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PublicInvest Research

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

 

PublicInvest Research Headlines - 19 May 2021

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Economy

US: Housing starts trail estimate, hinting at supply chain woes. US housing starts fell by more than forecast in April, suggesting that supply-chain constraints and rising materials costs continue to hold builders back. Residential starts decreased 9.5% in April to a 1.57m annualized rate, according to government data released Tuesday. The median estimate in a survey called for a 1.7m pace. Construction has been held back in recent months by supply chain constraints as well as higher materials costs, particularly for lumber. (Bloomberg)

US: Biden eyes more jobs in expanded vaccine sharing abroad. President Joe Biden to make good on his promise that the US would be an “arsenal” of coronavirus vaccines for the world, announcing he’d share FDA-authorized shots after criticism that his administration had hoarded hundreds of millions of doses. But he also signaled that he intends for U.S. manufacturers to hold or grow their share of the global market for vaccines, casting his decision to begin supplying other countries as an engine for American jobs. (Bloomberg)

EU: Economy enters recession as estimated in 1Q. The euro area economy re-entered recession in the 1Q, as initially estimated, due to the restrictions imposed to contain the spread of the Covid-19 pandemic. GDP contracted 0.6% from the 4Q, when GDP was down 0.7%, flash data from Eurostat revealed. The rate came in line with the estimate published on April 30. After a record expansion in the 3Q of 2020, GDP had fallen for the second straight time, pushing the economy back into a technical recession.(RTT)

EU: Italy trade surplus increases in March. Italy's trade surplus increased in March, data from the statistical office Istat showed. The trade surplus rose to EUR5.19bn in March from EUR5.701bn in the same period last year. In Jan, the trade surplus was EUR1.584bn. Exports grew 28.1 YoY in March, after a 4.4% fall in Feb. On an annual basis, imports accelerated 35.1% in March, after a 1.5% decrease in the preceding month. On a monthly basis, exports increased 3.2% and imports rose 6.0% in March. (RTT)

UK: 1Q unemployment rate declines. The UK unemployment rate declined in the 1Q despite the recent lockdown, the Office for National Statistics reported. The jobless rate fell 0.3ppt to 4.8% in the 1Q. This was also below economists' forecast of 4.9%. At the same time, the employment rate was estimated at 75.2%, up 0.2ppt from the previous quarter. Data showed that annual growth in average earnings, including bonuses, came in at 4%, but below the economists' forecast of 4.5%. Excluding bonuses, average earnings increased 4.6% annually, as expected. (RTT)

China: April diesel exports rise 5.7% on resurgent overseas demand. China's diesel exports in April rose 5.7% from the same period last year because of resurgent overseas demand and refiners' efforts to reduce bulging domestic stocks. Diesel shipments reached 2.72mt last month, down from 2.81mt in March, data from the General Administration of Customs showed. Gasoline exports in April plunged 22.8% from a year earlier to 1.47mt. Jet kerosene exports were 660,000 tonnes in April down 67.5% from the record high of 2.03mt a year earlier. (Reuters)

China: To ensure ferrous market stability, sees factory-gate price growth easing in 2H. China’s state planner said it would take measures to stabilise steel and iron ore market, and that it expects growth in the country’s factory gate prices to ease in the second half as commodity prices return to taking cues from fundamentals. Pandemic-driven stimulus measures have driven up commodity prices recently, boosting profitability for upstream companies but hurting downstream manufacturers’ performance. (Reuters)

Japan: Economy slumps back into decline as Covid-19 hits spending. Japan’s economy shrank more than expected in the 1Q as a slow vaccine rollout and new Covid-19 infections hit spending on items such as dining out and clothes, raising concerns the country will lag others emerging from the pandemic. Capital expenditure also fell unexpectedly, and export growth slowed sharply, a sign the world’s third-largest economy is struggling for drivers to pull it out of the doldrums. (Reuters)

Markets

Tuju Setia: Secures RM189m construction contract . Tuju Setia has secured a RM189m contract for a high-rise construction project in Seri Kembangan, Selangor. Tuju Setia said its wholly owned subsidiary Pembinaan Tuju Setia SB accepted the letter of award (LOA) from Enso Development SB. Tuju Setia said the contract is for the proposed construction and completion of Package1 of a commercial development project which consists of 35 storey small-office-home-office (865 units), 33 storey serviced apartments (526 units), and 13 storey podium car park and related facilities at Bandar Putra Permai, Seri Kembangan, Selangor. (StarBiz)

DNeX: Indonesian consortium secures three-year submarine job with estimated revenue of RM186m. Dagang NeXchange (DNeX) said its Indonesian consortium has bagged a three-year contract, with an option to extend for a further three years, to supply installation and maintenance support services of submarine cable communications system via the group's vessel. Under the agreement, TelkomInfra will pay a standby charge of IDR213bn (RM63m) over the initial three-year period, excluding daily rates applicable depending on the work scope. (The Edge)

Econpile: Secures RM27m structure works contract in KL . Econpile Holdings has secured a foundation and structure works contract worth RM27.09m from Satin Magic SB, to undertake the work package which includes demolition, site clearance, earthworks, site works and reinforced concrete works for a luxurious seven-storey apartment building located in Bukit Damansara, Kuala Lumpur. (The Edge)

Green Packet: Seeks to raise up to RM328m via rights issue . Green Packet plans to raise up to RM328.37mn through a rights issue with free detachable warrants, to fund the expansion of its digital services business and for general working capital. (The Edge)

SCIB: Accepts RM120m Prima housing contract . Sarawak Consolidated Industries has accepted a contract for Phase 1 of Rakyat 1 Malaysia housing (Prima) in Kota Bharu from AUEI Teras Holdings SB. It said in a filing that the contract accepted by SCIB Properties SB includes two 316-unit blocks of 21-floor condominiums, a multi-purpose hall, mosque, nursery and kindergarten, guard house and 4.5-storey car park. The contract value for the condominiums alone and excluding infrastructure works is RM120m. (StarBiz)

Cycle & Carriage: Announces final deadline extension for takeover offer . Jardine Cycle & Carriage Ltd (Jardine CCL) is further extending — for one last time — the deadline of its takeover offer for Cycle & Carriage Bintang shares it does not already own. The deadline for the acceptances of the offer is now extended from May 21 to June 4. (The Edge)

Minetech: Sells 60% stake in quarry operator for RM10m . Minetech Resources has disposed of its 60% stake in quarry operator Bertam Capital SB for RM10.2m. The engineering services company said it expects to receive an estimated one-off gain of RM1.57m after taking into consideration the estimated expenses of RM70,000 in relation to the disposal of the 60% equity interest to Bertam Roadbase SB, which owns the remaining 40% stake. (The Edge)

Market Update

The FBM KLCI might open lower today as stocks on Wall Street slipped on Tuesday, with a slide in shares of oil majors and other energy groups weighing on a market that has drifted sideways since hitting a record earlier this month. The blue-chip S&P 500 index closed the trading day down 0.9%, with energy and industrials booking the strongest declines, while the technology focused Nasdaq Composite lost 0.6%. Europe’s Stoxx 600 closed 0.2% higher. The US Institute for Supply Management’s services activity index, which investors scrutinise for signs that economic growth is either accelerating or losing momentum, hit a record reading of 63.7 in March before moderating to 62.7 in April.

Back home, the FBM KLCI rose to close at the day’s high following late bargain hunting in selected heavyweight counters and in line with the regional uptrend. The benchmark index ended 7.86 points or 0.5% higher at 1,591.32. Elsewhere in region, most indices rose as investors looked past rising virus infections in the region and bet on the global recovery, with Tokyo brushing off data showing the Japanese economy shrank more than expected in the first quarter. Japan’s Nikkei 225 surged 2.09%, South Korea’s Kospi advanced 1.23%, Hong Kong’s Hang Seng Index rose 1.34% and the Shanghai Composite Index added 0.14%.

Source: PublicInvest Research - 19 May 2021

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