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PublicInvest Research

Author: PublicInvest   |   Latest post: Thu, 12 Dec 2019, 9:19 AM

 

PublicInvest Research Headlines - 12 Nov 2019

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Economy

Global: Moody’s offers bleak outlook for government debt amid political instability. Ratings agency Moody’s has issued a negative outlook for sovereign creditworthiness in 2020, citing a “disruptive and unpredictable” political environment. Moody’s said political and geopolitical turbulence is exacerbating a gradual slowdown in trend GDP growth, aggravating structural bottlenecks and increasing the risk of economic or financial shocks. This is likely to further threaten the security of government debt around the world. (CNBC)

US: Fed's Rosengren sees economy 'in pretty good shape'. Boston Federal Reserve Bank President Eric Rosengren on Monday said the US economy is in good condition and nothing he has seen in recent data would change his view that the Fed’s latest interest rate cut was not needed. “I view the US economy as in pretty good shape right now,” Rosengren said. GDP “looks like it is going to be growing around potential.” “The US economy is in good enough shape that I dissented at the last meeting,” he said. (Reuters)

EU: Top ECB official will lead a global central bank effort focusing on digital currencies. Outgoing ECB executive board member Benoit Coeure will lead a new unit at the Bank of International Settlements (BIS) focused on financial technology like digital currencies, the group announced Monday. Coeure was tapped to run the BIS’ new “Innovation Hub,” which was set up earlier this year to understand how technology is affecting central banks around the world. (CNBC)

EU: Italy industrial production decreases in Sept. Italy's industrial production fell in Sept after rising in the previous month, data from the statistical office ISTAT showed on Monday. Industrial production fell a seasonally adjusted 0.4% MoM in Sept, reversing a 0.4% rise in August. Economists had expected a 0.4% fall. On a calendar adjusted basis, industrial production decreased 2.1% in Sept, following a 1.7% decline in August. (RTT)

UK: Economy avoids recession with third-quarter growth rebound. The British economy has avoided slipping into a technical recession, after official data Monday showed the 3Q GDP at 0.3%. The data marks a rebound from the 2Q GDP which contracted by 0.2%. On a YoY basis, 3Q growth slowed to 1%. This marked the slowest rate of expansion since the first three months of 2010. On a MoM measure, Sept GDP alone marked a 0.1% contraction. (CNBC)

China: Bank lending declines sharply in Oct. China's bank lending declined notably in Oct, figures from the PBOC showed Monday. Banks lent CNY661.3bn loans in Oct compared to CNY1.69trn in Sept. Lending was forecast to fall to CNY800bn. The broad money supply M2 climbed at a steady pace of 8.4% in Oct. Monetary easing is failing to lift bank loan growth, while fiscal constraints are weighing on broader credit expansion, Julian Evans-Pritchard and Martin Lynge Rasmussen, economists at Capital Economics, said. (RTT)

Japan: Eco watchers current conditions weaken sharply, outlook improves. A measure of the public assessment of the Japanese economy fell significantly in Oct after rising in the previous month, survey data from the Cabinet Office showed on Monday. The current conditions index of the Economy Watchers Survey, which measures current situation, fell to 36.7 in Oct from 46.7 in Sept. (RTT)

Markets

AirAsia (Neutral, TP: RM1.89), AAX (Underperform, TP: RM0.14): Ink profit sharing agreement on KL-S’pore route. AirAsia Group (AAGB) will be transferring two of its existing slots on the Kuala Lumpur to Singapore (KUL-SIN) route, involving 14 flights, to AirAsia X (AAX). It said AAX will share 50% of the net operating profit of the route with AAGB on a monthly basis under an agreement between them. (The Edge)

Pestech: Bags TNB smart meter contract worth RM38.4m. Pestech has won a contract from TNB for the supply and delivery of smart meters. The two-year contract, worth RM38.4m, is for the phase two of the smart billing project in Selangor, Kuala Lumpur, Putrajaya and Cyberjaya. "Aligned with TNB’s plan to equip a total of 9.1m households across Peninsular Malaysia with smart electric meter by year 2026. (StarBiz)

Cycle & Carriage: To be taken private at RM2.20/share via selective capital reduction, repayment. Cycle & Carriage Bintang (CCB) controlling shareholder Jardine Cycle & Carriage Ltd (Jardine CCL) proposed to the board to undertake a selective capital reduction and repayment (SCR) at RM2.20 per share. Jardine CCL does not intend to maintain the listing status of CCB. (The Edge)

Ivory Properties: Plans for land buy in Penang for RM65m. Ivory Properties Group is planning to buy a piece of freehold land in Penang for RM65m. The 8,093 sq metre land will be used for a mixed development project, the property developer said. It said it is purchasing the land from Zenith Urban Development SB. (The Edge)

Westports: Closes 2 berths to assess damages post collision of vessel with cranes. Westports Holdings has closed two berths to assess damages as a safety measure, following the collision of a berthing container vessel with two ship-to-shore cranes, happened on Nov 8. “The temporary berths closure is not expected to have a material impact on the overall container operations, as terminal handling of containers at all other berths continue as usual,” the group added. (The Edge)

Xian Leng: To diversify into bird’s nest business. Xian Leng Holdings has proposed to diversify its existing business to include the trading and distribution of edible bird’s nest. Xian Leng entered into a management service agreement with edible bird’s nest industry expert Tan Wei Chun for the provision of management services to facilitate the day-to-day business operations of Xian Leng. (SunBiz)

KLCCP Stapled Group: Reports flat 3Q net profit, proposes 8.8 sen dividend. KLCCPSG recorded a net profit of RM181.41m for 3QFY19, little changed from 3QFY18 earnings of RM181.43m. This is despite revenue climbing 1.2% YoY to RM353.52 million. The group proposed a distribution per stapled security of 8.8sen for the quarter. (The Edge)

Construction (Neutral): Sector down 0.6% in 3Q19. The value of construction work done in the 3Q19 contracted 0.6% YoY at RM36.1bn (2Q19: RM35.9bn), said the Chief Statistician Malaysia, Datuk Seri Dr Mohd Uzir Mahidin. He said civil the engineering subsector registered the highest growth in the 3Q19 at 7.5%, followed by the special trade activities sub-sector at 2.8%. "However, the residential buildings and non-residential buildings sub-sectors declined by 2.7% and 11.6% respectively,” he said. He added that the civil engineering sub-sector remained the key contributor to the value of construction work done, with a 46.1% share. (Bernama)

Market Update

The FBM KLCI might open higher today as the blue-chip Dow ended positive on Monday to maintain its record-breaking ascent after Boeing said its grounded 737 Max fleet could see a return to service early next year, helping to offset trade war concerns that had left other US stock-market benchmarks with losses. The Dow Jones Industrial Average finished up around 10 points, or less than 0.1%, to 27,691.49, the S&P 500 index declined 6 points, or 0.2%, to 3,087.01, while the Nasdaq Composite Index fell 11 points, or 0.1%, to 8,464.27. There was no economic data released on Monday, though investors were parsing a speech from Boston Fed President Eric Rosengren, who argued Monday that regulators around the world should be increasing capital buffers for large banks. In Europe, the Stoxx Europe 600 was up less than 0.2%.

Back home, the FBM KLCI closed 1.58 points or 0.1% lower to 1,608.15 points on profit taking and as investors weighed fresh violence in the Hong Kong protest and watched the progress of US-China trade talks. A total of 2.37bn shares worth RM1.64bn traded across the exchange.

In the region, the China CSI 300 fell 1.8%, and the Shanghai Composite declined 1.8%. Hong Kong’s Hang Seng Index fell 2.6%, while Japan’s Nikkei 225 Index slipped 0.3%.

Source: PublicInvest Research - 12 Nov 2019

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