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PublicInvest Research

Author: PublicInvest   |   Latest post: Thu, 29 Jul 2021, 9:29 AM

 

PublicInvest Research Headlines - 1 Apr 2021

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Economy

  • Global: WTO hikes 2021 trade growth forecast, but COVID-19 risks linger. The World Trade Organization slightly raised its growth forecast for global goods trade this year, but said the outlook was clouded by risks from the roll-out of coronavirus vaccines and the possible emergence of vaccine-resistant strains. Vaccines had given the world a chance of stopping the disease and jump-starting the economy. The WTO is forecasting merchandise trade will grow this year by 8.0% after a fall of 5.3% in 2020. That compares with Oct figures of respectively 7.2% growth and a 9.2% decline. It forecast 4.0% growth in 2022. (Reuters)
  • US: Pending home sales plunge much more than expected in Feb. Pending home sales in the US plunged by much more than expected in the month of Feb, according to a report released by the National Association of Realtors. The pending home sales index plummeted by 10.6% to 110.3 in Feb after tumbling by 2.4% to a revised 123.4 in Jan. Economists had expected pending home sales to slump by 2.6% compared to the 2.8% dive originally reported for the previous month. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. (RTT)
  • US: Private payrolls post biggest gain in six months, housing market cooling. US private employers hired the most workers in six months in March as more Americans got vaccinated against Covid-19, pushing the economy towards a broader reopening, which is expected to unleash a strong wave of pent-up demand in the coming months. Private payrolls surged by 517,000 jobs this month after rising 176,000 in Feb. Economists polled by Reuters had forecast private payrolls increasing by 550,000 jobs in March. The leisure and hospitality sector added 169,000 jobs after only 51,000 in Feb. Construction payrolls rebounded by 32,000 jobs. (RTT)
  • US: Biden pitches USD2.25trn plan. President Joe Biden presented a USD2.25trn US infrastructure plan, setting the stage for a drawn-out battle over his second big economic program after his pandemic-relief package’s relatively smooth sail through Congress. The “American Jobs Plan”, lays out an eight-year program that includes USD620bn for transportation and USD650bn for initiatives such as cleaner water and high-speed broadband. Biden’s plan would also allocate USD580bn to American manufacturing which would include USD180bn for the biggest non-defense research and development program on record and USD400bn toward care for the elderly and disabled. (Bloomberg)
  • EU: Inflation continues to surge in March. Eurozone inflation jumped in March, taking another step higher in what is likely to be a temporary but sharp climb that may put consumer price growth above the European Central Bank’s near 2% target later this year. Inflation in the 19 countries sharing the euro accelerated to 1.3% in March from 0.9% a month earlier, up from a string of negative readings late last year but in line with expectations, a flash estimate from Eurostat. Inflation picked up on higher energy and non-processed food prices but services costs were in line with the headline figure and non energy industrial goods inflation fell sharply. (Reuters)
  • EU: German jobless falls in March despite protracted lockdown. German unemployment fell in March, data showed, as lockdown measures to curb the coronavirus in Europe’s biggest economy had a limited effect on the labour market. The Federal Labour Office said the number of people out of work fell by 8,000 in seasonally adjusted terms to 2.745m. The unemployment rate remained unchanged from the previous month at 6.0%. Germany is struggling to control a third wave of the pandemic and has been in lockdown since Nov although some measures were eased in early March with schools and hairdressers re-opening. (Reuters)
     
  • UK: Economy grew more than thought at end of miserable 2020. Britain’s coronavirus-hammered economy grew more quickly than previously thought in the final three months of last year but still shrank by the most in more than three centuries in 2020 as a whole, official data showed. The figures also revealed the biggest pile of household savings on record last year, which the Bank of England thinks will fuel a recovery when consumers are freed from lockdown. GDP increased by 1.3% between Oct and Dec from the previous three-month period. In 2020, GDP fell by 9.8% from 2019, only slightly less sharp than an initial estimate of a 9.9% slump. (Reuters)
     
  • UK: House price growth slows in March. UK house price growth moderated in March reflecting softening of demand ahead of the original end of the stamp duty holiday, data from the Nationwide Building Society revealed. House prices increased 5.7% YoY in March, slower than the 6.9% growth see in Feb. This was the slowest rise since Sept 2020 and also weaker than the economists' forecast of +6.4%. On a monthly basis, house prices fell 0.2%, in contrast to a 0.7% rise in Feb. Prices were expected to climb 0.4%. In the 1Q, house prices grew 1.2% sequentially, taking the annual growth to 6.3%. (RTT)
     
  • China: Strong factory growth in March bolsters economic recovery. China’s manufacturing activity expanded at the quickest pace in three months in March as factories cranked up production after a brief lull during the Lunar New Year holidays, with improving global demand adding further momentum to a solid economic recovery. The official manufacturing Purchasing Manager’s Index (PMI) rose to 51.9 from 50.6 in Feb, data from the National Bureau of Statistics (NBS) showed, remaining above the 50-point mark that separates growth from contraction for the 13th straight month. (Reuters)
  • Japan: Housing starts fall further in Feb. Japan housing starts continued to decline in Feb, data from the Ministry of Land, Infrastructure, Transport and Tourism showed. Housing starts decreased 3.7% YoY in Feb, bigger than the 3.1% fall in Jan and 4.8% decline expected by economists. Annualized housing starts increased to 808,000 in Feb from 801,000 in Jan. Further, construction orders received by the big 50 contractors grew at a much slower pace of 2.5% after increasing 14.1% in Jan. (RTT)

Markets

  • LBS Bina (Trading Buy, TP: RM0.55): Inks JV agreement for RM1.5bn mixed development in Cameron Highlands. LBS Bina has inked a joint-venture agreement (JVA) with the Cameron Highland District Council for a mixed development project with a GDV of RM1.5bn in Tanah Rata, Cameron Highlands. The project spans an area measuring 51.32 acres stretching from the Kea Farm to the Time Tunnel Museum in Brinchang. The JVA was inked by Casa Inspirasi SB (CISB), a 69% indirectly owned unit LBS Bina. (The Edge)
  • MCE: Bags contracts for supply of mechanical parts for Toyota models. MCE said it has secured contracts to supply various mechanical parts for new Toyota car models. It expects the supply of the parts to commence in 4QFY22 for a duration of six years. “The projects are expected to generate total revenue of approximately RM13.3M for MCE group over the six-year period whilst the estimated total investment cost is RM1.36M,” it said. (The Edge)
  • Dagang NeXchange: Khazanah sells Silterra to DNex and China-based Equity Fund for RM273m cash. Dagang NeXchange has teamed up with Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership) – also known as CGP Fund – to acquire SilTerra for RM273m cash. DNeX said it will take up a 60% stake in SilTerra Malaysia SB for RM163.8m, while CGP Fund will acquire the remaining 40% for RM109.2m. (The Edge)
  • Boustead Holdings: 4Q net loss narrows to RM352.30m amid lower impairment. Boustead Holdings net loss narrowed by 69% YoY to RM352.30m in 4QFY20, as the group reported lower impairment of property, plant and equipment of RM159.3m. In contrast, in 4QFY19, the group booked RM1.14bn worth of impairment of property, plant and equipment, right-of-use of assets and goodwill, and accelerated amortisation of rights to supply. Boustead’s MD Datuk Seri Mohammed Shazalli Ramly said while the economic condition may be challenging, the group has been seeing a lot of positive news from its pharmaceutical and plantations businesses. (The Edge)
  • Sunway: 4Q net profit up slightly to RM193m, declares 1.5 sen dividend. Sunway net profit rose 5% YoY to RM193.07m in 4QFY20, thanks to the recognition of a balance of development profits of RM182.50m. The balance of the development profits on one of the group’s Singapore and China property development projects was deferred due to the adoption of MFRS 15. Sunway said while most of its business segments continued to recover from the fallout of the pandemic, its hospitality and leisure businesses under the property investment segment continued to be adversely impacted in 1QFY21 (The Edge)
  • Alam Maritim: Net loss widens to RM115m in FY20. Alam Maritim Resources net loss widened to RM115.25m in the FY20, from a net loss of RM79.48m the year before. The companysaid its revenue also declined by 19% YoYto RM248.42m. It attributed the weaker results to fewer charter contracts for offshore support vessels as well as less contribution from the subsea services/ offshore installation and construction segment. (Starbiz)

MARKET UPDATE

The FBM KLCI might add a few points today at opening after the dollar hit a one-year high versus the yen as technology stocks led Wall Street and a key gauge of global equities higher on Wednesday ahead of an announcement by President Joe Biden of a multitrillion-dollar plan to rebuild America’s infrastructure. Big tech surged on Wall Street, with Apple Inc, Microsoft Corp, Tesla Inc, Amazon.com Inc and Facebook Inc pushing the benchmark S&P 500 to a fresh peak and lifting the Nasdaq 2% higher at one point. US private employers hired the most workers in six months in March as more Americans got vaccinated against COVID-19 and pushed the economy toward a broader reopening, which is expected to unleash a strong wave of pent-up demand in coming the months. The ADP National Employment Report was slightly below economists’ expectations, but the jump in hiring aligned with a recent improvement in labor market conditions. At the close, the Dow Jones Industrial Average fell 0.26%, the Nasdaq Composite added 1.54% and the S&P 500 gained 0.36%, failing to top the 4,000 mark. In Europe, shares closed slightly lower. The regional STOXX 600 index fell 0.2%, but posted its second straight month of gains and best since April 2020. Britain’s blue-chip FTSE 100 index fell 0.9% as online food delivery firm Deliveroo fell 30% on its first day of trading.

Back home, the FBM KLCI closed down 35.68 points or 2.22% at 1,573.51, while the number of Bursa Malaysia decliners rose past 850, as share trade volume topped eight billion securities as world shares took cue from the US government bond yield surge and a strengthening US dollar. In the region, the main indices finished mixed with the Shanghai Composite gained 1.14%, while the Nikkei 225 led the Hang Seng lower. They fell 2.07% and 0.27% respectively.

Source: PublicInvest Research - 1 Apr 2021

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