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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 24 Sep 2021, 10:33 AM

 

PublicInvest Research Headlines - 23 Jul 2021

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Economy

US, China: Trade booms as if virus, tariffs never happened. China and the US are shipping goods to each other at the briskest pace in years, making the world’s largest bilateral trade relationship look as if the protracted tariff war and pandemic never happened. Eighteen months after the Trump administration signed the trade deal, the agreement has turned out to be a truce at best. The US trade deficit hasn’t shrunk, most levies are still in place, and it hasn’t led to negotiations over other economic issues. (Bloomberg)

US: Weekly jobless claims unexpectedly climb to 419,000. A report released by the Labor Department showed an unexpected increase in first-time claims for US unemployment benefits in the week ended July 17th. The Labor Department said initial jobless claims climbed to 419,000, an increase of 51,000 from the previous week's revised level of 368,000. The rebound surprised economists, who had expected jobless claims to edge down to 350,000 from the 360,000 originally reported for the previous week. (RTT)

EU: ECB leaves rates unchanged, revises forward guidance. The ECB left its key interest rates unchanged, but revised its forward guidance on the same to support its new inflation target. The central bank left the main refinancing rate at 0%, the deposit rate at -0.50% and the marginal lending rate at 0.25%, in line with economists' expectations. On July 8, the ECB had adopted a symmetric 2% inflation target that will allow a temporary overshoot in inflation and decided to incorporate climate change considerations into its policy framework, following a monetary policy review that was launched last year. (RTT)

UK: Manufacturers' expectations about output growth at record high- CBI. UK manufacturers' expectations about output growth over the coming three months reached a record high, the Industrial Trends Survey results from the Confederation of British Industry showed. In the three months to July, output volumes grew at the joint-fastest pace on record, with the balance rising to 37%. A net 44% of manufacturers forecast output growth to accelerate further next quarter, this was the strongest expectations on record. A net 29% of manufacturers expect total new orders growth to ease next quarter. Total new orders in the quarter to July grew at their quickest pace since January 1974, the survey showed. (RTT)

Hong Kong: Inflation slows in June. Hong Kong's consumer price inflation eased in June, data from the Census and Statistics Department showed. The composite consumer price index rose 0.7% YoY in June, after a 1.0% increase in May. Excluding the effects of all government one-off relief measures, the composite consumer price index increased 0.4% yearly in June, following a 0.2% rise in the previous month. "Looking ahead, while inflationary pressures may increase further in the near term alongside the economic recovery and rising import prices, overall inflation should remain largely contained as the local economy is still operating below capacity," a government spokesman said. (RTT)

Taiwan: Jobless rate rises in June. Taiwan's unemployment rate increased in June, data from the Directorate General of Budget, Accounting and Statistics showed. The unemployment rate rose to a seasonally adjusted 4.76% in June from 4.15% in May. On an unadjusted basis, the jobless rate grew to 4.8 in June from 4.11% in the prior month. The number of unemployed persons increased to 570,000 in June from 489,000 in the previous month. The labor force participation rate fell to 58.76% in June from 58.82% in the preceding month. (RTT)

Indonesia: Bank Indonesia holds rates as Covid-19 surge dims recovery prospects. Indonesia’s central bank left its benchmark rate unchanged, and lowered its growth outlook for the year, as one of the most severe Covid outbreaks in the world puts the economy’s recovery at risk. Bank Indonesia kept the seven-day reverse repurchase rate at 3.5%, as all 29 analysts in a Bloomberg survey predicted. The central bank has held its policy rate steady since Feb and recently signalled that it may not make any rate moves until at least next year. (Bloomberg)

Markets

Ireka: Plans private placement to raise RM11.58m for working capital. Ireka Corp has proposed to undertake a private placement of up to 10% of its total number of issued shares to raise an estimated RM11.58m for working capital. The placement will involve 18.67m shares, which will be issued to third-party investors to be identified later at a yet-to-be issue price. Based on an illustrative issue price of 62sen per placement share, the exercise is expected to raise RM11.58m, of which RM11.38m will be used as working capital, such as staff costs and other operating costs. (The Edge)

Hong Seng: Bags RM112m contract to supply PCR test kits to MoH. Hong Seng Consolidated’s 51%-indirect unit has secured a RM112.32m contract from the Ministry of Health (MoH) to supply polymerase chain reaction (PCR) Covid-19 test kits to the ministry. The one-year contract will be in effect from 26 July 2021 to 25 July 2022. It did not disclose the volume contracted between the two parties. (The Edge)

Tiong Nam: Ropes in new partner for its loss-making hospitality arm. Tiong Nam Logistics Holdings has signed a shareholders agreement on a new partner to operate its lossmaking hospitality unit Terminal Perintis SB. Tiong Nam said the transaction entails Terminal Perintis SB issuing 5.2m new shares, or 51% of its enlarged equity, to Create Fortune Enterprise SB for RM36.7m. The exercise is part of its streamlining to focus on expanding its core integrated logistics and warehousing services business. (BTimes)

Majuperak: Appointed by Perak government to roll out free Covid-19 test kits in Batang Padang. Majuperak Holdings has been appointed by Perbadanan Kemajuan Negeri Perak (PKNPk) to roll out free Covid-19 Antigen Rapid Test (RTK-Ag) programme for the residents of Batang Padang initially. Chief executive officer Nizran Noordin said the initiative to offer free screening testing services would not only benefit the local community in preventing the spread of the pandemic, it would also contribute to the prevention of the spread at the state and national levels. (BTimes)

ViTrox: Posts record 2Q profit of over RM50m on semiconductor boom. ViTrox Corp’s 2Q net profit more than doubled to a record RM50.64m, from RM22.92m a year earlier, on the back of the semiconductor boom which saw heighten demand for its solutions. Earnings per share for the 2QFY21 rose to 10.73 sen, from 4.87 sen previously. The commendable results came as ViTrox’s quarterly revenue more than doubled to RM196.19m, from RM96.55m the year before. (The Edge)

United Plantations: 2Q21 profit up 9% on improved plantation segment. United Plantations' net profit for the 2QFY21 rose 9.87% to RM135.79m from RM123.59m, supported by better plantation performance, while contribution from its refinery segment fell. Quarterly earnings per share rose to 32.74sen from 29.8sen. Revenue in the quarter rose 63.72% to RM481.87m from RM294.32m, as both segments saw top line growth, led by the refinery segment. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after Wall Street stocks climbed on Thursday, extending gains for a third consecutive day, as investors concentrated on an influx of mostly positive earnings results from corporate America. The blue-chip S&P 500 stock index rose 0.2% in New York, reversing earlier losses after data showed US jobless claims climbed by the biggest weekly increase since March. The index was lead higher by mega-cap tech companies, including Microsoft, Apple and Amazon. The relatively concentrated advance in the sector helped offset declines by three-fifths of the stocks in the S&P 500. The Nasdaq Composite rose 0.4%. In Europe, equities rose for the third straight day and Eurozone government debt also gained after the European Central Bank reaffirmed its commitment to buying Eurozone bonds and keeping interest rates at historic lows. The continent-wide Stoxx 600 share index closed up 0.6%, as traders banked on continued supportive monetary policy.

Back home, the FBM KLCI also closed higher, tracking regional bourses, which were mostly higher, as market sentiment was spurred by the overnight gain on Wall Street that was driven by strong quarter earnings figures so far. The benchmark index increased 0.73% or 11.1 points to close at the intraday high of 1,527.62. Elsewhere, Singapore’s Strait Times Index gained 1.28% to 3,159.08; Hong Kong’s Hang Seng Index shot up 1.83% to 27,723.84, Seoul's Kospi index climbed 1.07% to 3,250.21; Tokyo's Nikkei 225 went up 0.58% to 27,548; the Shanghai Composite index rise 0.34% to 3,574.73.

Source: PublicInvest Research - 23 Jul 2021

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