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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 22 Nov 2019, 11:33 AM

 

PublicInvest Research Headlines - 19 Apr 2019

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Economy

US: Weekly jobless claims lowest since 1969; unemployment rolls shrink. The number of Americans filing applications for unemployment benefits fell to more than a 49-1/2-year low last week, pointing to sustained strength in the economy. Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 192,000 for the week ended April 13, the lowest level since Sept 1969, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported. Claims have now declined for five straight weeks. (CNBC)

US: Best retail sales since 2017 brighten growth outlook. Retail sales in the US jumped by the most since Sept 2017 and first-time filings for unemployment benefits dropped to a fresh 49-year low, as a strong labor market gives American consumers the wherewithal to keep the economy chugging along. The value of overall sales in March rose 1.6%, boosted by gains in motor vehicles and gasoline stations, after an unrevised 0.2% decrease the prior month, according to Commerce Department figures released Thursday. (Bloomberg)

EU: Private sector growth slows in April . Eurozone private sector expanded at the slowest pace for the second successive month in April as manufacturing contracted and service sector growth slowed, preliminary data from the IHS Markit survey showed on Thursday. The Eurozone Composite Purchasing Managers' Index fell to a three-month low of 51.3 from 51.6 in March. New export orders fell sharply for the seventh straight month, while new order growth picked up marginally, remaining close to stagnant. Backlogs of work declined for the fourth time in five months, showing any growth since Nov 2018. Employment growth rose slightly but remained at the lowest since 2016. (RTT)

UK: Demand for unsecured lending to fall in 2Q. UK households' availability of unsecured credit as well as demand is expected to fall in the 2Q, the latest quarterly Credit Conditions survey from the BOE revealed Thursday. Survey showed that demand for unsecured lending was stable in the 1Q, driven by a slight increase in demand for credit card lending along with a slight decrease in demand for other unsecured lending. The demand for credit card lending was expected to fall in the 2Q, while there will be a slight decrease for other unsecured lending, the survey showed. Banks reported that household demand for secured lending for remortgaging increased notably in the 1Q and expected demand to increase further in the 2Q. Meanwhile, demand for secured lending for house purchase was unchanged in the first quarter, and was expected to fall in next quarter. Lenders reported a decrease in demand for corporate lending from businesses of all sizes in the first quarter and forecast demand to remain unchanged for small businesses. (RTT)

UK: Retail sales rise to 4-month high in March. UK retail sales grew at a faster rate than expected in March, data from the Office for National Statistics showed on Thursday. Retail sales grew 1.1% MoM in March, after a 0.6% rise in Feb. Sales rose to the highest in four months, when it was 1.5%. Economists had forecast a 0.4% decline. Excluding auto fuel, retail sales grew 1.2% monthly in March after a 0.4% rise in Feb. Economists were looking for a 0.3% decrease. Food stores and non store retailing were the largest contributors to the quantity bought in March. Including auto fuel, retail sales rose 6.7% YoY following a 4.0% increase in Feb. Economists were looking for a 4.6% increase. Retail sales, excluding auto fuel, grew 6.2% YoY in March, after a 3.8% rise in the previous month. Economists had expected 4.0% growth. (RTT)

Japan: Tiny rise in inflation leaves it well below BOJ’s goal. Japan’s key inflation gauge inched higher before an expected downturn in price pressures later this year adds to challenges facing the central bank. Consumer prices excluding fresh food rose 0.8% in March from a year earlier, compared with a 0.7% median forecast of economists, data from the ministry of internal affairs showed Friday. (Bloomberg)

Markets

Astro (Outperform, TP: RM2.00): To use Measat satellite transponders for RM1.49bn. Astro Malaysia Holdings’ unit has inked a USD360m (RM1.49bn) agreement with Measat Global to use the 12 transponders on the latter's satellite over a 15-year period. (The Star) Comments: The Proposed Utilisation will allow MBNS to utilise the transponder capacity on the M3d satellite which is expected to be launched in year 2022.to satisfy their business continuity plan. With improvements in video compression technology, it is expected that the 12 transponders on the M3d satellite will be able to replace the 18 existing transponders on the M3 and M3a satellites. Maintain our Outperform rating on Astro with an unchanged TP of RM2.00.

CIMB (Outperform, TP: RM6.50): CIMB Thai 1Q net profit up 92.4% on year at THB325m. CIMB Group Holdings’ 94.83%-owned subsidiary CIMB Thai Bank PCL's net profit rose 92.4% to THB325.01m (about RM42m) in the 1QFY19 from THB168.89m a year earlier on growth in operating income and lower provisions. The operating income grew 3.4% while provisions dropped 17.4%. (The Edge)

UEM Sunrise (Outperform, TP: RM1.10): Served arbitration notice for RM29m claim. UEM Sunrise has been served a notice of arbitration by Ireka Corp’s unit, seeking a declaration sum of RM29.25m in relation to disputes and differences arising from a contract finalisation. The project comprises a 35-storey block of serviced apartments with a 5-storey car park and recreational facilities and swimming pool, a 16-storey office tower with a three storey car park, a single-storey commercial block, and a single-level car park in the basement. (The Edge)

Bintai Kinden: Drops plans for RM350m project in Melaka Bintai Kinden’s plan to jointly develop a Melaka project, with an estimated GDV of RM350m, has been dropped following the lapse of an agreement. The Memorandum of Understanding (MoU) signed by its unit Kejuruteraan Bintai Kindenko SB with Vista Springs Development SB lapsed today. (The Edge)

Vsolar: To collaborate with HK firm on manufacturing fast chargers. Vsolar Group entered into a collaboration agreement with Hong Kong’s PB Control Limited (PB) to examine the viability of establishing a production facility in Malaysia for the manufacture of heavy duty fast chargers and related range of electric vehicle solutions. The agreement involves the supply, installation and commissioning of industrial electrical charging systems or infrastructure at various in-bound logistics terminals in China. (The Edge)

BAT: To consider reopening another Malaysian factory in longer term. British American Tobacco (M) will consider reopening its factory again in Malaysia depending on the market situation for legal cigarettes in the country. It has opened a factory in Johor Baru so that can maintain manufacturing license. The Group would like to retain our manufacturing license. (StarBiz)

Widad: To build private hospital in Bandar Kinrara. Widad Group has secured a RM190.5m contract to build a 200-bed private hospital in Puchong, Selangor. It has received the letter of award for the project from Wardah Properties SB. The scope of works includes designing, constructing and completing the development of the project. (The Star)

Market Update

The FBM KLCI might open with a positive bias after the S&P 500’s attempt to reclaim a record high faltered as the benchmark’s three week winning streak came to an end. Gains on Thursday, as the market wrapped up trading ahead of the Good Friday public holiday, were not quite enough to push the benchmark higher from last Friday’s close, which had brought it within 1% of its peak. US stocks began Thursday on the back foot despite retail sales posting their biggest rise since 2017. The S&P 500 overcame an early drop to finish 0.2% higher. The Dow Jones Industrial Average added 0.4% and the Nasdaq Composite ended less than 0.1% higher. Showing some stronger form were social media site Pinterest and video conferencing company Zoom, which both saw their shares open sharply higher as they made their Wall Street debut. For this Easter-shortened week, the S&P 500 closed 0.1% lower for its first decline in four weeks. The Europe-wide Stoxx 600 ticked up 0.2%. Frankfurt’s Xetra Dax 30 rose 0.6%, but London’s FTSE 100 dropped 0.2%. Back home, the FBM KLCI index lost 1.17 points or 0.07% to 1,619.73 points on Thursday. Trading volume decreased to 2.89bn worth RM2.17bn. Market breadth was negative with 397 gainers as compared to 453 losers. The regional markets also finished lower today with shares in Japan leading the region. The Nikkei 225 was down 0.84% while Hong Kong's Hang Seng was off 0.54% and China's Shanghai Composite was lower by 0.40%.

Market Update

The FBM KLCI might open with a positive bias after the S&P 500’s attempt to reclaim a record high faltered as the benchmark’s three week winning streak came to an end. Gains on Thursday, as the market wrapped up trading ahead of the Good Friday public holiday, were not quite enough to push the benchmark higher from last Friday’s close, which had brought it within 1% of its peak. US stocks began Thursday on the back foot despite retail sales posting their biggest rise since 2017. The S&P 500 overcame an early drop to finish 0.2% higher. The Dow Jones Industrial Average added 0.4% and the Nasdaq Composite ended less than 0.1% higher. Showing some stronger form were social media site Pinterest and video conferencing company Zoom, which both saw their shares open sharply higher as they made their Wall Street debut. For this Easter-shortened week, the S&P 500 closed 0.1% lower for its first decline in four weeks. The Europe-wide Stoxx 600 ticked up 0.2%. Frankfurt’s Xetra Dax 30 rose 0.6%, but London’s FTSE 100 dropped 0.2%.

Back home, the FBM KLCI index lost 1.17 points or 0.07% to 1,619.73 points on Thursday. Trading volume decreased to 2.89bn worth RM2.17bn. Market breadth was negative with 397 gainers as compared to 453 losers. The regional markets also finished lower today with shares in Japan leading the region. The Nikkei 225 was down 0.84% while Hong Kong's Hang Seng was off 0.54% and China's Shanghai Composite was lower by 0.40%.

Source: PublicInvest Research - 19 Apr 2019

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