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

 

PublicInvest Research Headlines - 3 Dec 2019

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Economy

  • US: Factory sector contracts again in November. The US economy’s manufacturing sector contracted for a fourth straight month in Nov as new order volumes slid back to around their lowest level since 2012, according to an industry report released. The Institute for Supply Management (ISM) said its index of national factory activity fell to 48.1 from 48.3 the month before. The employment index slid to 46.6 from 47.7 a month earlier, also marking a fourth consecutive month of declining employment in the sector. New orders dropped to 47.2 from 49.1, matching a reading from July that was the lowest since June 2012. (Reuters)
  • US: Construction spending unexpectedly drops 0.8% in Oct. A report released by the Commerce Department showed an unexpected decrease in US construction spending in Oct. The Commerce Department said construction spending fell by 0.8% to an annual rate of USD1.291trn in Oct after slipping by 0.3% to a revised USD1.302trn in Sept. The unexpected drop in construction spending was partly due to a decrease in spending on private construction, which tumbled by 1.0% to a rate of USD956.3bn in Oct. Spending on residential construction slumped by 0.9% to a rate of USD508.2bn. (RTT)
  • EU: Manufacturing sector continues to contract. The EU manufacturing sector continued to contract in Nov but the pace of declined slowed from Oct, final data from IHS Markit showed. The factory PMI improved to 46.9 in Nov from 45.9 in Oct and above the flash 46.6. The survey data are indicating a quarterly rate of contraction in excess of 1% for manufacturing, IHS Markit said. Among big-four economies, France posted manufacturing expansion on a MoM basis in Nov. The PMI climbed to 51.7 from 50.7 in Oct. (RTT)
  • UK: Manufacturing contracts on political, economic uncertainties. The UK manufacturing downturn continued in Nov amid the uncertainty caused by the forthcoming general elections and the delay in Brexit, a survey showed. The headline factory PMI fell to 48.9 from 49.6 in Oct, according to final data from IHS Markit and Chartered Institute of Procurement & Supply. But the score was above the flash estimate of 48.3. The PMI has remained below the neutral mark of 50.0 for seven successive months. (RTT)
     
  • China: Manufacturing sector logs moderate expansion. China's manufacturing activity expanded at a moderate pace in Nov, but this was the strongest growth since Dec 2016, survey data from the IHS Markit showed. The Caixin manufacturing PMI rose slightly to 51.8 from 51.7 in Oct. The reading signaled an improvement for the fourth consecutive month and the strongest since Dec 2016. According to official survey, the manufacturing sector returned to growth in Nov. The PMI advanced to 50.2 from 49.3. (RTT)
     
  • Japan: Capital spending climbs 7.1% in 3Q. Overall capital spending in Japan was up 7.1% QoQ in 3Q19, the Ministry of Finance said - exceeding expectations for an increase of 5.0% and up from 1.9% in the previous three months. Excluding software, capex accelerated 7.7% QoQ - again beating forecasts for 4.4% following the 1.7% drop in the three months prior. Company profits tumbled 5.3% QoQ, shy of expectations for a drop of 2.0% following a decline of 12.0% in Q2. Company sales slid 2.6% after rising 0.4% in the 2Q. (RTT)
  • HK: Retail sales fall further in Oct. Hong Kong's retail sales fell for the ninth straight month in Oct, figures from the Census and Statistics Department showed. The retail sales volume dropped 26.2% YoY in Oct, following a 20.3% fall in Sept. The value of retail sales declined 24.3% annually in October, following an 18.2% in the preceding month. Sales of jewelery, watches and clocks, and valuable gifts dropped 42.9% in October and that of clothing, footwear and allied products declined 36.9%. (RTT)
  • India: Manufacturing sector growth improves in Nov. India's manufacturing sector grew further in Nov but the upturn remained subdued compared to early 2009, survey results from IHS Markit showed. The headline IHS Markit manufacturing PMI increased to 51.2 in Nov from 50.6 in Oct. Total sales rose for the twenty-fifth month in a row in Nov, however, the upturn was among the weakest over this sequence. The increase in exports was the slowest over the past year and-a-half. (RTT)

Markets

  • WCT (Neutral, TP: RM0.91): Crest Builder buys 2.6ha land in Klang from WCT for RM55m. Crest Builder Holdings is buying a 2.646-hectare freehold land in Klang from WCT Holdings for RM55m. Crest Builder said its wholly-owned subsidiary CB Land SB has entered into a sale and purchase agreement with Gemilang Waras SB, a wholly-owned unit of WCT Land SB. The preliminary plans for the land are a mixed-development of three blocks of residential serviced apartments and retail shop lots. (The Edge)
  • Khee San: Proposes private placement of 45.1% of the total enlarged shares to Mamee. Khee San proposes a private placement of 94m new ordinary shares in Khee San (KSB), representing approximately 45.11% of the total enlarged issued KSB shares to Mamee-Double Decker (M) SB at a subscription price of RM0.25 per share. Upon completion of Proposed Subscription, Mamee will emerge as the controlling shareholder of KSB with a shareholding of 45.11% of the total enlarged number of issued shares in KSB. Hence, Mamee is thereby obliged to extend a mandatory take-over offer for the remaining KSB Shares not already held by them in accordance with the Rule. The Proposed Rights Issue involves the issuance of 208.4m Rights Shares on the basis of 1 Rights Share for every 1 existing KSB Share held on the Entitlement Date after the completion of the Proposed Subscription. (Bursa Malaysia)
  • Duopharma: Gets extension for supply of insulin products. Duopharma Biotech had its contract to supply human insulin product to the government extended by one year to Dec 1,2020 with an additional contract value of RM91.06m. The government had written to Biocon SB and the company about the amendments to the January 2017 agreement which included an extension to supply the insulin. (Starbiz)
  • Perisai Petroleum: Gets RM31.8m rig drilling contract extension. Perisai Petroleum Teknologi has bagged a contract extension worth RM31.7m from Petronas Carigali SB for the provision of a jack up drilling rig for the latter’s Samarang drilling campaign. The contract was awarded to the group’s unit Perisai Offshore SB, Perisai Petroleum said, adding it is expected to last for two wells. (The Edge)
  • Revenue: Eyes more local bank partnerships in FY20. Revenue Group does not plan to rest on its laurels as it eyes more partnerships with financial institutions. This is in line with its focus to deploy more electronic data capture (EDC) terminals, which will help boost transaction processing volume. According to Revenue's MD cum group CEO Eddie Ng Chee Siong, the group is now eyeing more partnerships with financial institutions including local banks. (The Edge)
  • Cuscapi: Collaborates with iPay88 to provide end-consumer solutions in F&B. Cuscapi has entered into a MoU with iPay88 (M) SB for a collaboration to offer competitive solutions to end-consumers in the food and beverage (F&B) industry. The company said the MoU will enable Cuscapi to leverage on iPay88’s dominant position in the online and mobile payment space, whilst exploring business opportunities and potential cross-selling of Cuscapi’s C360engage — an intelligent cloud point-of-sales (POS) system. (The Edge)

MARKET UPDATE

  • The FBM KLCI might open lower today as major stock indexes saw their biggest one-day fall in nearly eight weeks on Monday, after U.S. manufacturing data showed a continued contraction in November and fresh trade jitters put investors on the defensive. The Dow Jones Industrial Average fell 268.37 points, or 0.9%, to end at 27,783.04, while the S&P 500 index lost 27.11 points, or 0.8%, to finish at 3,113.87. The Nasdaq Composite Index fell 97.48 points or 1.1%, closing at 8,567.99. Stocks were pulled lower by a disappointing U.S. manufacturing survey that pointed to a fourth straight month of contraction for the sector, with the Institute for Supply Management’s purchasing manager’s index unexpectedly falling to 48.1% in November from 48.3% in October. The data overshadowed a separate survey on U.S. manufacturing released by Markit on Monday, which showed the sector gaining steam, with a 52.6 reading, versus October’s 52.2. European stocks traded mostly lower, reflected by the 1.5% decline for the Stoxx Europe 600.
     
  • Back home, the FBM KLCI closed up 8.81 points or 0.56% to 1,570.55 points on technical rebound and as prices of crude oil and global shares rose on news the Caixin/Markit Manufacturing Purchasing Managers' Index (PMI). The exchange saw 2.04bn shares, worth RM1.41bn traded. In the region, stocks closed mostly higher, with the China CSI 300 rising 0.2%, Japan’s Nikkei 225 adding 1% and Hong Kong’s Hang Seng Index gaining 0.4%.

Source: PublicInvest Research - 3 Dec 2019

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