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PublicInvest Research

Author: PublicInvest   |   Latest post: Tue, 25 Jun 2019, 11:52 AM

 

PublicInvest Research Headlines - 21 May 2019

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Economy

US: Consumer sentiment shows substantial improvement in May. Report released showed a substantial improvement in US consumer sentiment in the month of May. The preliminary report showed the consumer sentiment index surged up to 102.4 in May from 97.2 in April, reaching its highest level in fifteen years. Economists had expected the index to inch up to 97.5. The much bigger than expected increase by the headline index came as the index of consumer expectations soared to 96.0 in May from 87.4 in April. (RTT)

UK: House prices rise slightly in May. UK house prices increased marginally in May, reports said. House prices edged up 0.1% YoY, reversing a 0.1% drop in April. Meanwhile, asking price of a home in London declined 2.5% annually to GBP 621,589. Nationally, asking prices rose to GBP 308,290 in May. On a monthly basis, house prices grew 0.9% in May after gaining 1.1% in April which was the biggest rise for over a year. (RTT)

UK: Households’ financial wellbeing weakens in May. British households' financial wellbeing deteriorated at the fastest pace since September 2017, data showed. The household finance index, which measures households' overall perception of financial wellbeing, dropped to 42.5 in May from April's three-month high of 43.8. The score indicated the strongest level of pessimism towards current financial wellbeing among UK households since Sept 2017. Nevertheless, the outlook towards future finances was the least downbeat since last Nov. Data showed that growth in UK household expenditure continued in May. Households' perceived living expenses increased markedly in May. (RTT)

EU: Germany’s producer price inflation rises slightly. Germany's producer price inflation rose marginally in April. Producer prices climbed 2.5% YoY in April, faster than the 2.4% increase in March. The annual rate was expected to remain at 2.4%. Energy prices had the biggest impact on overall producer prices. Electricity prices had advanced 10.8%. Excluding energy, producer prices rose only 1.3%. Prices of intermediate goods grew 1 % and that of durable consumer goods by 1.6%. Costs of capital goods and non-durable consumer goods moved up 1.5 % each. On a monthly basis, producer prices advanced 0.5% in contrast to a 0.1% drop in March. This was the first increase in three months. (RTT)

Japan: GDP climbs 0.5% on quarter in Q1. Japan's GDP expanded a seasonally adjusted 0.5% on quarter in 1Q2019. That beat forecasts for a fall 0.1% and up from the downwardly revised 0.4% gain in the three months prior (originally 0.5%). On an annualized yearly basis, GDP was up 2.1%, exceeding expectations for a fall of 0.2% following the downwardly revised 1.6% gain in the previous three months (originally 1.9%). Nominal GDP was up 0.8% on quarter, beating forecasts for a rise of 0.1% and up from 0.5% in Q4.The GDP deflator added an annual 0.2%, matching forecasts following the 0.3 percent slide in the three months prior. (RTT)

Singapore: Exports slump further in April. Singapore's non-oil domestic exports declined sharply in April, albeit at a slower pace compared to March, driven by a fall in electronic and pharmaceutical shipments, data showed. Non-oil domestic exports slid 10% YoY annually in April, after decreasing 11.8% in March. Shipments were forecast to fall moderately by 4.6%. Exports of electronic goods declined 16.3% in April, following the 26.7% contraction in March. There were double-digit declines in the shipment of integrated circuits, disk media products and parts of ICs. At the same time, non-electronic NODX decreased by 7.9%. The fall was led by massive declines in pharmaceuticals, specialized machinery and petrochemicals. (RTT)

Indonesia: Central Bank says will ensure enough liquidity amid outflows, supports Rupiah. Liquidity in Indonesia's banking system has tightened due to capital outflows and rising demand for cash, but Bank Indonesia (BI) officials said it would continue to ensure there are ample funds in the system. BI said outflow linked to the US-China trade war has drained liquidity in the banking system, complicating efforts to support economic growth. Indonesia's stock index has lost around 9% so far this month with foreign investors posting a total of IDR 5.6trn (USD 387m) of net sell in local stocks. In the sovereign bond market, foreigners have sold IDR 4.84trn in the same period. (The Edge)

Markets

Dayang (Neutral, TP: RM1.25): To restructure debt with RM682.5m sukuk issuance , RM455m purchase of Perdana’s RCPS. Dayang Enterprise Holdings is proposing to restructure its debt with a RM682.5m sukuk issuance. From the money raised, RM365m will be advanced to its subsidiary Perdana Petroleum to settle the latter’s existing borrowings. Dayang, which owns a 60.48% stake in Perdana, will then subscribe for RM455m worth of redeemable convertible preference shares (RCPS) under a renounceable rights issue that Perdana is proposing to undertake. This will set off the RM455m debt that Perdana owes Dayang. (The Edge)

Pansar: Secures RM77.7m flood mitigation job in Sibu. Pansar was awarded the Sibu Flood Mitigation Project Phase 3 project by Kiasan Engineering SB. Pansar said the contract entails works for two pumping stations with water catchment, drainage upgrading and widening, and road topping along Jalan Kampung Hilir and Jalan Kampung Nangka. (The Edge)

EcoFirst: Calls off Penang developer acquisition . EcoFirst Consolidated announced today that it has called off plans to acquire a 70% stake in private property development firm Geo Valley SB for RM44m cash. EcoFirst said the agreements were terminated because certain conditions were not fulfilled within the three-month deadline, and that the parties were unable to mutually agree to the extension of the cut-off date. (The Edge)

Securemetric: Bags contracts to supply digital security solutions for Vietcombank. Securemetric has won two contracts with a combined value of RM3.94m to supply digital security solutions to Vietcombank. The first contract, worth RM2.46m, was awarded by Prognostic Services Pte Ltd, for Securemetric to supply two-factor authentications solutions and hardware security module to Vietcombank. The other contract was awarded by IT consulting services firm Information and Networking Technology Joint Stock, for RM1.48m. Under this contract, Securemetric is to supply user licenses for 2FA, as well as install and integrate both 2FA and HSM for Vietcombank. (The Edge)

KPS: Buys Toyoplas for RM311m. Kumpulan Perangsang Selangor (KPS) is buying a 100% stake in plastic injection moulding firm Toyoplas Manufacturing (M) SB for RM311.25m cash. Toyoplas is an integrated player with mould fabrication, precision injection moulding and assembly operations across seven locations in China, Malaysia and Indonesia. (The Star)

D’Nonce, OCR: Team up to develop affordable flats in Penang. D’nonce Technology and OCR Group are teaming up to develop affordable apartments in Seberang Perai Tengah, Penang. OCR’s unit Fajar Simfoni SB (FSSB) has entered into a joint venture with D’nonce’s wholly-owned unit D’nonce Properties SB (DPSB) to develop a 19-storey block housing 281 units of flats and a seven storey car park podium on 6,774 sq m of land belonging to Tan Than Kau and Tan Tiang Yang. The project will have a GDV of RM85m. (The Edge)

Market Update

Technology-based shares felt the fallout of President Trump’s recent actions against China’s Huawei, with dampened sentiment spreading to the likes of Qualcomm, Nvidia and Advanced Micro Devices on concerns of significantly lower microchip sales. Alphabet’s Google has suspended business with Huawei that involves transferring hardware, software and other technical services while companies like Intel, Qualcomm and Broadcom will not supply Huawei until further notice. Reports also have it that US-China trade talks have stalled, and that China is in no rush to resume negotiations. The tech-heavy Nasdaq Composite underwhelmed with a 1.5% overnight decline, unsurprisingly. The S&P 500 and Dow Jones Industrial Average were down 0.7% and 0.3% respectively. European markets also ended the day lower with the technology sector also feeling the heat. Reports have also emerged of Germany’s Infineon suspending shipments to Huawei, news that resulted in a selloff in major European chipmakers. Germany’s DAX and France’s CAC 40 led the continent’s major markets lower, slumping 1.6% and 1.5% respectively. Spain’s IBEX 35 and UK’s FTSE 100 fell 0.9% and 0.5%. Asian markets were mixed however, with geopolitical developments taking precedence. Japan’s Nikkei 225 added 0.2% as the country’s economic growth in the first quarter rose above expectations. Australia’s ASX 200 rose 1.7% its conservative coalition secured an outright parliamentary majority on Monday following a shock election victory. Over in India, the SENSEX jumped 3.8% after exit polls showed Prime Minister Narendra Modi was likely to return to power following the country’s general election. China’s Shanghai Composite and Hong Kong’s Hang Seng indices slipped 0.4% and 0.6% however. Markets in Singapore and Malaysia were closed for a holiday.

EcoFirst Consolidated has called off plans to acquire a 70% stake in private property development firm Geo Valley Sdn Bhd for RM44m. Pansar has won a RM77.7m contract to undertake flood mitigation work in Sibu. Kumpulan Perangsang Selangor is acquiring plastic injection moulding company Toyoplas Manufacturing (Malaysia) Sdn Bhd for RM311.3m.

Source: PublicInvest Research - 21 May 2019

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