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

 

PublicInvest Research Headlines - 15 Nov 2019

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Economy

Global: Debt surges above USD250trn as US, China lead way. Global debt hit a fresh record above USD250trn in the 1H of 2019, with China and the US accounting for more than 60% of new borrowing, the Institute of International Finance said. Borrowing by governments, households and non-financial business now accounts for more than 240% of the world’s GDP, and it’s growing faster than the global economy, the Washington-based IIF said. In developed countries, it’s governments that account for the bulk of borrowing over the past decade, the IIF said. (Bloomberg)

US: Strong healthcare costs help to lift producer inflation. US producer prices increased by the most in six months in Oct, lifted by gains in the costs of goods and services, further bolstering the Federal Reserve’s stance that it will probably not cut interest rates again in the near term. The report from the Labor Department on Thursday showed healthcare costs accelerated last month, with the cost of outpatient care at hospitals posting its largest rise since 2009. The producer price index for final demand rose 0.4% last month, the biggest increase since April, after falling 0.3% in Sept. In the 12 months through Oct, the PPI climbed 1.1%, the smallest increase since Oct 2016, after advancing 1.4% in the 12 months through Sept. (Reuters)

US: Weekly jobless claims climb to highest level since June. A report released by the Labor Department on Thursday showed first-time claims for US unemployment benefits increased by much more than expected in the week ended Nov 9. The report said initial jobless claims climbed to 225,000, an increase of 14,000 from the previous week's unrevised level of 211,000. Economists had expected jobless claims to inch up to 215,000. With the much bigger than expected increase, initial  jobless claims reached their highest level since hitting 229,000 in the week ended June 22. (RTT)

US: Fed's Kaplan says strong consumer will help the economy avoid recession in 2020. Dallas Federal Reserve Bank President Robert Kaplan said he does not expect the US economy to enter a recession next year, and he was optimistic that the strong consumer can help the US economy overcome potential headwinds. A tight labor market and robust consumer spending is countering the downside risks of a slowdown in business investment, weak manufacturing and a global slowdown, Kaplan said. (RTT)

US, China: China move to end US poultry ban will boost US exports by USD1bn annually. US Trade Representative Robert Lighthizer and Agriculture Secretary Sonny Perdue said on Thursday that they welcomed China’s decision to lift a nearly five-year ban on poultry imports from the United States, adding this would boost US exports by USD1bn annually. “China is an important export market for America’s poultry farmers, and we estimate they will now be able to export more than USD1bn worth of poultry and poultry products each year to China,” Lighthizer said. (Reuters)

EU: Eurozone 3Q growth unrevised. Eurozone economy grew in the 3Q as initially estimated, latest data from Eurostat showed on Thursday. GDP grew 0.2% from the 2Q, when the economy expanded at the same rate. The figure matched the flash estimate announced on Oct 31. The YoY growth for the 3Q was revised higher to 1.2% from its flash estimate of 1.1%. In the 2Q, growth was 1.2%. The EU28 economy grew 0.3% sequentially after a 0.2% expansion in the previous quarter. The annual growth slowed to 1.3% from 1.4%. In the 3Q, Eurozone employment edged up 0.1% quarterly, after a 0.2% increase in the previous three months. On a YoY basis, employment growth eased to 1% from 1.2%. (RTT)

Japan: Tertiary industry activity rises in Sept. Japan's tertiary industry activity rose in Sept, data from the Ministry of Economy, Trade and Industry showed on Thursday. The tertiary industry activity index rose 1.8% MoM in Sept. Economists had forecast 1.1% rise. Among the major industries, retail trade, wholesale trade, financial and insurance, living and amusement-related services, business related services, information and communication industry, electricity, gas, heat supply, water supply, medical, health care and welfare, and goods rental business increased. Meanwhile, real estate business, and transport and postal activities declined in Sept. (RTT)

India: Wholesale price inflation rises unexpectedly. India's wholesale price inflation rose unexpectedly in Oct, data from the Ministry of Commerce & Industry showed on Thursday. The wholesale price index rose 0.16% YoY in Oct, after a 0.3% increase in Sept. Economists had expected a 0.24% fall. The build up inflation was 1.9% in Oct compared to 4.9% in the corresponding period of the previous year. Food inflation was 9.8% in Oct and prices of non-food articles rose 2.3% annually. (RTT)

Philippines: Central bank holds rate steady. The Philippine central bank on Thursday left its key interest rate unchanged after slashing it in both Aug and Sept. The Monetary Board of the Bangko Sentral ng Pilippinas, or BSP, on Thursday decided leave the overnight reverse repurchase facility rate unchanged at 4%. The move was in line with economists' expectations. The previous change in the rate was a quarter-basis point cut in Sept that came after a similar reduction in Aug. (RTT)

Markets

Econpile: Bags RM26m sub-structure job in KL. Econpile Holdings has been awarded a RM26.1m contract to undertake substructure and basement works for a property development project in Jalan Awan Besar here. It was awarded the contract by WCT OUG Development SB, Econpile said. (The Edge)

GDB: Bags RM20.6m job from Hua Yang. GDB Holdings has secured a RM20.67m contract from Hua Yang to carry out piling and substructure work for the latter’s serviced apartment project in Puchong. The contract entails bored piling and pile caps for two blocks of serviced apartments. (StarBiz)

T7 Global: Wins Vestigo job. T7 Global has received an umbrella contract from Vestigo Petroleum SB for the provision of integrated well services for well intervention, workover and abandonment. The contract value will be determined on a per work order request basis, at the full discretion of Vestigo. (StarBiz)

Amalgamated Industrial Steel: Acquires land near MRT station for RM31m. Amalgamated Industrial Steel (AISB) is acquiring five parcels of land near the under-construction Damansara Damai MRT station in Sungai Buloh for RM31m. The leasehold commercial land parcels, measuring 14,365 sqm in total. The proposed acquisition will be funded via a combination of internally-generated funds and bank borrowings. (The Edge)

HeiTech Padu: Sets up JV in Indonesia to explore business opportunities. HeiTech Padu will be teaming up with Indonesian company PT Kirana Investama Nusantara (PT KIN) to set up a JV company in Indonesia to explore business opportunities there, including the development and deployment of a syariah compliance cooperative system. It said the cooperative system or Baitulmal Wat Tamwil, will earn revenue on a transactional basis. (The Edge)

Caring Pharmacy: Targets second and third-tier cities. Caring Pharmacy is targeting to expand its outlets in second and third-tier cities in Malaysia next year, including Kota Baru and Kuantan. MD Chong Yeow Siang said the group planned to open its outlets in shopping malls in such cities. By 2024, the local pharmacy chain plans to expand its outlets to 200 in Peninsular Malaysia as well as Sabah and Sarawak. The Group would also focus on its online store next year to tap into the rising trend of online shopping. (StarBiz)

Gas Malaysia: Higher tariff boosts 3Q earnings. Gas Malaysia’s (GASM) 3QFY19 net profit grew 12.24% YoY to RM46.48m, attributed to higher volume of natural gas sold and higher natural gas tariff. On prospects, GASM expects the group's profitability for 2019 to be in tandem with the level reflecting the prevailing tariff setting mechanism framework. (The Edge)

Formosa: 3Q earnings slip 5% amid higher operating costs. Formosa Prosonic Industries’ (FPI) net profit for 3QFY19 slipped 5% YoY to RM15.9m, mainly dragged by higher operating costs, despite recording higher revenue. The results had also included impairment loss on trade receivables of RM3m. Going forward, FPI said its board is cautious about the operating challenges arising from fluctuations in the USD against the MYR, rising material prices and labour costs as a result of the implementation of the minimum wage policy. (The Edge)

Market Update

US markets took a breather from recent gains as persistent concerns over US-China trade talks continued to weigh on sentiment. China’s reported reluctance in accommodating certain requests and moves by the US to support protests in Hong Kong are threatening to derail talks. On data, weekly jobless claims reached 225,000 last week, its highest since June, while October producer prices also recorded its largest gain in 6 months. The Dow Jones Industrial Average and Nasdaq Composite slipped marginally by 0.01% and 0.04% respectively though the S&P 500 inched 0.1% higher. European markets ended lower on similar concerns. Economic numbers provided some relief however, with Germany’s 3Q GDP growth of 0.1% seeing it avoid a technical recession following 2Q’s -0.2% contraction. The broader Eurozone economy expanded at 0.2% meanwhile, in line with expectations. UK’s FTSE 100 led major markets lower with a 0.8% decline however. Germany’s DAX and France’s CAC40 were 0.4% and 0.1% lower. Asian markets were mixed as China’s factory output, retail sales and fixed-asset investment all missed estimates. This had little effect on the Shanghai Composite Index which inched 0.2% higher on the day. Japan’s Nikkei 225 slipped 0.8% as the country’s economic growth fell to a 1-year low. The Hang Seng Index was 0.9% lower as unrest continues to weigh.

GDB Holdings has secured an RM20.7m contract to undertake piling and substructure works for two blocks of serviced apartments in Puchong. T7 Global has clinched an umbrella contract from Vestigo Petroleum for the provision of integrated well services for well intervention, workover and abandonment. Econpile Holdings has been awarded an 11-month contract worth RM26.1m from WCT OUG Development to undertake sub structure and basement works for a property development project.

Source: PublicInvest Research - 15 Nov 2019

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