PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 4 Aug 2021, 9:44 AM


PublicInvest Research Headlines - 23 Feb 2021

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US: Leading economic index climbs more than expected in Jan. Suggesting economic growth should improve gradually over the first half of 2021, the Conference Board released a report showing a bigger than expected increase by its index of leading US economic indicators in the month of Jan. The Conference Board said its leading economic index climbed by 0.5% in Jan after rising by an upwardly revised 0.4% in Dec. Economists had expected the leading economic index to rise by 0.3%, matching the increase originally reported for the previous month. "As the vaccination campaign against COVID-19 accelerates, labor markets and overall growth are likely to continue improving through the rest of this year as well," said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. He added, "The Conference Board now expects the US economy to expand by 4.4% in 2021, after a 3.5% contraction in 2020." (RTT)

EU: German economy set to resume recovery: Bundesbank . The German economy is likely to recover from this spring after an estimated contraction in the first quarter of 2021, Bundesbank said in its monthly report released. The bank noted that the second wave of Covid-19 pandemic thwarted Germany's economic recovery at end of 2020. Economic activity was still almost 4% down on the pre-crisis level of the fourth quarter of 2019.. (RTT)

EU: ECB getting uncomfortable with rise in yields . The European Central Bank is "closely monitoring" the recent rise in government bond yields, ECB President Christine Lagarde said, the clearest sign yet that policymakers are becoming uncomfortable with the recent surge in borrowing costs. Euro zone bond yields have risen sharply since the start of the year, mirroring a similar move in US Treasuries, but the ECB has so far played down these moves, arguing that nominal yields are not necessarily an appropriate benchmark. (Reuters)

EU: German business morale rises thanks to robust industry . German business morale rose by far more than expected in Feb, hitting its highest level since Oct as the industrial sector powered along Europe’s largest economy despite lockdown restrictions, a survey showed. The Ifo institute said its business climate index increased to 92.4 from an upwardly revised 90.3 in Jan. A Reuters poll of analysts had pointed to a Feb reading of 90.5. (Reuters)

China: Returns as top India trade partner even as relations sour . China regained its position as India’s top trade partner in 2020, as New Delhi’s reliance on imported machines outweighed its efforts to curb commerce with Beijing after a bloody border conflict. Two-way trade between the longstanding economic and strategic rivals stood at USD77.7bn last year, according to provisional data from India’s commerce ministry. (Bloomberg)

Japan: Services producer prices fall for fourth month . Japan's services producer prices declined for the fourth straight month in Jan, data released by the Bank of Japan showed. The services producer price index fell 0.5% YoY in Jan, following a 0.3% decline in Dec. This was the fourth consecutive month of decline. On a monthly basis, services producer prices dropped 0.6%, after a 0.2% rise in the previous month. Excluding international transportation, services producer prices decreased 0.1% annually in Jan, after a 0.1% fall in the prior month. (RTT)

South Korea: Consumer confidence index rises in Jan – BoK . Consumer confidence in South Korea improved in Jan, the latest survey from the Bank of Korea showed with a sentiment index score of 97.4 - up from 95.4 in Dec. Consumer sentiment regarding current living standards was one point higher than in Jan at 87, and that concerning the future outlook for living standards was also one point higher than in the previous month at 94. Consumer sentiment related to future household income was unchanged at 96, and that concerning future household spending was two points higher at 104. (RTT)

Hong Kong: Record budget deficit limits room for new stimulus. Hong Kong is heading for a record budget deficit, leaving little room for the kind of cash handouts and stimulus Financial Secretary Paul Chan doled out in 2020 during the coronavirus outbreak. Chan is expected to deliver a muted budget Wednesday as he tries to balance fiscal pressures with the demands of an economy that’s shrunk two years in a row already. (Bloomberg)


Pansar: Closer to realising its acquisition growth plans. Pansar is one step closer in realising its business diversification plans to include construction and civil engineering. Pansar announced its price-fixing and implementation timeline for its rights issue exercise, which the company is raising approximately RM121m. (Business Times)

Kejuruteraan Asastera: Wins RM23.4m Agile Embassy Garden job. Kejuruteraan Asasetera (KAB) has secured a contract worth RM23.4m from CNQC Engineering & Construction (Malaysia) SB for design, supply and maintenance work in Agile Embassy Garden, KL. The contract will bring the group’s outstanding order book to approximately RM390m. (The Edge)

Xian Leng: Gets UMA query as share price hits 15-year high. Xian Leng Holdings has been slapped with an unusual market activity query by Bursa Malaysia over the sharp rise in its share price and volume. Over the past week, the stock had risen 62sen or 63.3% from 98 sen. Since the beginning of this year, it has gained 181%. Earlier this month, Xian Leng had proposed a private placement of up to 20% of its issued shares. (The Edge)

Petronas Gas: To build RM541m pipeline for power plant in Pulau Indah. Petronas Gas has approved a final investment decision for the construction of a new lateral gas pipeline costing RM541.07m. The pipeline is approx. 42km and will utilise gas tapped from the existing Peninsular Gas Utilisation II pipeline network. The natural gas will be transported to a prospective 1,200 MW gas-fired. (Bernama)

Sarawak Cable: Proposes 30% private placement to improve business growth. Sarawak Cable has proposed to undertake a private placement of up to 30% of the total number of shares in the company. The exercise might raise gross proceeds of up to RM41.34m, intended to be used for working capital based on an indicative issue price of RM0.43 per share. (Bernama)

KPower: Quarterly profit surges 400% on higher revenue. KPower saw its net profit surge nearly 400% to RM9.25m for the 2Q ended Dec 31, 2020 from RM1.86m a year earlier. Quarterly revenue jumped 560% to RM90.06m, contributed by the group’s construction related activities, as well as property development and investment, and healthcare segments. (The Edge)

Tiong Nam: 3Q net profit jumps 260% on growth in logistics, warehousing. Tiong Nam Logistics Holdings net profit jump 259.6% to RM6.4m in the 3Q ended Dec 31, 2020 from RM1.8m in the previous corresponding quarter. This was primarily driven by growth in the logistics and warehousing services segment alongside better cost management. (Business TImes)

Karex: Strong condom sales boost profit despite pandemic related disruptions. Karex saw its net profit grow 27 times to RM2.79m in the 2Q ended Dec 31, 2020, thanks to strong condom sales and noteworthy personal lubricant sales. Revenue rose 6.1% to a record high of RM115.75m. (The Edge)

Innature: Posted lower earnings impacted by Covid-19, store closures. Innature’s net profit fell 33.06% to RM7.72m for the FY20, compared with RM30.15m in the previous year, impacted by Covid-19, including the closure of all stores in Malaysia and Vietnam during the MCO. (Business TImes)

Market Update

The FBM KLCI might open down today after US technology stocks fell sharply on Monday as rising inflation expectations and long term interest rates undercut arguments for their high valuations. The technology-focused Nasdaq Composite closed down 2.5%, losing more ground than other benchmark indices. The blue-chip S&P 500 closed down 0.8%, while the Russell 2000 lost 0.7%. Facebook, Amazon, Apple, Netflix and Google parent Alphabet — collectively known as the FAANG stocks — all tumbled in what some investors said could be the beginning of an overdue correction. In Europe, the region-wide Stoxx 600 closed down 0.4% on Monday following three consecutive weekly gains. London’s FTSE 100 benchmark fell 0.1% while Frankfurt Xetra’s Dax was down 0.3%.

Back home, the FBM KLCI closed lower, dragged by glove counters and in line with a regional decline that was induced by a sudden increase in the US 10-year Treasury yields. The local benchmark index closed 0.91% or 14.47 points lower at 1,570.46. In the region, China’s CSI 300 index fell 3.1%, its biggest one-day drop since last summer, as concerns grew of a gradual tightening in lending conditions. Hong Kong’s Hang Seng lost 1.1% and South Korea’s Kospi 200 dropped 0.9%. Japan’s Topix gained 0.5%.

Source: PublicInvest Research - 23 Feb 2021

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