PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 21 Jun 2021, 11:47 AM


PublicInvest Research Headlines - 3 Mar 2021

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US: Imports at full speed show uneven global recovery pace. A surge of imports into the US economy shows little sign of slowing down, clogging American ports and highlighting ways the pandemic is still causing imbalances in the global recovery. Consider the number of inbound shipping containers through the 10 largest US ports. They rose 12.5% YoY in Jan, after a 23% surge a month earlier and a 25% jump in Nov, according to Blue Alpha Capital (Bloomberg)

EU: German retail sales fall more than expected. Germany's retail sales decreased for a second straight month and at a faster than expected pace in Jan, preliminary figures from Destatis showed. Retail sales fell 4.5% MoM, which was worse than the 0.3% decline economists had expected. In Dec, sales decreased 9.1%. Sales dropped 8.7% YoY, while economists had forecast a 1.3% gain. In Dec, sales grew 2.8%. The latest annual decline was the first since April last year, when sales fell 5.6%. These results can be explained by the second Covid-19 lockdown, which led to a partial retail closure starting on Dec 16, 2020, Destatis said. (RTT)

EU: German unemployment unexpectedly rises as lockdown persists. German joblessness unexpectedly rose for the first time in eight months, adding to strains Europe’s largest economy is facing due to protracted coronavirus lockdowns. The rise of 9,000 put the total number of unemployed people at 2.75m and the rate at 6%, according to the Federal Labor Agency. The blow is being cushioned by government subsidies to enable companies to hold on to staff. More than 2m workers benefited from a generous furlough program in Jan, according to the latest estimates by the Ifo Institute,. (Bloomberg)

EU: Italy likely to seek extra stimulus as virus outlook worsens. Italy’s new government may soon seek parliamentary approval for more stimulus spending as a sluggish vaccination campaign and new coronavirus strains extend the nation’s reliance on fiscal support. Prime Minister Mario Draghi’s administration is planning to distribute about EUR32bn (USD38bn) that was approved by the parliament in Jan through a new decree called “sostegno” or support. While that spending could be finalized in coming days, it will likely run out shortly. (Bloomberg)

EU: Inflation steady at 0.9% in Feb. Eurozone consumer price inflation was stable in Feb, while core price growth slowed, flash figures from Eurostat showed. The consumer price index rose 0.9% YoY, same as in Jan, and in line with economists' expectations. Inflation was in positive territory for a second straight month. Core inflation eased to 1.1% from 1.4% in Jan. This also matched economists' expectations. Compared to the previous month, consumer prices rose 0.2% in Feb, same as in Jan. The food, alcohol & tobacco component registered the highest annual rate of increase in Feb, 1.4% versus 1.5% in Jan. (RTT)

UK: House price inflation accelerates unexpectedly. UK house price inflation accelerated in Feb, defying expectations for further slowing, survey data from the Nationwide Building Society showed. The house price index rose 6.9% YoY following 6.4% rise in Jan. Economists had expected the rate to ease to 5.6%. Compared to the previous month, the HPI rose 0.7% in Feb after a 0.2% drop in Jan. The average price of a UK home was a record GBP231,061 in Feb. This seemed more likely that annual price growth would soften further ahead of the end of the stamp duty holiday. (RTT)

Japan: Capex extends declines as firms tighten purse strings. Japanese companies slashed spending on plant and equipment for the third straight quarter in Oct -Dec as manufacturers cut costs, casting doubt about the strength of the country’s recovery as the Covid-19 pandemic hits private demand. Weakness in capital expenditure is likely to worry policymakers counting on private-sector investment to help the world’s third-largest economy decisively shake off the health crisis. Capital spending fell 4.8% in Oct - Dec compared with the same period a year earlier, Ministry of Finance data showed. (Reuters)

Australia: Services sector slows in Feb. The services sector in Australia continued to expand in Feb, albeit at a slightly slower pace, the latest survey from Markit Economics showed with a services PMI score of 53.4. That's down from 55.6 in Jan, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction. Individually, activity and new business saw sustained gains, while there was a series-record increase in employment. Business sentiment was at its strongest in more than two years. Stringent international border restrictions reduced export orders for the thirteenth month running. (RTT)

Philippines: Producer prices fall further. Philippines producer prices declined further in Jan, data from the Philippine Statistical Authority showed. The producer price index decreased 5.3% YoY in Jan, following a 3.8% fall in Dec. Prices for manufacture of coke and refined petroleum products declined 27.5% yearly in Jan, while those for manufacture of tobacco products grew 3.4%. On a monthly basis, producer prices fell 1.7% in Jan, after a 0.9% growth in Dec. Among the components of the producer price index, the prices of manufacture of computer, electronic and optical products fell 11.7% monthly in Jan. (RTT)


TNB (Outperform, TP: RM12.42): Sunseap, Tenaga Nasional in JV to trial import of clean energy from Malaysia . Sunseap Group and TNB announced that they intend to form a JV to trial the import of electricity from Malaysia. The trial was announced by the Energy Market Authority in October 2020 to diversify Singapore's energy supply by tapping regional power grids for cleaner energy resources. Singapore will import 100 MegaWatt of electricity generated from renewable energy sources and if successful, the JV will invest in multiple solar farms across Malaysia and other forms of clean energy such as hydroelectricity, from TNB's existing plants. (Business Times)

Grand-Flo: Proposes two property acquisitions after posting higher net profit in FY20 . Grand-Flo is planning to buy two properties in Genting Highlands — the land and project development rights of an ongoing mixed development known as Grand Ion Majestic (GIM), and the adjacent serviced apartments and commercial lots of a completed project known as Grand Ion delemen (GID) — for RM422.89m. At the same time, it has proposed to undertake private placement exercises to raise over RM75m to fund its current and upcoming property development projects. (The Edge)

Techfast: Ventures into petroleum trading, oil bunkering biz. Techfast Holdings is proposing to diversify into the trading of petroleum products, oil bunkering and other related businesses. ED Vincent Tan Wye Chuan said the business diversification will reduce the company’s sole reliance on its existing manufacturing business. "We have big plans to grow this business as we aim to become a leading bunker supplier in Malaysia. "A new subsidiary, Fast Energy SB (FESB) has been established to undertake the provision of bunkering services, vessel chartering and other related activities," he said. (StarBiz)

Kanger International: Bags RM478m contract to build two blocks of apartments in Genting Highlands. Kanger International's wholly owned unit has bagged a contract to build two blocks of serviced apartments totalling RM478m in Genting Highlands. Its subsidiary Kanger Ventures SB, which has entered into a collaboration agreement with Vegetta Champion SB, will be responsible for the entire project management, financial and entire administration of this development. The project is expected to commence in June 2021 and will take approximately 48 months to be completed. (The Edge)

Mieco Chipboard: Proposes 3-for-5 bonus issue; share price hovers near 3-year high. Mieco Chipboard has proposed a 3- for-5 bonus issue which entails the issuance of 315m shares in the company, it said. As at the last practicable date prior to the announcement, Mieco had an issued share capital of 525m shares amounting to RM215.87m. Mieco expects the bonus issue to be completed in the second quarter of 2021. (The Edge)

Advancecon: Bags RM14.6m ECRL subcontract . Advancecon Holdings said it has been appointed a subcontractor for ground treatment works for Section 4 of the East Coast Rail Link (ECRL) project for RM14.6m. Advancecon said its wholly-owned unit Advancecon Infra SB (AISB) has accepted the Letter of Acceptance from China Communications Construction (ECRL) SB for the appointment. AISB is principally involved in the business of providing earthworks and civil engineering services, it said. (The Edge)

Market Update

The FBM KLCI might retreat at opening today after US stocks pulled back from the biggest daily rise in almost nine months as concerns around inflated valuations began to weigh on investor confidence. The S&P 500 closed down 0.8%, a day after the blue-chip index’s best performance since June. The tech-focused Nasdaq Composite dropped 1.7%, falling back from a 3% rally on Monday. Some of Wall Street’s high-flyers led the decline on Tuesday, with the electric car maker Tesla sliding 4.5%. Shares in the streaming tech provider Roku tumbled 7.3%, and the video conferencing platform Zoom was down 9% by the time the closing bell rang. In Europe, the region-wide Stoxx 600 closed up 0.2%, building on the benchmark’s best performance in four months on Monday. London’s FTSE 100 index rose 0.4% while Frankfurt’s Xetra Dax climbed 0.2%. According to data released on Monday, the European Central Bank bought €12bn of bonds under its pandemic emergency purchase programme in the week to Wednesday last week, which was down from €17.3bn the preceding week and below the €18.1bn weekly average since the programme began in March last year.

Back home, the FBM KLCI closed higher by 0.17% or 2.73 points to end at 1,569.87 points. Among the 30 FBM KLCI constituents, 18 stocks were higher; nine were lower while three traded flat. Gains were led by IHH Healthcare Bhd, which jumped 21 sen or 3.97% to RM5.50, followed by Dialog Group Bhd and MISC Bhd. Across the region, Japan's Nikkei 225 fell 0.86% while South Korea's Kospi gained 1.03%. In China, Hong Kong’s Hang Seng dropped 1.21% while the Shanghai Stock Exchange Composite Index closed down 1.21%.

Source: PublicInvest Research - 3 Mar 2021

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