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PublicInvest Research

Author: PublicInvest   |   Latest post: Fri, 13 Dec 2019, 10:07 AM

 

PublicInvest Research Headlines - 15 Aug 2019

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Economy

US: Import prices unexpectedly increase amid rebound in fuel prices. Import prices in the US unexpectedly showed a modest increase in the month of July, according to a report released by the Labor Department on Wednesday. The Labor Department said import prices rose by 0.2% in July after plunging by a revised 1.1% in June. Economists had expected import prices to come in unchanged compared to the 0.9% slump originally reported for the previous month. The unexpected increase in import prices came as prices for fuel imports surged up by 1.8% in July after plummeting by 7.3% in June. (RTT)

US: Bullard says avoiding recession makes Fed review well-timed. Federal Reserve Bank of St. Louis President James Bullard called current US economic conditions “quite good” and said the goal of the central bank’s policy framework review should be to avoid a Japan-style deflationary trap. “Unemployment is near a 50-year low. Inflation is low and stable,” Bullard said. “The economy’s not in recession, so it’s actually a good time to do strategic thinking for the future.” Bullard dissented in June in favor of a quarter-point rate cut, which the Federal Open Market Committee delivered in July. (Bloomberg)

EU: Euro zone GDP slows in 2Q as growth in Germany shrinks. The euro zone's GDP barely grew in the 2Q of 2019, data showed on Wednesday, as economies across the bloc lost steam and the largest, Germany, contracted thanks to a global slowdown driven by trade conflicts and uncertainty over Brexit. European Union statistics office Eurostat said GDP growth in the 19-country euro zone was 0.2% in the 2Q versus the previous quarter, a slowdown from 0.4% in the first three months of 2019. The GDP flash estimates numbers, including YoY growth of 1.1% from the 2Q of 2019. (Reuters)

UK: Inflation rate unexpectedly rises above BOE target. UK inflation unexpectedly accelerated last month, boosted by the price of computer games and hotel accommodation. The pickup to 2.1% left consumer price inflation above the Bank of England’s 2% target, figures from the Office for National Statistics show. Economists expected the rate to slow to 1.9% from 2% in June. The retail prices index rose 2.8% from a year earlier, as forecast. The result is important for rail commuters as increases in regulated fares, which cover around 40% of all fares, are capped based on the July reading. (Bloomberg)

China: Economy worsens in July, industrial growth at 17-year low as trade war escalates. China’s economy stumbled more sharply than expected in July, with industrial output growth cooling to a more than 17-year low, as the intensifying US trade war took a heavier toll on businesses and consumers. Activity in China has continued to cool despite a flurry of growth steps over the past year, raising questions over whether more rapid and forceful stimulus may be needed, even if it risks racking up more debt.. (Reuters)

China: Curbs gold imports as trade war heats up. China has severely restricted imports of gold since May, bullion industry sources with direct knowledge of the matter told Reuters, in a move that could be aimed at curbing outflows of dollars and bolstering its yuan currency as economic growth slows. The world’s second largest economy has cut shipments by some 300-500 tonnes compared with last year - worth USD15-25bn at current prices, the sources said, speaking on condition of anonymity because they are not authorized to speak to the media. The restrictions come as an escalating trade confrontation with the US has dragged China’s pace of growth to the slowest in nearly three decades and pressured the yuan to its lowest since 2008. (Reuters)

India: Wholesale price inflation slows in July. India's wholesale price inflation slowed in July, data from the Ministry of Commerce & Industry showed on Wednesday. The wholesale price index climbed 1.1% YoY in July, after a 2% increase in June. Economists had expected a 1.8% rise. The build-up inflation rate in the financial year was 1.1% in July compared to 3.1% in the corresponding period last year. The wholesale prices for food articles grew by 1.3% in July and that of non-food articles rose 0.1%. Fuel and power prices declined by 1.5% in July and prices of manufacturing products fell 0.3%. (RTT) 

Markets

Mega First (Outperform, TP: RM5.04): Calls off mixed development project in Perak. Mega First Corp announced that two of its units have called off a mixed development project located in Kinta, Perak in JV with Menteri Besar Incorporated (Perak) but that an indirect subsidiary has been given the option to secure a significant plot of land for a solar photovoltaic plant. Under the option agreement, the unit is entitled to lease and or to buy the land from MBI Perak until Dec 31, 2020. (The Edge)

Cypark: Bags RM12.53m road construction contract. Cypark Resources has bagged a contract worth RM12.53m from the Department of National Solid Waste Management to design and build the access road to the integrated sanitary landfill site at Ladang Tanah Merah, Negeri Sembilan. The project is to be completed by Aug 25 next year, which is 12 months from the date of site possession on Aug 26 this year. (The Edge)

Fajarbaru: Forms JV with China’s Gezhouba Group for solar plant bid . Fajarbaru Builder Group inked a JV agreement with Chinese Gezhouba Group Overseas Investment Co Ltd (CGG) to bid for the construction of a large scale solar photovoltaic (LSS3) energy generating facility in Malaysia. The companies will be jointly submitting a tender to the Energy Commission of Malaysia via the Fajarbaru-Gezhouba- Potential Region Consortium. The JV will also seek to deliver solar photovoltaic energy to TNB with a total capacity of 40MWac In Tanjung Agas Industrial Area, Mukim Pekan 1, Pahang. Fajarbaru will take a 52% stake in the JV while its unit will hold 5% with rest under CGG’s unit. (The Edge)

T7 Global, Advanceon: To partner on ECRL activities . T7 Global has signed an agreement with Advancecon Holdings to collaborate on various activities in relation to the ECRL project. T7 said the partnership would allow the parties to tap into each other's respective expertise and resources. According to the statement, the collaboration agreement is not expected to have any material effect on the company's financial for the financial year ending Dec 31, 2019. (StarBiz)

Khee San: Says loan from Bank of China not secured by assets . Khee San has updated that the loan facility it obtained from Bank of China (M) (BOC) — under which it owes RM14.62m in outstanding repayments — is not secured by assets of the company. As such BOC stands as unsecured creditors, the candy manufacturer said in a filing in response to a Bursa Malaysia query on the notice of default of payment announced by the company on Aug 8. (The Edge)

ManagePay: Appointed as authorised installer for MYTV's customer premises equipment. ManagePay Systems has been appointed as an authorised installer to manage the delivery and installation of MYTV Broadcasting SB customer premises equipment (CPE) for Bantuan Sara Hidup Rakyat (BSHR) recipients. ManagePay accepted a letter of appointment (LoA) from MYTV for the project, whose scope of service includes identifying qualified BSHR recipients, and delivering and installing MYTV "Return to Sender" CPE comprising Digital Terrestrial Television (DTT) and Direct-To-Home (DTH) Set-top Boxes, UHF Antenna or Satellite Dish, RG6 cables and accessories at the respective BSHR recipients' houses. (The Edge) 

Market Update

The FBM KLCI might open lower after weak economic data from Germany and China renewed investor jitters over the health of the global economy, sending US and European stocks lower and reigniting a rally in government bonds as a closely watched part of the US yield curve inverted for the first time in more than a decade. Wall Street was sharply lower overnight, with the S&P 500 down 2.9% in a broad-based decline to 2840.60 — the lowest close in more than two months — with energy and financial stocks the biggest laggards. The Nasdaq Composite and Dow Jones Industrial Average both shed 3%. The move lower erased gains in the previous session when Washington announced a delay to some additional tariffs on Chinese imports, easing trade concerns. The slide in US equities followed declines in Europe, with the composite Stoxx Europe 600 ending the day down 1.7% and Germany’s Dax 2.2% lower.

Back home, the FBM KLCI index gained 7.43 points or 0.47% to 1,600.31 points on Wednesday. Trading volume increased to 2.41bn worth RM1.65bn. Market breadth was positive with 450 gainers as compared to 319 losers. The regional markets also finished higher with shares in Japan leading the region. The Nikkei 225 rose 0.98% while China's Shanghai Composite added 0.42% and Hong Kong's Hang Seng tacked on 0.08%.

Source: PublicInvest Research - 15 Aug 2019

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