PublicInvest Research

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


PublicInvest Research Headlines - 3 Aug 2021

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US: Manufacturing growth cooling; bottlenecks starting to abate . US manufacturing activity grew at a slower pace in July for the second straight month as raw material shortages persisted, though there are signs of some easing in supply-chain bottlenecks. The survey from the Institute for Supply Management (ISM) showed a measure of prices paid by manufactures fell by the most in 16 months, while the supplier deliveries index retreated further from a 47-year high touched in May. (Reuters)

US: Construction spending inches up less than expected in June . A report released by the Commerce Department showed a modest increase in US construction spending in the month of June. The Commerce Department construction spending crept up by 0.1% to an annual rate of USD1.552trn in June after edging down by 0.2% to a revised rate of USD1.551trn in May. (RTT)

EU: European factories hire workers at record pace to fill orders. Euro-area factories are hiring new workers at record pace to keep up with persistently strong orders. Job creation was particularly pronounced in Germany and Austria last month, according to an IHS Markit survey of purchasing managers. Manufacturers continued to face substantial supply-chain bottlenecks and passed on rising costs to customers. With economies around the world recovering from the coronavirus pandemic, Europe's factories are running at full steam. (Bloomberg)

EU: Eurozone manufacturing growth moderates in July . The euro area manufacturing sector growth moderated in July but the pace of expansion remained elevated, final data from IHS Markit showed. The final factory Purchasing Managers' Index fell to 62.8 from 63.4 in June. This was the lowest reading since March. But the reading was above the flash 62.6 and the sector has recorded successive months of expansion since July 2020. Production growth softened in July. (RTT)

UK: Manufacturing sector growth slows in July . The UK manufacturing sector growth slowed in July as supply gridlock resulted in a moderate deceleration in the rates of expansion of production, new orders and job creation, final survey results from IHS Markit showed. The Chartered Institute of Procurement & Supply manufacturing Purchasing Managers' Index came in at 60.4 in July, in line with flash estimate, but down from May's record high of 65.6. Nonetheless, the index signaled expansion for 14 months. (RTT)

China: Manufacturing sector expands at slowest pace in more than a year . China's manufacturing sector logged its weakest growth in more than a year in July largely due to a fall in new orders, survey data published by IHS Markit showed. The Caixin general manufacturing Purchasing Managers' Index dropped to 50.3 in July from 51.3 in June. The reading was below economists' forecast of 51.0. (RTT)

Hong Kong: Retail sales rise for 5th month as pandemic threat eases . Hong Kong’s retail sales climbed for the fifth straight month in June, helped by an improved labour market and a stabilising COVID- 19 situation although demand was hampered by weak tourism. Retail sales in June rose 5.8% from a year earlier to HKD28.1bn (USD3.61bn), government data showed. June’s increase compared with revised 10.4% growth in May. (Reuters)


Serba Dinamik (Neutral, TP: RM0.44): Launches satellite Internet service in Perak. Serba Dinamik Group has launched MySurFi satellite internet service in Larut, Perak following the successful implementation in Melaka and Kelantan. The high speed broadband internet community social service programme will provide free Internet access for 6 months. (BTimes)

Nestcon: Awarded RM25m roadworks subcontract. Nestcon has won a subcontract in relation to the construction of an access road connecting to Sungai Pulai Bridge for the proposed Petrochemical & Maritime Industry Centre development in Tanjung Bin, Pontian, Johor. The subcontract sum for the works is valued at RM25.08m. (The Edge)

Pecca: Buys 51% of Rentas Health for RM100m. Pecca Group is diversifying into the healthcare sector with the acquisition of 204,000 shares or 51% stake in Rentas Health SB for RM100m from Teoh Zi Yuen. This would be satisfied via a combination of cash and issuance of new shares. The acquisition would increase its presence in the healthcare sector. (BTimes)

Freight Management: Buys two plots of freehold land in Klang for RM56.8m. Freight Management Holdings is acquiring two parcels of land in Klang for RM56.8m from Cebur Megah Development SB. The 3.8ha land would facilitate future expansion of its warehousing and distribution services as part of the fulfilment and parcel logistics operations. (BTimes)

Salutica: To raise funds via private placement for product range expansion. Salutica plans to raise up to RM19.4m via a placement of 38.8m shares or 10% of its issued share capital mainly to fund the expansion of the group's product range. This exercise is timely to fuel the group's growth ambitions led by the general recovery of global economic activity. (The Edge)

Ivory Properties: To jointly develop residential properties in Kedah. Ivory Properties Group has teamed up with ECK Development SB to jointly develop residential components at AirportCity and Aerotropolis in Kedah. ECK has in principle been appointed by the Kedah state government as an investor, to be involved in the development of Kulim Airport. (The Edge)

Dolphin International: Proposes second share placement in eight months to raise RM24m. Dolphin International plans to raise about RM24.17m through a private placement equivalent to 35% of its market capitalisation of RM70m to fund its food and beverage business, to repay borrowings and for the group's working capital. (The Edge)

Straits Inter Logistics: Gets nod to start Asia's largest ship to-ship transhipment hub in Labuan. Straits Inter Logistics has received an approval from the Marine Department Malaysia to commence operation for Asia's largest ship-to-ship (STS) energy transhipment hub in Labuan. It had received the approval on July 30 to commence operations. (BTimes)

OCR: To launch biggest property project in Shah Alam. OCR Group aims to launch its largest ever property development in Shah Alam with a minimum gross development value (GDV) of RM750m in the 1Q of 2022. The 26.9-acre Shah Alam project would consist of 2,892 affordable units with retail spaces in phases. (BTimes)

Market Update

The FBM KLCI might open lower today as mounting concern over decelerating economic growth in the US, after a survey on America’s factory sector showed activity was increasing more slowly than economists had expected. The Institute for Supply Management said its purchasing managers’ index fell to 59.5 in July from 60.6 the previous month. The gauge is based on a poll of industry executives, but is considered to be a strong proxy for output in the factory sector of the world’s biggest economy. America’s data disappointment came after a similarly soggy report out of China. The country’s official factory PMI showed that factory activity grew in July at the slowest pace since early 2020. US stocks lost momentum after the release of the ISM report. The blue-chip S&P 500 index closed 0.2% lower, while the Nasdaq Composite rose 0.1%, rallying after sliding 0.7% on Friday. European equities meanwhile ended mostly higher with the Stoxx 600 up 0.6% — hitting a new intraday record high.

Back home, the FBM KLCI extended last week’s losses as market sentiment continued to be affected by coronavirus woes and domestic political developments. The benchmark index finished 1.6 points or 0.11% lower at 1,493, after moving between 1,486.23 and 1,499.74. Most regional bourses closed higher, with China shares advanced as much as 2%, as the Shanghai Composite Index slightly recuperated from a sharp drop last week following a crackdown on the private education sector. The index closed 1.97% higher at 3,464.29. Hong Kong’s Hang Seng Index rose 1.10% to 26,235.80, while Japan’s Nikkei 225 finished 1.82% higher at 27,781.02 and South Korea’s KOSPI was up 0.65% at 3,223.04.

Source: PublicInvest Research - 3 Aug 2021

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