PublicInvest Research

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


PublicInvest Research Headlines - 11 Mar 2021

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US: Budget deficit tops USD1trn trillion this year, before stimulus. The US budget deficit surpassed USD1trn for the first five months of the fiscal year, reflecting government efforts to cushion the economy from the coronavirus even before a massive stimulus package deepens the shortfall. The gap for Feb was USD310.9bn, up from USD235.3bn in Feb 2020, according to a Treasury Department report. That pushed the deficit to USD1.05trn, a record for the first five months of the fiscal year that began in Oct, versus USD624.5bn a year earlier, before the coronavirus struck. President Joe Biden on Friday is set to sign into law USD1.9trn in economic relief. (Bloomberg)

US: Consumer price growth matches estimates in Feb. Consumer prices in the US increased in line with economist estimates in the month of Feb, according to a report released by the Labor Department. The consumer price index climbed by 0.4% in Feb after rising by 0.3% in Jan. The increase in prices matched expectations. Gasoline prices led the way higher once again, surging up by 6.4% in Feb following a 7.4% spike in Jan. Excluding food and energy prices, core consumer prices inched up by 0.1% in Feb after coming in unchanged for two straight months. Economists had expected core prices to rise by 0.2%. (RTT)

EU: ECB draft forecasts assume any inflation pickup will be fleeting. T he European Central Bank’s forecasts this week are likely to justify the current stimulus program with a cautious view that envisages no sustained jump in inflation, according to officials with knowledge of the matter. The outlook that will be presented to policy makers assumes that hoarded savings won’t be depleted in a sudden consumption boom when lockdown restrictions ease, said the officials. The ECB’s forecasts assume spikes in consumer prices at the start of the year will be temporary, speeding up inflation in 2021 but not in subsequent years, the officials said. (Bloomberg)

EU: Greece consumer prices fall; industrial production growth slows. Greece's consumer prices declined further in Feb, data from the Hellenic Statistical Authority showed. Industrial production grew at a softer pace in Jan, separate report from the statistical office revealed. The consumer price index fell 1.3% YoY in Feb, following a 2% decline in Jan. Prices for transportation declined 4.3% annually in Feb. Prices of housing equipment decreased 2.2% and housing cost fell 1.9%. On a monthly basis, consumer prices fell 0.9% in Nov, after a 0.3% growth in the prior month. The EU measure of harmonized index of consumer prices fell 1.9% in Feb. (RTT)

EU: Italy producer prices continue to fall. Italy's producer prices continued to decline in Jan, data from the statistical office Istat showed. The producer price index decreased 0.3% YoY in Jan, following a 1.8% fall in Dec. On a monthly basis, producer prices rose 1.4% in Jan, following a 0.5% increase in the preceding month. In the domestic market, producer prices grew 1.7% MoM and declined by 0.4% from a year ago in Jan. Producer prices in the foreign market increased 0.7% monthly in Jan and decreased 0.3% yearly. (RTT)

EU: France industrial production recovers in Jan. France's industrial production rebounded at a faster than expected pace in Jan, data from the statistical office Insee showed. Industrial production grew 3.3% MoM in Jan, reversing a 0.7% fall in Dec. Economists had forecast an increase of 0.5%. Manufacturing output also expanded 3.3%, in contrast to Dec's 1.4% fall. The growth was largely driven by an 8.4% rise in machinery and equipment goods production and 7.2% rise in coke and refined petroleum products output. Compared to Feb 2020, output remained lower in the manufacturing industry by 2.6% and by 1.7% in the whole industry. (RTT)

China: Feb new bank loans fall to CNY1.36trn, beat forecast. Chinese banks extended CNY1.36trn (USD208.86bn) in new local currency loans in Feb, down from Jan but exceeding analyst expectations. Analysts had predicted new yuan loans would fall to CNY950bn in Feb, down from CNY3.58trn in the previous month and compared with CNY905.7bn a year earlier. Broad M2 money supply in Feb grew 10.1% from a year earlier, central bank data showed, above estimates of 9.4% forecast. It rose 9.4% in Jan. Outstanding yuan loan grew 12.9% from a year earlier compared with 12.7% growth in Jan. Analysts had expected 12.7% growth. (Reuters)

Japan: BOJ to seek freer yield fluctuations after policy review. Bank of Japan officials are looking at ways to enable bond yields to fluctuate more freely in their review of monetary policy. Some of the officials want to find ways to generate more fluctuations while sticking with the current movement range of around 20 basis points either side of the BOJ’s zero target on 10-year government debt. Disclosing fewer specifics of bond-buying operations ahead of time would be one option for facilitating more moves. The range around the 10-year yield target has emerged as a key focus for markets ahead of the March 19 release of the BOJ’s policy review. (Bloomberg)


Vizione: Bags RM801m construction contracts. Vizione has secured three construction contracts with a cumulative value of RM801m. The group said the bulk of the contract worth RM405m was secured from Esplanade Parkcity SB. Another portion worth RM350m was secured from Greenwood Development SB. The remaining RM46m contract was bagged from LCL M&E Engineering SB. MD Datuk Ng Aun Hooi said this is a positive development for the group as it considerably enhances its outstanding order book which ultimately creates greater value for its shareholders. (NST)

Genetec: Bags RM59.50m contract for EV battery, semiconductor. Genetec Technology has secured c.RM59.50m of new orders from the new and existing customers in electric vehicles (EV) and batteries, hard disk drive, electronics and semiconductor industries. Genetec said the bulk of its new orders amounted to RM57.90m from EVs and battery, while RM1.6m secured from hard disk drive, electronics and semiconductor. (NST)

Censof: Bags RM18m job from Transport Ministry to develop commercial vehicle licensing system. Censof has bagged an RM17.86m contract to develop a commercial vehicle licensing system for the Transport Ministry. It has accepted a letter of award from the Ministry, which is for a period of 36 months. The licensing system generally caters for the application of commercial licences for land, maritime and air transportation. (The Edge)

Chin Hin Group Property: Acquires 45% stake in Aima for RM31.5m. Chin Hin Group Property Bhd (CHGP) plans to acquire a 45% stake in Aima Construction SB (Aima) for RM31.5m signifying its interest to venture into the construction industry. The company entered into a conditional share sale agreement with Uniplaza SB for the acquisition which will be satisfied via issuance of up to 35,795,400 new shares in CHGP at 88sen per share. The acquisition is expected to be completed by the 3QCY21. (NST)

Press Metal: Proposes one-for-one bonus issue. Press Metal has proposed to undertake a bonus issue of 4.04bn new ordinary shares on a one-for-one basis. The proposed bonus issue is in line with the group’s objective to reward its shareholders, apart from cash dividends. “We are looking forward towards a new phase of growth in 2021 as our Phase 3 smelter commenced production in late December 2020. (The Edge)

UMW: Sells 21,657 vehicles in February 2021. UMW Holdings sold a total of 21,657 vehicles in February 2021 through UMW Toyota Motor (UMWT) and its associate company Perusahaan Otomobil Kedua SB (Perodua). The conglomerate said the sustained demand was attributed by the sales tax exemption which has been extended to June 30, 2021 and the introduction of improved models. President and group CEO Datuk Ahmad Fuaad Kenali said the group will continue to take advantage of the sales tax exemption to drive registration in the 1H21. (NST)

Market Update

The FBM KLCI might open higher today as the Dow Jones Industrial Average hit a record high after a report on US consumer prices calmed concerns about inflation. The US Labor Department said its consumer price index rose 0.4% in February, in line with expectations, after a 0.3% increase in January. Core CPI, which excludes the volatile food and energy components, edged up 0.1%, just shy of the 0.2% estimate, after being unchanged the prior two months. The Dow Jones Industrial Average closed up 462.97 points, or 1.45%, at 32,297.02, the S&P 500 gained 23.37 points, or 0.60%, to 3,898.81 and the Nasdaq Composite dropped 4.99 points, or 0.04%, to 13,068.83. Europe’s main index hovered near pre-pandemic highs. The pan-European STOXX 600 index closed up 0.4% after a rally in technology stocks on Tuesday pushed the benchmark to its highest level since February 2020.

Back home, the FBM KLCI extended gains and settled 0.93% or 15.05 points higher at 1,639.83 on market close. Component stocks that helped lift the index were Petronas Dagangan Bhd (PetDag), Press Metal Aluminium Holdings Bhd and Maxis Bhd. In the region, the Nikkei 225 in Japan finished 0.03% or 8.62 points higher at 29.036.56, while Hong Kong's Hang Seng was 0.35% or 100 points higher at 28,873.23. However, the Shanghai Composite slipped 0.05% or 1.55 points to 3,357.74.

Source: PublicInvest Research - 11 Mar 2021

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