PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 12 Nov 2019, 9:48 AM


PublicInvest Research Headlines - 15 May 2019

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US: Fed officials pledge rate patience amid trade and Trump pressure . Federal Reserve officials are sticking with their pledge for patience on interest rates, shrugging off President Donald Trump’s escalating trade war and his pressure for a cut. New York Fed President John Williams and his Kansas City colleague Esther George, who vote on policy this year, acknowledged that new tariffs on Chinese imports could affect the outlook for US inflation and growth. But both saw no need for the central bank to react. Fed officials held rates steady at their April 30-May 1 meeting and said they will be “patient” on judging the next move in policy after previously signaling they saw no need for a move all year. (Bloomberg)

US: Import prices edge up 0.2% in April, much less than expected. With a drop in prices for non-fuel imports partly offsetting another jump in prices for fuel imports, the Labor Department released a report on showing US import prices rose by much less than expected in the month of April. The Labor Department said import prices crept up by 0.2% in April after climbing by 0.6% in March. Economists had expected import prices to increase by 0.7%. (RTT)

EU: Industrial production falls for second month. EU industrial production fell for the second straight month in March, figures from Eurostat showed. Industrial production declined 0.3% MoM in March, following a 0.1% fall in Feb and in line with economists' expectation. The latest decline was driven by 1.0% fall in non-durable consumer goods and a 0.3% decline in energy production. On a YoY basis, industrial production decreased 0.6% after remaining flat in the previous month. Economists had forecast a 0.8% fall. (RTT)

UK: May to bring Brexit deal back to Parliament at start of June. Theresa May set a date for her final Brexit showdown, promising to bring her deal back to Parliament at the start of June. Talks with the opposition Labour Party haven’t yielded an agreement, but she’s hoping members of Parliament, stung by voter revolts, will back her in order to end the process that’s tearing both main parties apart. (Bloomberg)

UK: Wage growth remains strong, jobless rate lowest since 1974. The UK wage growth remained strong in the 1Q as the jobless rate hit its lowest since 1974, data from the Office for National Statistics revealed Tuesday. The ILO jobless rate came in at 3.8% in the first quarter, while the rate was expected to remain unchanged at 3.9%. The rate has not been lower since last quarter of 1974. (RTT)

Japan: Overall bank lending rises 2.4% on year in April . Overall bank lending in Japan was up 2.4% YoY in April, the BOJ said, coming in at JPY537.652trn.That was up from the downwardly revised 2.3% increase in March (originally 2.4%). Excluding trusts, bank lending was up an annual 2.5% at JPY468.173trin. Lending from trusts gained 1.5% YoY at JPY69.478trn, slowing from 1.6% a month earlier. Lending from foreign banks jumped an annual 3.9% to JPY2.789trn after easing 0.2% in March. (RTT)

Indonesia: Worried about being added to Trump’s trade hit list. Indonesia is worried about being targeted by Donald Trump in a wider protectionist push, as trade tensions between the US and China continues to escalate. The Southeast Asian nation’s large trade surplus with the US may invite further scrutiny by the Trump administration even as the spat between the world’s two biggest economies offers potential gains to Indonesia. A prolonged dispute may also weigh on Indonesia’s current account deficit, foreign inflows and currency. (Bloomberg)


TNB (Trading Buy, TP: RM14.12): New income stream. Tenaga Nasional (TNB) is expected to see earnings contribution from the National Fiberisation and Connectivity Plan (NFCP) beginning next year. According to its newly appointed president and CEO Amir Hamzah Azizan, the energy group is currently in the phase of exploring commercially viable penetration for its fiberisation and connectivity business nationwide. This followed the recent success of the NFCP pilot project in Jasin, Melaka. (StarBiz)

AirAsia (Outperform, TP: RM3.50), AAX (Neutral, TP: RM0.23): Takes legal action against Mavcom. AirAsia and AAX have filed a judicial review challenging the Malaysian Aviation Commission (Mavcom) for declining to decide on the disputes between Malaysia Airport (Sepang) SB and the airlines with regard to the passenger service charge (PSC) and alleged poor level of service at klia2. (The Edge)

Gamuda (Neutral, TP: RM2.88): Gamuda Land unveils new access road, community hall for Kundang Estates. Gamuda Land officially opened the new access road and community hall for its boutique township project of Kundang Estates. Launched in Dec 2016, Kundang Estates is an 89-acre, low-density boutique residential development located in the town of Kundang, Selangor. It has a GDV of RM628m. (The Edge)

Daibochi: Revises dividend policy. Daibochi has revised its dividend policy to pay out annual dividend of not less than 30% of the group's normalised reported net profit attributable to shareholders for the financial year. For the 1QFY19, the company made a net profit of RM1.54m on revenue of RM110.8m. The company said it will maintain the dividend policy subject to ongoing assessment. (StarBiz)

Damansara Realty: To jointly develop 68 shop lots in Johor Bahru. Damansara Realty is teaming up with a private developer to develop a commercial project comprising 68 units of shoplots on a plot of land in Johor Bahru, with a net development area of 2.9 acres. The shoplots will comprise 3-storey and 4-storey freehold units, 40 of which will be for non-Bumiputera buyers while the remainder will be reserved for Bumiputeras. (The Edge)

Picorp: Wins RM12.16m contract. Progressive Impact Corp (Picorp) has bagged a field measurement services contract for total petroleum hydrocarbon contamination in soil in Indonesia worth RM12.16m. The contract is an addition to an earlier contract worth RM31.35m that was awarded on March 21, 2019. (StarBiz)

YFG: Clinches RM40m sewerage related works contract for Kuantan housing project. YFG has won a RM40m contract to undertake sewerage and related works for a housing development project in Kuantan. YFG was awarded the job by Kencana Amanjaya SB. The subsidiary will perform external sewerage, sewerage treatment plant, water reticulation, street lighting, telephone services, as well as building mechanical and electrical services. (The Edge)

Media Chinese International: Issues profit alert, expects losses in FY19. Media Chinese International Ltd (MCIL) has issued a profit warning, warning shareholders that it may record a net loss for the FY19. In a notice filed with HKEx, which was also announced on Bursa, MCIL blamed the weak results to a provision for the impairment of goodwill of approximately USD15m in relation to a business unit of the group. (The Edge)

Market Update

The FBM KLCI might open higher today after stocks bounced back from their worst day in months on Tuesday as President Donald Trump reiterated China still wanted to ink a trade deal with the US, allaying some of the market’s concerns over rising tensions between the world’s two largest economies. On Wall Street, the S&P 500 finished 0.8% higher, pulling back from an intraday rise of as much as 1.5%. The Nasdaq Composite was up 1.1%, following its 3.4% fall yesterday, while the Dow Jones Industrial Average added 0.8%. Uber, the ride-hailing service, posted its first advance since it floated on the New York Stock Exchange on Friday. The stock rose 7.7% today, but remains 11.2% below its USD45 offer price. London’s FTSE 100 rose 1.1% amid demand for its mining stocks. Frankfurt’s Xetra Dax 30 added 1%.

Back home, the FBM KLCI index lost 1.90 points or 0.12% to 1,599.19 points on Tuesday. Trading volume increased to 2.82bn worth RM2.46bn. Market breadth was negative with 386 gainers as compared to 488 losers. Selling pressure remained on other Asian indices, where weakness continued into Tuesday after Beijing’s retaliation, although China’s currency also found support. Hong Kong’s Hang Seng index sank 1.5% as traders caught up with the latest trade-related drama following a holiday on Monday. China’s CSI 300 fell 0.6% and Japan’s Topix was down 0.4%.

Source: PublicInvest Research - 15 May 2019

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