PublicInvest Research

Author: PublicInvest   |   Latest post: Mon, 22 Jul 2019, 10:32 AM


PublicInvest Research Headlines - 3 Jun 2019

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US: Inflation perks ups, slowing economy may limit gains. US consumer prices increased by the most in 15 months in April, but a cooling in spending pointed to a slowdown in economic growth that could keep inflation pressures moderate. The report from the Commerce Department on Friday supported Federal Reserve Chairman Jerome Powell’s view that a recent disinflationary trend “may wind up being transient.” Inflation remains below the US central bank’s 2.0% target. (Reuters)

US: Consumer sentiment improves less than initially estimated in May. Reflecting the collapse of US-China trade talks, the University of Michigan released a report on Friday showing a bigger than expected downward revision to its reading on US consumer sentiment in the month of May. The consumer sentiment index for May was downwardly revised to 100.0 from the preliminary reading of 120.4. The index remains notably higher than the final April reading of 97.2 but came in below economists for a reading of 101.5. Although consumer sentiment remained at very favorable levels, confidence significantly eroded in the last two weeks of May. (RTT)

US: Personal income and spending climb more than expected in April. Personal income in the US rose by more than expected in the month of April, according to a report released by the Commerce Department on Friday, with the report also showing a slightly bigger than expected increase in personal spending. The Commerce Department said personal income climbed by 0.5% in April after inching up by 0.1% in March. (RTT)

EU: Germany's retail sales rebound in April. Germany's retail sales rebounded in April from last year driven by the timing of Easter, data from Destatis showed Friday. Retail sales rebounded at a faster-than expected pace of 4% annually in April, reversing a 2% fall in March. Sales were forecast to grow moderately by 1.3%. The timing of Easter had a positive effect on the YoY development of turnover in April, Destatis said. Retail sales fell 2% MoM in April, after staying flat in March. This was the first decrease in four months. (RTT)

EU: German inflation rate drops sharply below ECB target in May. German annual inflation eased sharply in May after exceeding the European Central Bank’s target level in the previous month for the first time since Nov, preliminary data showed on Friday. The drop to the lowest level since Feb 2018 was expected given that the sharp rise last month was the result of special effects like the Easter holiday falling later in April this year than last, driving up the cost of package holidays. German consumer prices rose by 1.3% YoY after an increase of 2.1% in the previous month, the Federal Statistics Office said. (Reuters)

UK: House price growth slows in May. UK house prices increased at a slower pace in May, data from Nationwide Building Society showed Friday. House prices grew 0.6% YoY in May, slower than the 0.9% increase seen in April. Economists had forecast a faster growth of 1.2%. On a monthly basis, house prices dropped 0.2%, in contrast to a 0.3% rise a month ago. Prices were forecast to remain flat in May. Housing market trends are likely to continue to mirror developments in the broader economy. (RTT)

India: Growth falls below China expansion. India's economic growth eased more-than-expected to a 5-year low in the March quarter on weaker consumption and demand, and was behind China's pace of expansion for the first time in nearly two years. GDP expanded 5.8% YoY in the March quarter, slower than the 6.6% growth seen in the previous quarter, data from the National Statistical Office showed Friday. The pace of growth was slower than the 6.3% rise economists had forecast. The agency revised down the growth rate for the 2018-19 financial year ended March to 6.8% from 7%. (RTT)

Japan: Housing Starts falls for first time in 5 months. Japan's housing starts declined for the first time in five months in April, data from the Ministry of Land, Infrastructure, Transport and Tourism revealed on Friday. Housing starts dropped 5.7% YoY in April, after a 10.0% increase in March. Economists had forecast the housing starts to fall 0.8%. This was the first decline since Dec. Annualized housing starts decreased to 931,000 in April from 989,000 in the previous month. The expected level was 983,000. Construction orders received by 50 big contractors declined 19.9% in April from last year compared to a sharp growth of 66.1% in March. (RTT)


Press Metal: To acquire 25% stake in Indonesian alumina refinery firm. Press Metal Aluminium Holdings has entered into a MoU with PT Bintan Alumina Indonesia (PT BAI) and its direct and indirect shareholders, comprising Shandong Nanshan Aluminium Co Ltd, Redstone Alumina International Pte and PT Makhota Karya Utama, to negotiate a proposed acquisition of a 25% stake in PT BAI. The subscription in PT BAI is subjected to completion of the necessary due diligence and agreement on the final terms and conditions of the subscription. (The Edge)

Mitrajaya: To mutually terminate RM159.4m job with Medini Development . Mitrajaya Holdings’ wholly-owned subsidiary Pembinaan Mitrajaya SB (PMJ) has agreed with Medini Development SB (MDSB) to mutually terminated a contract to undertake a superstructure works for an office tower development at Bandar Medini, Iskandar Malaysia, Johor, with a contract value of RM159.4m. “The mutual termination will result in the Mitrajaya’s construction division outstanding book order to be reduced by RM112.2m, as part of the works for this contract has started and has been recognised in the financial statement of the group FYE Dec 31, 2018,” Mitrajaya said. (The Edge)

Tanco, Eduspec: Signs lease agreement . Tanco and Eduspec have entered into a 20-year land lease agreement to lease a freehold commercial land in Negeri Sembilan for Eduspec to construct and operate the edutainment theme park. Tanco said its wholly-owned subsidiary Palm Springs Development SB has entered into a lease agreement with Time IT in E (Sabah) SB, a wholly-owned subsidiary of Eduspec Holdings to lease Time IT a 7.5454 acres land in Port Dickson. Additional to the lease agreement, Palm Springs shall grant Time IT an option to purchase the land at an agreed purchase price of RM20 million, provided such call option must be exercised by Time IT within the first five years from the date of commencement of the lease. (The Edge)

DBE Gurney: To jointly develop affordable homes in Perak with related co. DBE Gurney Resources has inked a partnership with a related party to jointly develop affordable homes with a GDV of RM100m in Perak. Under the joint development agreement, DBE Development and Silver Homes shall be entitled to the net GDV of the development project, which totals RM100 million, on a 75:25 basis. (The Edge)

MAHB: Reports 66% drop in 1Q profit to RM149.6m. Malaysia Airports Holdings’ (MAHB) net profit plunged over 66.3% to RM149.6m in the 1QFY19 against RM444.6m in the same quarter a year ago. Excluding one-off gains, MAHB’s PBT decreased by 11.6% or RM21.5m as compared to the corresponding quarter last year due to higher expenditure, mainly on utilities due to increase in tariff effective July 2018 and maintenance recorded during the period. (StarBiz)

IPO: HPMT oversubscribed by 7 times. HPMT Holdings, which is en route for a Main Market listing on June 12, said the shares it made available for public subscription under the IPO has been oversubscribed by seven times. It said a total of 4,483 applications for 131.4m shares were received from the Malaysian public for the 16.4m shares available. (StarBiz)

Market Update

Sentiment in US markets soured last Friday as President Trump’s tariffs on Mexico sparked fears of a US recession, this coupled with escalating tensions with China. Over the weekend, the President trained his guns on India, removing the latter’s developing nation status, and with it certain preferential tariff treatments. US benchmarks tumbled across the board, unsurprisingly, with the Nasdaq Composite leading the way with a 1.5% decline. The Dow Jones Industrial Average and S&P 500 slumped 1.4% and 1.3% respectively meanwhile. European markets fared no better on concerns that any US-led recession will weigh heavily on global conditions. Add to that the ongoing spat between Italian officials and the European Central Bank/European Commission, nerves are understandably frayed. On the day, Germany’s DAX and Spain’s IBEX 35 led major markets lower with declines of 1.4% and 1.7%. France’s CAC 40 and UK’s FTSE 100 both fell 0.8%. Italy’s FTSE MIB slipped 0.7% meanwhile. Asian shares were mixed earlier in the day, with the US-China trade tiff weighing heaviest. Reports of weak China manufacturing numbers also didn’t help. Benchmarks in Japan, China and Hong Kong fell 1.6%, 0.2% and 0.8% respectively, though Indonesia and Malaysia’s gained 1.7% and 0.9%.

DBE Gurney is partnering Silver Homes Development Sdn Bhd in 75%:25% arrangement to develop 482 residences on 499 pieces of leasehold land, measuring 17.23 acres in Perak, with gross development value (GDV) estimated at RM100mn. Press Metal Holdings has entered into an MoU with PT Bintan Alumina Indonesia (PT BAI), alongside the latter's direct and indirect shareholders to negotiate a proposed acquisition of a 25% stake in PT BAI, allowing it to secure long-term alumina supply. Opcom Holdings’s executive chairman Tan Sri Mokhzani Mahathir has resigned due to personal reasons.

Source: PublicInvest Research - 3 Jun 2019

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