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Author: PublicInvest   |   Latest post: Wed, 20 Nov 2019, 9:59 AM

 

PublicInvest Research Headlines - 10 Oct 2019

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Economy

US: Wholesale inventories rise less than expected in August. A report released by the Commerce Department showed a modest increase in US wholesale inventories in August. The Commerce Department said wholesale inventories edged up by 0.2% in August, matching the uptick in July. The report said inventories of durable goods rose by 0.3%, while inventories of non-durable goods crept up by 0.1%. Meanwhile, the Commerce Department said wholesale sales came in virtually unchanged in August after rising by 0.2% in July. Wholesale sales were unchanged as a 0.3% increase in sales of durable goods was offset by a 0.3% drop in sales of non-durable goods. (RTT)

EU, Asia: World Bank forecasts growth to ease across Europe, Central Asia. The World Bank forecast economic growth across Europe and Central Asia to ease this year reflecting the slowdown in both Russia and Turkey. According to the latest World Bank Economic Update for Europe and Central Asia, growth in the emerging and developing countries of Europe and Central Asia is set to ease to a four year low of 1.8% this year from 3.2% in 2018. Nonetheless, the aggregate growth mask the diverged performance across the region, the agency cautioned. The growth rate is projected to improve to 2.7% in 2020 and to 3% in 2021. (RTT)

China: Open to small trade deal if Trump eases tariff threats. China is still open to reaching a partial trade deal with the US, signaling that Beijing is focused on limiting the damage to the world’s second-largest economy. Negotiators heading to Washington for talks aren’t optimistic about securing a broad agreement that would end the trade war between the two nations. But China would accept a limited deal -- as long as no more tariffs are imposed by President Donald Trump, including two rounds of higher duties set to take effect this month and in December, the official said. In return, Beijing would offer non-core concessions like purchases of agricultural products. (Bloomberg)

Hong Kong: Sinking into a recession with no recovery in sight. Hong Kong is facing its first recession since the global financial crisis, with little prospect of an immediate recovery. The economy contracted in the 2Q, almost certainly in the 3Q and the data are still deteriorating. The effects of the US-China trade war combined with a lack of tourist spending power also raises the prospect of a contraction for the full year, compared with 2018. The downturn has been rapid, as declining exports and protests have erased any economic momentum from the start of 2019. (Bloomberg)

Markets

AirAsia (Neutral, TP: RM1.89): Philippines AirAsia delays IPO to 2020 or 2021 . The Philippine unit of AirAsia is postponing its IPO to next year or 2021 as it focuses on corporate reorganisation and seeking funds from existing shareholders, its chairman Joseph Omar Castillo said. "According to our estimated timeline, we are looking at the 3Q next year to 1Q of 2021," Castillo said, adding another major consideration would be a good performance of the stock market. (The Edge)

Destini: Wins Petronas Carigali well services contract. Destini has secured a five-year umbrella contract from Petronas Carigali SB to provide integrated well services for petroleum arrangement contractors. The letter of award was received by wholly owned Destini Oil Services SB (DOS) on Sept 20. The contract does not constitute any commitment by Petronas Carigali to guarantee any minimum quantity of works to be performed by DOS. (StarBiz)

Advancecon: Bags subcontract job worth RM49.38m in Sarawak. Advancecon Holdings has bagged an RM49.38m subcontract job for road infrastructure projects in Sarawak under the Upper Rajang Development Agency (URDA). The job is under the URDA package 2, which consists of phase 1 - section 2, mainly for road infrastructure projects in Pelagus/Baleh, proposed new road from Baleh Bridge/Rh Belaja, Ng Benin/Sk Ng. Pelagus to Pelagus Resort. (The Edge)

ABM Fujiya: Inks MoU with Chinese firm for battery manufacturing plant . ABM Fujiya is partnering China’s Jujiang Power Technology Co Ltd (Jeje) to explore and evaluate the possibility of setting up a new battery manufacturing plant in Malaysia worth RM500m. ABM’s unit, Amalgamated Batteries Manufacturing (Sarawak) SB, has inked a MoU with Jeje for the purpose. (The Edge)

CAM Resources: Calls off renewable energy plant project . CAM Resources said it is not proceeding with its planned seven megaWatt (mW) per hour renewable electrical energy power plant in Taiping, Perak. It said that after due consideration and further reassessment on the project's feasibility, it decided not to go ahead with the project and will surrender the approved feed-in tariff (FiT) quota for the project to the Sustainable Energy Development Authority (SEDA). The cancellation was mainly to do with costs and lack of expertise. (The Edge)

Asia Poly: Subsidiary gets SEDA electricity feed-in approval . Asia Poly Holdings's indirect 51%-owned Asia Poly Bio Gas SB has received the Sustainable Energy Development Authority's (SEDA) feed-in approval to supply electricity in Malaysia under a 21-year contract. Asia Poly Bio Gas' renewable energy installation in Jeli, Kelantan, has an installed electricity generation capacity of 0.5MW. The 21-year contract's effective period starts from the scheduled feed-in tariff commencement date on Sept 30, 2022. (The Edge)

Handal: To jointly develop hydrogen paired electric race car. Handal Energy’s (Handal) wholly-owned subsidiary, Handal Energy Solutions SB, is making its maiden foray into the renewable energy segment by signing a Memorandum of Agreement (MOA) to jointly develop a hydrogen-paired electric race car (HyPER) in Malaysia. Handal said the MoA was signed together with NanoMalaysia, Pulsar UAV SB (Pulsar), MNA Energy SB (MNA Energy) and Wheelspin Motorsports. (The Edge)

Market Update

The FBM KLCI might open stronger today after Wall Street climbed for the first time in three days on Wednesday but found its fortunes waxing and waning in response to the latest trade headlines. The S&P 500 finished 0.9% higher in a broad-based rally, coming back from intraday highs that had it up as much as 1.3%. Meanwhile, the tech heavy Nasdaq Composite was up 1%. Global stocks were in an upbeat mood at the start of the day after Chinese officials offered to increase annual purchases of US agricultural products as they sought an interim trade agreement with Washington. The move preceded a meeting between Liu He, China’s vice premier and Beijing’s lead negotiator, with US trade representative Robert Lighthizer and Treasury secretary Steven Mnuchin that starts on Thursday in Washington. If discussions go well, Mr Liu is expected to meet US president Donald Trump on Friday. The picture was also brighter in Europe at the close of trade, with the Stoxx 600 gaining 0.4% and the FTSE 100 up 0.3%. Frankfurt’s Dax advanced 1%.

Back home, the FBM KLCI index lost 7.56 points or 0.48% on Wednesday. Trading volume decreased to 1.90bn worth RM1.68bn. Market breadth was negative with 293 gainers as compared to 509 losers. The regional markets finished mixed with the Shanghai Composite gained 0.39%, while the Hang Seng led the Nikkei 225 lower. They fell 0.81% and 0.61% respectively.

Source: PublicInvest Research - 10 Oct 2019

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