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Author: PublicInvest   |   Latest post: Fri, 26 Nov 2021, 10:48 AM

 

PublicInvest Research Headlines - 28 Oct 2021

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Economy

US: Business spending on equipment strong, auto shortages sink exports. New orders for US made capital goods increased to a record high in Sept and shipments surged, pointing to strong business spending on equipment, though stretched supply chains likely hampered overall economic growth in the 3Q. Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.8% last month to an all-time high (Reuters)

US: Trade deficit widens in Sept, inventories mixed. The US trade deficit in goods surged in Sept as exports tumbled, suggesting trade probably weighed on economic growth again in the 3Q. The goods trade deficit increased 9.2% to USD96.3bn, the Commerce Department said. Goods exports dropped 4.7%, while imports gained 0.5%. The report also showed wholesale inventories increased 1.1% last month. (Reuters)

US: Holiday sales could hit record levels of over USD800bn - NRF. US holiday sales could rise over 10% this year, a trade body said, as major consumer goods makers and retailers work to prevent supply chain disruptions from leaving shelves empty of in-demand toys and games. The National Retail Federation (NRF) forecast sales to increase between 8.5% and 10.5%, to between USD843.4bn and USD859bn, during Nov and Dec, compared with a previous high of USD777.3bn last year. (Reuters)

EU: Germany cuts 2021 growth outlook as supply problems, energy prices bite. The German government cut its growth forecast for this year to 2.6% but raised its estimate for next year to 4.1% as supply bottlenecks for semiconductors and rising energy costs delay the recovery in Europe’s largest economy. The economy remained robust despite the COVID-19 pandemic, but supply chain woes in manufacturing and a surge in energy prices were complicating the recovery. (Reuters)

EU: Italy trade surplus falls in Sept. Italy's trade surplus decreased in Sept from the same month last year, data published by the statistical office Istat showed. The trade surplus decreased to EUR1.671bn in Sept from EUR5.273bn in the same month last year. In Aug, trade surplus was EUR1.597bn. Exports grew 5.1% yearly in Sept, after a 15.8% gain in Aug. Imports rose 32.9% in Sept, after a 39.9% increase in the previous month. (RTT)

UK: Economy forecast to return to pre-COVID level by year end, grow 6.5% GDP in 2021. Britain’s economy is forecast to grow 6.5% in 2021, finance minister Rishi Sunak said, citing the latest projections from the Office for Budget Responsibility (OBR). The forecasts showed the economy would return to its pre-COVID level at the turn of the year, earlier than had been forecast in March. (Reuters)

UK: Chancellor unveils GBP150bn spending boost. UK Chancellor Rishi Sunak raised the public spending by a massive GBP150bn in an effort to underpin a strong economic recovery after the crisis caused by the coronavirus pandemic. That will be the largest increase this century, with spending growing by 3.8% a year in real terms by 2024- 25. The chancellor said the latest budget began the work of preparing for a new economy post-Covid. (RTT)

China: Industrial profits increase at a faster pace in Sept. China's industrial profits increased at a faster pace in Sept despite supply bottlenecks pushing raw material prices higher. Industrial profits surged 16.3% on a yearly basis in Sept after rising 10.1% in Aug, the National Bureau of Statistics reportedly said. The overall annual increase was largely driven by mining industry, while power firms reported a decline in profits. (RTT)

Markets

Maybank (Outperform, TP: RM9.30): To help Singapore's Ezion sell vessels to repay loans. Malayan Banking (Maybank) is helping Singapore-listed Ezion Holdings sell vessels to recover money which will be used to repay Ezion's bank loans. Four memoranda of agreement (MOAs) had been entered into by several entities of Ezion for the sale of the four liftboats for a total of USD40m cash. (The Edge)

IOI Corp (Neutral, TP: RM4.41): New offer of USD300m notes attracts investors' interest. IOI Corp’s new offer of USD300m 10-year unsecured notes has attracted institutional investors. The new offer of USD300m 10-year senior unsecured notes is a drawdown from the issuer's USD1.5bn Euro Medium-term Note Programme. Moody's rated IOI Investment with Baa2 rating as it had successfully returned to the international capital markets from its last bond issuance in 2012. (The Edge)

Serba Dinamik (Neutral, TP: RM0.31): Remains suspended, has not complied with directive, says Bursa. The suspension on the trading in Serba Dinamik's shares remains in effect as the company has not complied with the directive to make an announcement on the findings from the special independent review. (The Edge)

Glomac: Bullish on Klang Valley property development despite lingering pandemic impact. Glomac's long-term prospects is expected to remain positive, anchored by a strong portfolio of prime development landbank with an estimated gross development value of RM8bn, largely within the Klang Valley. (StarBiz)

EcoFirst: Plans to launch new residential homes below RM500,000 to meet affordable residential housing shortage. Boutique property developer EcoFirst Consolidated new property development launches will be priced below RM500,000 per unit as the company aims to tap on the shortages of affordable residential homes in Malaysia. (BTimes)

Seni Jaya: Proposes 3-for-1 bonus issue. Seni Jaya Corp has proposed a private placement exercise involving the issuance of up to 14.56m new ordinary shares. To undertake a bonus issue of up to 262.08m new ordinary shares in Seni Jaya on the basis of three bonus shares for every one Seni Jaya share held. (StarBiz)

Salcon: Secures RM21m sewerage system contract from Gamuda. Salcon has secured a RM20.85m sewerage system contract from Gamuda. The work involves the rehabilitation of vacuum sewerage system at Bandar Botanik and Ambang Botanik in Klang. The project is a construction contract and has no option for renewal. (The Edge)

Ageson: To raise RM18.7m via private placement to repay borrowings. Ageson proposed to undertake a private placement of up to 20% of its issued shares to raise RM18.7m to repay borrowings. The proposed private placement will involve the issuance of up to 259.73m Ageson shares. (The Edge)

Market Update

US benchmarks eased off overnight as investors continued to monitor corporate earnings announcements, many of which are still beating expectations, while waiting on first estimates of 3Q 2021 GDP from the Commerce Department. The Dow Jones Industrial Average and S&P 500 dipped 0.7% and 0.5% respectively. The tech-heavy Nasdaq Composite closed relatively unchanged despite a jump in Microsoft (+4.2%) and Alphabet (+4.9%) shares. European markets were also lower as investors here digested corporate earnings, fresh economic data and a budget update from the UK finance minister. On the latter, the country’s half-yearly update on its public finances included multi billion pound spending on health care and transport, as well as a rise in the national living wage. UK’s FTSE 100 and Germany’s DAX both fell 0.3% while France’s CAC 40 slipped 0.2%. Earlier in the day, Asian markets were mostly lower even as new data showed China’s industrial profits surging 16.3% higher YoY in September. Chinese technology shares in Hong Kong slid on concerns about more scrutiny from Washington after the US banned China Telecom’s American business, weighing on the Hang Seng Index which slumped 1.6%. The Shanghai Composite Index fell 1.0% meanwhile.

Salcon has secured an RM20.9m sewerage system contract from Gamuda for works involving the rehabilitation of vacuum sewerage system at Bandar Botanik and Ambang Botanik in Klang. K-One Technology said it has received conditional approval from the Health Ministry’s Medical Device Authority for the import and distribution of a China-made Covid-19 antigen self-test kit. Kanger International has entered into a Heads of Agreement with a Dubai based pharmaceutical company to purchase Covid-19 rapid testing kits for distribution within Malaysia.

Source: PublicInvest Research - 28 Oct 2021

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