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

 

PublicInvest Research Headlines - 7 Apr 2021

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Economy

Global: IMF boosts global growth forecasts. The International Monetary Fund raised its global growth projections for this year and next, citing huge fiscal stimulus in some big economies and a vaccine driven recovery in the future. The world economy is set to grow 6% this year and 4.4% next year, the global lender said in its latest World Economic Outlook report. The latest projections are also stronger than those in the Oct WEO report. The upward revision reflects additional fiscal support in a few large economies, the anticipated vaccine powered recovery in the second half of 2021, and continued adaptation of economic activity to subdued mobility. (RTT)

US: Jobs come roaring back, surprising employers and economists. A resurgent job market is creating more opportunities at a faster clip than many economists and employers expected. Restaurants and hotels are raising wages, offering bonuses for worker referrals or luring people from other states to cope with the shortage. Many data watchers have been caught off guard as improving weather, stimulus and a surge in vaccinations converge to boost the economy. Nonfarm payrolls rose by 916,000 last month. (Bloomberg)

EU: Unemployment rate remains stable. The euro area unemployment rate remained unchanged in Feb as government support measures continue to protect jobs amid tight Covid-19 related restrictions, preliminary figures from Eurostat showed. The unemployment rate held steady at seasonally adjusted 8.3% in Feb. A year ago, the jobless rate was 7.3%. The unchanged jobless rate highlights the extent to which government policies have protected jobs during the pandemic. (RTT)

EU: Investor morale rises in April to highest since Aug 2018. An investor morale index in the eurozone rose in April to the highest level since Aug 2018, driven by an improved view of the current situation, a survey showed. Sentix’s index for the eurozone climbed to 13.1 from 5.0 in March. An expectations index climbed to a record 34.8 from 32.5 in March, while the current situation index improved to -6.5 from - 19.3 in March. The new lockdown measures are having surprisingly little effect on the overall economic recovery.. (Reuters)

EU: Greek central bank sees economy rebounding 4.2% this year. Greece’s economy is expected to rebound by 4.2% this year after an 8.2% slump in 2020, the head of the country’s central bank said. The economy’s contraction last year turned out less steep than expected despite tough restrictions to contain the coronavirus pandemic. Both the European Commission and the Bank of Greece had forecast a 10% decline in GDP. Factors that will influence the speed of the recovery include the acceleration of vaccinations. (Reuters)

UK: IMF raises its growth forecast after 2020 crash. The International Monetary Fund raised its forecast for British economic growth, which is set to outpace the eurozone this year after its slump in 2020 but is unlikely to regain its pre-pandemic size until sometime in 2022. The IMF said Britain’s economy would grow by 5.3% in 2021, up from a previous forecast of 4.5% it made in Jan. Britain has suffered Europe’s highest Covid-19 death toll and its economy shrank by almost 10% last year, the worst performance among the region’s big economies. (Reuters)

UK: Car sales down by 12% in 2021 so far, grow in March. British new car registrations fell by 12% in the first three month of 2021 compared with the same period a year earlier, which was mostly before the country was hit by the coronavirus pandemic, data published. Registrations in March alone totalled 283,964, an increase of 11.5% as the annual comparisons began to reflect the onset of the crisis last year. But sales last month were a third lower than their average level for March over the decade, the Society of Motor Manufacturers and Traders said. (Reuters)

China: Growth set to drive world economy in post-pandemic years. China will drive global economic growth in the coming years as the world recovers from a pandemic that’s killed 2.9m people, the International Monetary Fund predicts. China will contribute more than one-fifth of the total increase in the world’s GDP in the five years through 2026, according to calculations based on IMF forecasts published. Global GDP is expected to rise by more than USD28trn to USD122trn over that period, after falling USD2.8trn last year. (Bloomberg)

India: Monetary policy seen easy on virus surge. India’s monetary policy makers are poised to hold interest rates this week as the economy faces a renewed threat to growth from the pandemic, with new cases hitting a record. All economists surveyed by Bloomberg expect the six-member Monetary Policy Committee to keep the benchmark repurchase rate unchanged at 4% on April 7. (Bloomberg)

Australia: Services PMI improves to 55.5 in March – Markit. The services sector in Australia continued to expand in March, and at a faster pace, the latest survey from Markit revealed with a services PMI score of 55.5. That's up from 53.4 in Feb, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Individually, there were further gains in activity and new business, as well as sustained expansion in employment levels. (RTT)

Australia: Central Bank keeps monetary policy unchanged. Australia's central bank maintained its interest rate as well as bond purchase programme, as widely expected, as these measures continued to help the economy by keeping financing costs very low. The policy board of the Reserve Bank of Australia headed by Governor Philip Lowe decided to leave its cash rate unchanged at a record low of 0.1%. (RTT)

Markets

Serba Dinamik: (Outperform ,TP: RM2.37) To manufacture advanced membrane technology. Serba Dinamik and Membrane Technology , a Universiti Teknologi Malaysia spin-off company, signed a Memorandum of Agreement to collaborate on the manufacturing and development of advanced membrane technology for haemodialysis treatment, water and waste water treatment. The water cuts that affected thousands of households in Malaysia last year have highlighted the importance of clean water. (The Edge)

Kelington Group: Proposes one-for-one bonus issue, free warrant, diversification into specialty gases. Kelington Group has proposed a one-for-one bonus issue of up to 322.62m new shares. Upon completion of the bonus issue of shares, the company will also undertake a bonus issue of up to 215.08m warrants on the basis of one free warrant for every three shares held by then. The entitlement dates for the bonus issues would be determined later. (The Edge)

Daya Materials: Unit gets contract extension for airconditioning, mechanical ventilation maintenance from KLCC Urusharta. Daya Materials unit has bagged a one-year extension for the maintenance of air-conditioning and mechanical ventilation at the Petronas Twin Towers, Masjid Asy-Syakirin, Kompleks Dayabumi and Petrosains. 50.1%-owned unit Daya OCI SB has been granted the one-year extension by KLCC Urusharta SB for a total contract sum of RM4.35m. (The Edge)

Nextgreen: Unit NGPP teams up with KAF to supply raw material to paper and pulp mill. Nextgreen Pulb & Paper (NGPP) has signed a strategic collaboration agreement with Pertubuhan Kami Anak Felda Malaysia to supply main raw material for the manufacture of paper and pulp. Federal Land Development Authority chairman Datuk Seri Idris Jusoh said the collaboration enabled NGPP to appoint KAF as the agent for purchasing and selling empty fresh fruit bunches (FFB), as well as palm fronds from land schemes to a paper and pulp mill. (Bernama)

Cheetah: Expects additional RM25m annual revenue through online shopping venture. Cheetah Holdings is expecting to generate an additional revenue of RM25m annually with the launch of its newly-revamped online apparel store. To this end, the sports apparel company has collaborated with mobile telecommunications service provider XOX, giving Cheetah access to a ready customer base of 2.5m subscribers through XOX's Black App. (The Edge)

Frontken: Unit buys RM53m property in Taiwan for capacity expansion in face of robust demand. Frontken Corp's Taiwanese unit is purchasing an industrial property in Taiwan for NTD367.5m (about RM53.29m), cash, to expand its production capacity there to support increasing demand from its semiconductor customers. The group said its 91.25%-owned Ares Green Technology Corp (AGTC) has inked a sale and purchase agreement with MH GOPOWER Co Ltd for the purchase. The property — comprising an office building with a production area and basement car park with a total built-up area of 10,927 sq m — is located on a piece of leasehold land in the Southern Taiwan Science Park. The purchase will be financed with internal funds. (The Edge)

Market Update

The FBM KLCI might open weaker today after Wall Street lost ground, pulling back from the prior session’s record closing highs and Treasury yields edged lower on Tuesday as investors trained their focus on the approaching earnings season and the Federal Reserve’s economic outlook. All three major US stock indices closed in the red, led by the blue-chip Dow, which notched an all time closing high on Monday. The Dow Jones Industrial Average fell 96.95 points, or 0.29%, to 33,430.24, the S&P 500 lost 3.97 points, or 0.10%, to 4,073.94 and the Nasdaq Composite dropped 7.21 points, or 0.05%, to 13,698.38. European stocks closed at a record high, having recovered all pandemic-related losses as investors bet on a speedy global economic recovery. The pan European STOXX 600 index rose 0.70%.

Back home, the FBM KLCI extended its losses for the second day running, in line with the lower close in some Asian markets despite the overnight rally on Wall Street. The benchmark index closed 5.33 points or 0.34% lower at 1,578.91, after an intraday low of 1,575.18. Regional stocks were mixed with Japan's Nikkei 225 down 1.3%, while South Korea's Kospi added 0.2%.

Source: PublicInvest Research - 7 Apr 2021

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