PublicInvest Research

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PublicInvest Research Headlines - 17 Sept 2019

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US: NY Fed 'Empire State' business index slips in Sept. The New York Federal Reserve said its gauge of business growth in New York state declined more than forecast in Sept, suggesting sluggish regional activity amid a US-China trade dispute There were conciliatory gestures between Washington and Beijing in a bid to defuse trade tensions as the two nations are expected to meet in Washington for trade talks in the coming weeks. The regional Fed’s “Empire State” index on current business conditions fell to 2.0 points this month from 4.8 points in August. For Sept, analysts polled by Reuters had forecast a reading of 4.0. A reading above zero suggests an expansion in regional business activity. (Reuters)

US: Business inventories climb more than expected in July. Business inventories in the US increased by more than expected in the month of July. The Commerce Department said business inventories climbed by 0.4% in July after coming in unchanged in June. Economists had expected inventories to rise by 0.3%. Retail inventories showed a notable 0.8% increase after slipping by 0.2% in the previous month, while manufacturing and wholesale inventories both rose by 0.2%. The report also said business sales rose by 0.3% in July compared to revised data showing sales were unchanged in June. The initial estimate showed sales inched up by 0.1% in June. Retail sales climbed by 0.8% and wholesale sales rose by 0.3%, but manufacturing sales edged down by 0.2%. With inventories and sales both rising, the total business inventories/sales ratio was unchanged from the previous month at 1.40. (RTT)

US: Consumer sentiment jumps as confidence around the economy rises. Sentiment in the US rose more than expected this month as consumers felt more confident about current and future economic conditions, according to preliminary data released Friday by the University of Michigan. The September print on consumer sentiment rose to 92 from 89.8 in August, the university’s Surveys of Consumers data showed. Economists polled by Dow Jones expected sentiment to rise to 91. The current economic conditions index also rose to 106.9 from 105.3. However, while consumers feel more confident about the economy, worries about the impact of tariffs on the economy increased in early September. Richard Curtin, chief economist for the Surveys of Consumers, said 38% of all consumers made “spontaneous references to the negative impact of tariffs, the highest percentage since March 2018.” (CNBC)

US, Japan: Trump Says US, Japan Reach Initial Agreement on Tariffs . President Donald Trump said his administration has reached an initial trade accord with Japan over tariffs and that he intends to enter into the agreement in coming weeks. In a notice to Congress on Monday, Trump also said the U.S. will be entering an “executive agreement” with Japan over digital trade. There was no mention by Trump if he’ll end his threat to slap tariffs on Japanese auto imports as part of the trade deal. (Bloomberg)

China: Slowdown deepens; industrial output growth falls to 17-1/2 year low. The slowdown in China’s economy deepened in Aug, with growth in industrial production at its weakest 17-1/2 years amid spreading pain from a trade war with the US and softening domestic demand. Retail sales and investment gauges worsened too, data released showed, reinforcing views that China is likely to cut some key interest rates this week for the first time in over three years to prevent a sharper slump in activity. Despite a slew of growth-boosting measures since last year, the world’s second-largest economy has yet to stabilize, and Beijing needs to roll out more stimulus to ward off a sharper slowdown. Industrial output growth unexpectedly weakened to 4.4% in Aug from the same period a year earlier, the slowest pace since Feb 2002 and receding from 4.8% in July. Analysts polled by Reuters had forecast a pick-up to 5.2%. (Reuters)

China: Property investment growth at 4-month high in Aug. China’s property investment grew at its fastest pace in four months in August, a boon for the economy as other sectors weaken from the Sino-US trade war and consumer demand slows. Sales growth accelerated to the highest in more than a year but a surge in demand could be concerning for policymakers who want to reduce high household debt and manage potentital bubble risk. Property investment is a significant contributor to growth in the world’s second-largest economy. A robust real estate industry has helped China counter a broader slowdown in its economy from a protracted trade war with the US. Property investment in August rose 10.5% from year earlier, quickening from July’s 8.5% pace, marking the fastest growth since April, according to Reuters calculations based on National Bureau of Statistics. (Reuters)

India: Wholesale price inflation steady in Aug. India's wholesale price inflation was stable in August, data from the Ministry of Commerce & Industry showed on Monday. The wholesale price index rose 1.08% annually in August, the same rate as seen in July. Economists had expected a 1% increase. The build-up inflation rate grew 1.25% in August compared to 3.27% in the corresponding period of the previous year. The wholesale prices for food articles rose 1.4% in August and those of non-food articles increased by 0.9%. Fuels and power prices edged up 0.1% in August, while prices for manufactured goods declined 0.3%. On a monthly basis, wholesale prices rose 0.2% in August. (RTT)

Indonesia: Exports fall more than expected. Indonesia's exports declined at a faster-than-expected rate in August, figures from Statistics Indonesia showed on Monday. Exports fell 9.99% year-on-year in August. Economists had expected a 6.0% decrease. Imports declined 15.60% annually in August compared to the forecast of 11.50% fall. On a monthly basis, exports and imports dropped 7.60% and 8.53%, respectively, in August. The trade balance showed a surplus of USD85.1m in August. Economists had expected a surplus of USD162m. (RTT)


Marine & General: Bags RM12.9m contract from Hess. Marine & General has bagged a contract from Hess Exploration and Production Malaysia B.V. worth approximately RM12.9m with an additional RM6.5m for an optional extended term. Marine & General said it has been awarded the contract by Hess for the provision of one 120MT anchor handling tug supply (AHTS) vessel to support Hess' Malaysian drilling operations. (The Edge)

PetChem: Makes entry into specialty chemicals. Petronas Chemicals Group (PetChem) has completed the acquisition of Dutch firm Da Vinci Group BV, marking PetChem's maiden entry into specialty chemicals. Da Vinci is involved in own-brand reselling, formulating and manufacturing of silicones, lube oil additives and chemicals. PetChem’s MD and CEO Datuk Sazali Hamzah said the acquisition of Da Vinci provides a compelling entry point for PetChem to grow into silicones business and enhance its competitive position in attractive end-markets such as personal care, construction, paints and coatings, electronics, automotive and healthcare, particularly in Asia-Pacific. (The Edge)

MSC: Tin output to remain firm despite global cuts. MSC Bhd does not expect its output to fall this year even though the top two have flagged production cuts, its CEO Datuk Patrick Yong said. Earlier this month, producers including the world’s top two – China’s Yunnan Tin and Indonesia’s PT Timah – said they would reduce production by around 30,000 tonnes this year - or about 8% of global supply - due to a recent slump in the metal’s price. “As a matter of fact, a few new mines will be coming on line in 2020, causing an increase of ore available to tin smelters like MSC,” Yong said. Ore production from the company’s own mines is expected to increase slightly this year, he said. (StarBiz)

UMW: Taps Buraqoil network to expand lubricant dealership. UMW Group has signed a distributorship collaboration agreement with Buraqoil Corp SB to capitalise on Buraqoil's network of more than 150 independently-owned petrol stations across Malaysia for the distribution of UMW M&E's lubricants and auto components. UMW Group said Buraqoil is the market leader in the country's mini petrol station segment, with about 60% market share. "With its extensive network, Buraqoil's independent dealers will facilitate the distribution of UMW M&E's reputable product offerings encompassing its renowned lubricants brands (Grantt, Pennzoil and Repsol) as well as its auto components products at their outlets. Aside from paving the way for future collaboration of joining any large tenders, the partnership will serve as the platform for both parties to further leverage on each other's strengths through joint or customised marketing and product training programmes. (The Edge)

Property (Neutral): Govt assures priority for Malaysians to buy unsold high-end houses. Federal Territories Minister Khalid Samad today gave the assurance that the Government will give priority to local buyers in resolving the issue of RM100bn worth of unsold high end houses. Khalid, however, said if such effort is proven unsuccessful, then the Government must think about the interests of developers and the reputation of the country’s property industry. The Minister said serious efforts would be taken to ensure local citizens would always be given priority in purchasing unsold houses in the country. He added that the ‘Malaysia My Second Home’ programme (MM2H) is among the methods to be considered if there are no local buyers for such properties. (The Edge)

Market Update

The FBM KLCI might open lower today after global stock markets declined while crude prices and haven assets gained on Monday after an attack on Saudi Arabia’s oil infrastructure knocked out half the country’s production over the weekend and raised geopolitical risks. The price of Brent crude, the international oil benchmark, registered a historic increase. Brent settled 14.6 percent higher to $69.02 a barrel, which ranks as its largest rise based on Bloomberg data back to 1988, and at one point on Monday had risen as much as 19.5 percent, which was its largest intraday rise since January 1991 when the US launched an attack on Iraqi forces in Kuwait. West Texas Intermediate, the US marker gained 14.7 percent to $62.90. Yemeni rebels claimed responsibility for the drone attacks on Saudi Arabia’s largest oil processing centre. The US has said the attack was orchestrated by Iran. The outage from the incident represents about 5 percent of global supply and Saudi Arabia’s oil capacity is expected to be well below its maximum level for weeks. Risk assets took a hit with the S&P 500 finishing 0.3 percent lower during in a broad-based sell-off that left energy and utilities as the only major sectors in the black. The Nasdaq Composite was down 0.3 percent. In Europe, the Stoxx 600 fell 0.6 percent while Germany’s Xetra Dax declined 0.7 percent and the FTSE 100 shed 0.6 percent. In Asia, stock markets diverged with Hong Kong’s Hang Seng index down 0.8 percent after protests on Sunday ended with violence and Australia’s S&P/ASX 200 was up 0.1 percent, while the Kospi in South Korea rose 0.6 percent. Japan was shut for a public holiday.

Source: PublicInvest Research - 17 Sept 2019

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Labels: M&G, PCHEM, MSC, UMW

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Chart Stock Name Last Change Volume 
M&G 0.07 0.00 (0.00%)
PCHEM 7.40 0.00 (0.00%) 296,900 
MSC 0.83 -0.02 (2.35%) 30,000 
UMW 4.44 0.00 (0.00%) 500 

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