% in Dec, instead of 1.0% as estimated in an advance report published last month. That followed a 0.7% rise in Nov. (Reuters)

US: Producer prices post biggest gain since 2009. US producer prices increased by the most since 2009 in Jan as the cost of goods and services surged, suggesting inflation at the factory gate was starting to creep up. The producer price index for final demand jumped 1.3% last month, the Labor Department said. That followed a 0.3% rise in Dec. In the 12 months through Jan, the PPI accelerated 1.7% after rising 0.8% in Dec. A 1.3% rise in the prices of services accounted for two-thirds of the increase in the PPI. (Reuters)

US: Industrial production climbs more than expected in Jan. Industrial production in the US saw another notable increase in the month of Jan, according to a report released by the Federal Reserve. The industrial production climbed by 0.9% in Jan after jumping by a downwardly revised 1.3% in Dec. The bigger than expected increase in industrial production came as manufacturing output surged up by 1% in Jan after climbing by 0.9% in Dec. Mining output also spiked by 2.3% in Jan while utilities output slumped by 1.2%. (RTT)

US: Homebuilder confidence unexpectedly inches higher in Feb. Homebuilder confidence in the US has unexpectedly seen a modest improvement in the month of Feb, the National Association of Home Builders revealed in a report. The NAHB/Wells Fargo Housing Market Index inched up to 84 in Feb after falling to 83 in Jan. The unexpected uptick in homebuilder confidence came as strong buyer demand helped offset supply chain challenges and a surge in lumber prices. (RTT)

EU: Construction output drops in Dec. Eurozone's construction output dropped for the first time in three months in Dec, data form Eurostat showed. The construction output decreased 3.7% MoM in Dec, after a 2.3% growth in Nov. Production in building construction declined 3.8% monthly in Dec and output in civil engineering fell 3.4%. On a YoY basis, the construction output fell 2.3% in Dec, following a 0.6% decrease in the prior month. In the EU27, construction output decreased 3.3% monthly, and fell 2.1% from a year ago. (RTT)

EU: New car sales drop by 25.7% YoY in Jan - ACEA. European car registrations dropped in Jan, industry data showed, as measures to restrict a second coronavirus wave hit sales in the region’s largest markets. New car registrations dropped by 25.7% YoY to 842,835 vehicles in the European Union, Britain and the countries of the European Free Trade Association (EFTA), figures from the European Automobile Manufacturers’ Association (ACEA) showed. All of Europe’s five largest markets posted declines. (Reuters)

UK: Inflation heads up as locked-down consumers spend from home. British inflation edged up in Jan as consumers hunkered down with new sofas and duvets and spent more on food, video games and other home entertainment as they went into a third national coronavirus lockdown. Annual consumer price inflation rose to a three-month high of 0.7% last month, and many economists expect it to overshoot the Bank of England’s 2% target later this year as temporary tax cuts and a cap on household fuel bills expire. (Reuters)

UK: House prices rise at fastest rate in six years. British house prices rose at the fastest rate in more than six years at the end of 2020, official figures showed on Wednesday, extending a surge driven by a temporary tax break and demand for more spacious housing since the start of the Covid-19 pandemic. The Office for National Statistics said house prices in Dec were 8.5% higher than a year earlier, compared with a 7.1% increase in Nov, the biggest YoY rise since Oct 2014. (Reuters)

Japan: Trade deficit JPY323.9bn in Jan. Japan posted a merchandise trade deficit of JPY323.9bn in Jan, the Ministry of Finance said. That beat forecasts for a shortfall of JPY600bn following the JPY751bn surplus in Dec. In Jan 2020, the trade deficit was JPY1,315.111bn. Exports advanced 6.4% on year to JPY5,779.832bn, shy of expectations for an increase of 6.6% but still up from 2% in the previous month. Exports to Asia were up 19.4% on year to JPY3,365.713bn, while exports to China alone surged 37.5% to JPY1,232.632bn. (RTT)

Japan: Dec core machinery orders rise 5.2%. Japan’s core machinery orders rose 5.2% in Dec from the previous month, up for the third straight month, government data showed. Manufacturers surveyed by the Cabinet Office forecast that core orders will fall 8.5% in Jan-March, after advancing 16.8% in the previous quarter. Compared with a year earlier, core orders, a highly volatile data series regarded as an indicator of capital spending in the coming six to nine months, rose 11.8% in Dec, the Cabinet office data showed. (Reuters)

Singapore: Non-oil domestic exports jump 7% in Jan. The value of non-oil domestic exports from Singapore climbed a seasonally adjusted 7% on month in Jan, Enterprise Singapore said, coming in at SGD15.4bn. That beat expectations for an increase of 2% and was up from 4.8% in Dec, which had a value of SGD14.4bn. On a yearly basis, non-oil domestic exports spiked 12.8% and up from the 6.8% jump in the previous month. The increase was mainly due to electronics, specialized machinery, non-monetary gold and petrochemicals. (RTT)


MGB: Bags RM443m contract to develop affordable homes in Selangor. MGB has bagged a RM442.81m contract to construct affordable home projects in Dengkil and Ijok in Selangor. The group said it was awarded the contract by Seloka Sinaran SB (SSSB) and Kemudi Ehsan SB (KESB). Both SSEB and KESB are subsidiaries of LBS Bina Group. LBS also owns the majority of MGB shares. MGB said the projects entail the construction of two blocks of Rumah Selangorku Idaman MBI in Dengkil and Ijok. Work will commence on March 1 and is expected to be completed on July 31, 2023. With the contract in hand, the group’s outstanding order book is RM2.1bn, MGB said. (The Edge)

Datasonic: To supply six additional e-gate system to Immigration. Datasonic said the governmet has ordered six additional electronic-gate system (e-gate) from the company for an extra RM1.68m. This is on top of the original RM6.98m contract to supply 16 units of foreigner e-gate with facial recognition system at the Malaysia-Singapore entry/exit point to the Immigration Department. The additional order lifted the contract value to RM8.65m. (StarBiz)

Mr DIY: Posts 19% rise in 4Q net profit on stronger revenue, declares 0.7sen dividend. Mr DIY Group posted a 19% YoY increase in net profit to RM108.27m for its 4QFY20. Quarterly revenue grew 25% YoY to RM768.33m. It also declared an interim dividend of 0.7 sen per share. The group attributed the increase in revenue to a rise in average monthly sales per store, as well as sales contribution from the 141 net new stores added during the year, an increase of about 24% from FY19. This contributed to better profitability for the quarter, which was also supported by higher annual purchase incentives in 4QFY19. (The Edge)

Hup Seng Industries: Records 20% YoY decline in 4Q net profit. Hup Seng Industries registered flattish revenue growth YoY in 4QFY20, at RM87.7m. Domestic sales were up by 7% YoY, but the positive effect was offset by a decline in export sales of 16% YoY. The Group cited that its export sales were also negatively affected by the global shipping container shortage. Its profit, however, was down by 20% YoY to RM9.9m, mainly due to higher cost for certain raw materials during the quarter. The Group is committed to stay vigilant and cautious during these testing times, and will continue to improve product quality, innovate new products, reduce costs as well as broadening distributor network to safeguard revenue. (Bursa Malaysia)

Automotive (Neutral): Malaysia’s new vehicles sales shrink 24% units in January. Malaysia's new vehicle sales shrank 24% YoY to 32,829 units in January, as traffic volume to showrooms dropped due to the MCO. MoM, total sales had plunged 51% over December 2020 number, according to the Malaysian Automotive Association (MAA). The MAA expects February sales to be lower due to short working month. "Most customers had been brought forward in December 2020, resulting in lower stocks for January for some companies." The impact from shutdown of some part suppliers due to Covid-19 had resulted in short supply of components and parts for some companies, the MAA added. (Business Times)

Market Update

The FBM KLCI might open lower today after global equity markets pulled back on Wednesday from the record high hit in the previous session as investors sold technology-related companies and the prospect of rising inflation tempered optimism around a vaccine-led global economic recovery. Data on Wednesday showed US retail sales rebounded sharply in January after households received additional pandemic relief money from the government, suggesting a pick-up in economic activity after the restraints imposed by a fresh wave of COVID-19 infections late last year. On Wall Street, the Nasdaq fell as concerns about inflation pressured stocks and as investors rotated out of technology shares. The Dow Jones Industrial Average rose 90.27 points, or 0.29%, to close at 31,613.02, the S&P 500 lost 1.26 points, or 0.03%, to end at 3,931.33 and the Nasdaq Composite dropped 82.00 points, or 0.58%, to finish at 13,965.50. European shares retreated from near one-year highs as concerns about a possible rise in inflation tempered optimism about a vaccine-led global economic recovery, while Kering tumbled after sales at its Gucci brand fell more than expected. The pan-European STOXX 600 index closed down 0.74%.

Back home, the FBM KLCI finished 0.68% or 10.85 points lower at 1,595.29, led by selldowns in Axiata Group Bhd, Hap Seng Consolidated Bhd and Petronas Chemicals Group Bhd (PetChem). The FBM KLCI's decline was in line with those seen among other regional indices. Japan's Nikkei 225 was down 0.58% or 175.56 points at 30,292.19. South Korea's Kospi was down 0.93% or 29.52 points at 3,133.73. Meanwhile, the Hong Kong's Hang Seng was up 1.10% or 338.28 points at 31,084.94. Markets in Mainland China are closed for the Lunar New Year holiday.

Source: PublicInvest Research - 18 Feb 2021

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