PublicInvest Research

Author: PublicInvest   |   Latest post: Wed, 21 Aug 2019, 10:13 AM


PublicInvest Research Headlines - 11 Jun 2019

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US: Job openings remained high in April before hiring eased. US job openings remained near a record in April, signaling demand for workers was firm ahead of weaker hiring in the following month that’s raised concerns the economy is slowing. The number of positions waiting to be filled dipped by 25,000 in April to 7.45m, according to the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS. The quits rate held at 2.3%, matching the highest level of the economic expansion and suggesting workers remain confident in their ability to find a job. Total vacancies exceeded the number of unemployed Americans by 1.63m, a record in data since 2000. That may support the idea that part of the reason behind May’s hiring slowdown owed to employers’ difficulty finding qualified workers, amid the lowest jobless rate in a half-century. However, openings may ebb in coming months as slowing economic growth and uncertainty around President Donald Trump’s trade policies lead companies to postpone hiring and investment decisions. (Bloomberg)

UK: GDP contracts for second month. The UK economy contracted for the second straight month in April on weak manufacturing, data from the Office for National Statistics showed. GDP fell 0.4% MoM on a monthly basis after easing 0.1% in March. GDP was forecast to drop again by 0.1%. In three months to April, GDP expanded at a slower pace of 0.3% after climbing 0.5% in the 1Q. In April, industrial production declined for the first time this year on sharp fall in manufacturing. Production decreased 2.7% MoM, reversing a 0.7% rise in March and bigger than the expected 1% drop. Manufacturing output contracted 3.9% MoM, in contrast to a 0.9% rise in March. This was the biggest fall since June 2002 and larger than the forecast of 1.4% decrease. (RTT)

US, China: Trump ready to slap more tariffs on China after G20 meeting. US President Donald Trump said on Monday he was ready to impose another round of punitive tariffs on Chinese imports if he cannot make progress in trade talks with China's President at a Group of 20 summit later this month. Since two days of talks to resolve the US China trade dispute last month in Washington ended in a stalemate, Trump has repeatedly said he expected to meet President Xi Jinping at the June 28-29 summit in Osaka, Japan. China has not confirmed any such meeting. Trump said last week he would decide after the meeting of the leaders of the world's largest economies whether to carry out a threat to impose tariffs on at least USD300bn in Chinese goods. On Monday, Trump said he still thought the meeting with Xi would happen. “We are scheduled to talk and to meet. I think interesting things will happen. Let's see what happens," Trump said. (Reuters)

China: Export rise unexpectedly; imports fall more-than-forecast. China's exports grew unexpectedly in May as companies front-loaded ahead of US tariff hike, while imports declined more-than-expected signaling weak domestic activity. Data from the General Administration of Customs showed that exports advanced 1.1% YoY in May confounding expectations for a decline of 3.9%. On the other hand, imports decreased 8.5% annually compared to the expected drop of 3.5%. As a result, overall trade balance showed a surplus of USD41.65bn in May, much bigger than the forecast of USD22.3bn. Exports to the US fell 4.2% YoY, while imports from the US plunged 26.8%. (RTT)

China: Forex reserves increase in May. China's foreign exchange reserves increased in May after falling a month ago, data from the People's Bank of China showed. Foreign exchange reserves rose by USD6 bn to USD 3.101trn in May. Economists had forecast reserves to fall to USD3.09trn.Gold reserves were valued at USD79.83bn at the end of May compared to USD78.35bn in the previous month. Gold reserves of China increased for a sixth month in a row in May. (RTT)

Japan: 1Q GDP expands 0.6% QoQ, 2.2% YoY. Japan’s GDP gained a seasonally adjusted 0.6 % QoQ in the first three months of 2019, the Cabinet Office said. That's an upward revision from 0.5% in last month's preliminary reading, and it was in line with expectations. On an annualized yearly basis, GDP was up 2.2% - again matching forecasts and up from 2.1% in the preliminary reading. Nominal GDP was unrevised at 0.8% QoQ, as expected. Business spending was revised up to 0.3% from -0.3%, although it fell shy of expectations for 0.5%. Private Consumption was at -0.1% QoQ, unrevised and as expected. (RTT)

Japan: Overall bank lending climbs 2.6% in May. Overall bank lending in Japan was up 2.6% YoY in May, BoJ said - coming in at JPY 536.8trn. That follows the 2.4% annual increase in April. Excluding trusts, bank lending jumped 2.8% YoY to JPY 467.6trn- up from 2.5% in the previous month. Lending from trusts was steady at 1.5% YoY, or JPY 69.2trn, while lending from foreign banks skyrocketed an annual 20.3% to JPY 2.942 trn. (RTT)

Japan: April current account surplus JPY1,707bn. Japan had a current account surplus of JPY 1,707.4bn in April, the Ministry of Finance said - down 9.5% YoY. That exceeded expectations for a surplus of JPY 1,514.5bn, following the JPY 2,847.9bn surplus in March. The trade balance fell to a JPY 98.2bn deficit versus expectations for a surplus of JPY 5.0 bn following the JPY 700.1bn surplus in the previous month. Imports were up 6.9% YoY to JPY 6.48trn, while exports sank an annual 3.7% to JPY 6,388trn. (RTT)


Scientex: Buys land to expand property development to Penang. Scientex is buying six parcels of freehold land measuring 7.83m square feet in Penang to expand its land bank for property development activities to the north from the southern part of Peninsular Malaysia. Its unit inked the agreement to buy the land in North Seberang Perai from Palma Indah SB for RM109.6m. The land bank expansion was in line with the group's vision to build 50,000 affordably-priced quality homes throughout the nation by 2028. (The Edge)

Malaysia Smelting Corp: Delays tin shipments to customers. Malaysia Smelting Corp (MSC) is delaying shipments to customers around the world due to a shortage of concentrate. MSC declined to comment on the matter when contacted by Reuters. Tin is a vital ingredient for electronic components for mobile devices, electric vehicles, robotics, renewable energy and energy storage industries. It is also used to make chemicals and coat other metals to prevent corrosion. (StarBiz)

Polymer Link: To buy land in Port Klang for RM14.4m. Polymer Link Holdings has proposed to acquire a leasehold industrial land in Perdana Industrial Park, Port Klang for a total purchase consideration of RM14.40m to construct a factory. The 99-year leasehold land has a net area of 19,974sqm. The acquisition would enable PLSB to build its own factory and further strengthen the capabilities of its manufacturing activities of pulverising of pellets in its natural form or compounded in colours to serve a wide range of plastic product manufacturers. (The Edge)

Ikhmas Jaya: Bags two subcontract jobs worth RM75.3m. Ikhmas Jaya Group has secured two subcontract jobs for the Setiawangsa– Pantai Expressway (SPE or better known as DUKE Phase 3) with a combined value of RM75.3m, from Knusford Construction SB. This brings the group's YTD contract wins to RM470m. The group has accepted the letter of award for the two newest job wins or projects, both of which involve the construction of bridge structures for different parts of the SPE. (The Edge)

Icon Offshore: Bags RM39m AHTS contract from Shell. Icon Offshore has bagged a RM39m contract to provide anchor handling tugs supply (AHTS) to Sarawak Shell /Sabah Shell Petroleum Co Ltd (Shell). The contract was awarded on May 3 but was only allowed to release the announcement. The term of the contract is more than two years or 825 days, with an extension option of up to two years, with one-year extension period each. The contract value of RM39m is inclusive of the optional extension period. (The Edge)

MAHB: Passenger traffic up 1.3% YoY in May. Malaysia Airports Holdings (MAHB's) network of airports registered a 1.3% YoY growth with 10.6m passenger movements in the month of May, making it a “uniquely positive” month, despite the Ramadhan fasting period which began on May 6. This indicates continuing latent demand for both domestic and international air travel.. (The Edge)

IPO: Mestron retail offering oversubscribed by 17.53 times. The retail portion of Mestron Holdings’ IPO has been oversubscribed by 17.53x. A total of 5,720 applications for 731.97m new shares valued at RM117.12m were received for the retail offering of 39.5m new shares. Meanwhile, 8.75m new shares allocated to eligible directors and employees were fully subscribed while the allotment of 188.75m shares for selected and Bumiputera investors had been placed out. (StarBiz)

Market Update

The FBM KLCI might open higher today after the Dow Jones Industrial Average rose 78.74 points, or 0.3%, to 26,062.68, marking its longest winning streak since May 2018. The S&P 500 added 13.39 points, or 0.5%, to 2,886.73, and the Nasdaq Composite index climbed 81.07 points, or 1.1%, to 7,823.17. President Donald Trump late Friday tweeted that he had suspended plans to impose tariffs on Mexico after reaching a deal with that country over stemming the flow of illegal immigration. But he warned Mexico in a series of tweets on Sunday that if cooperation should fail, “We can always go back to our previous, very profitable, position of tariffs.” In Europe, stocks were mostly higher, with the Stoxx Europe 600 gaining 0.2%.

Back home, the FBM KLCI index gained 6.14 points or 0.37% to 1,655.47 points on Monday. Trading volume increased to 2.28bn worth RM1.79bn. Market breadth was positive with 613 gainers as compared to 276 losers. The regional stocks also finished mostly higher, with Japan’s Nikkei 225 closed up 1.2% as revised data reaffirmed first-quarter GDP growth. Hong Kong’s Hang Seng Index surged about 2.3 % a day after hundreds of thousands of people filled the streets to protest a potential new extradition law with China, which many say encroaches on the rights of Hong Kong citizens. The Shanghai Composite rose 0.9% and the smaller-cap Shenzhen Composite gained 1.3%. Australia’s S&P/ASX 200 was closed for a holiday.

Source: PublicInvest Research - 11 Jun 2019

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