PublicInvest Research Headlines - 13 Apr 2021

Date: 13/04/2021

Source  :  PUBLIC BANK
Stock  :  JOHOTIN       Price Target  :  2.08      |      Price Call  :  BUY
        Last Price  :  1.63      |      Upside/Downside  :  +0.45 (27.61%)
Source  :  PUBLIC BANK
Stock  :  TM       Price Target  :  6.60      |      Price Call  :  HOLD
        Last Price  :  6.10      |      Upside/Downside  :  +0.50 (8.20%)


US: Budget deficit hits record high for March as aid payments swell outlays. The US government posted a March budget deficit of USD660bn, a record high for the month, as direct payments to Americans under President Joe Biden’s stimulus package were distributed, the Treasury Department said. The deficit for the first six months of the 2021 fiscal year ballooned to a record USD1.706trn, compared to a USD743bn deficit for the comparable year-earlier period. The first six months of fiscal 2020 largely did not include emergency pandemic spending to counter the coronavirus-related lockdowns that started in March 2020. (Reuters)

EU: Retail sales rebound in February. Eurozone retail sales increased more than expected in February after declining at the start of the year, figures from the statistical office Eurostat showed. Sales grew 3.0% from January, when they fell 5.2%, revised from 5.9%. Economists had expected 1.5% increase. Non-food sales grew 6.8% and sales of automotive fuels grew 3.7%. Sales of food, drinks, and tobacco decreased 1.1%. Compared to the same month last year, retail sales fell 2.9% annually in February after a 5.2% decline in the previous month. Economists had forecast a 5.4% decrease. (RTT)

UK: Retailers report higher spending in March – BRC. British high street retailers reported higher spending in March compared with both a year earlier and before the start of the coronavirus pandemic, ahead of a reopening of non-essential stores in April. The British Retail Consortium said total sales were 8.3% higher than in March 2019 and 13.9% higher than in March 2020, when the start of the Covid-19 lockdown stymied spending on non-essentials. (Reuters)

Japan: Wholesale prices rise for first time in more than a year, stoked by commodities surge. Japanese wholesale prices marked their first annual increase in more than a year in March, a sign that rising commodities costs are pinching corporate margins and adding inflationary pressure to Japan . Analysts, however, expect the impact on consumer inflation to remain more modest in Japan than in the US, as soft wage growth and a slow vaccine rollout are seen weighing on household spending. That would add to reasons for the Bank of Japan (BOJ) to maintain its massive stimulus programme and meet a pledge to keep its money tab wide open until inflation exceeds 2% in a stable manner. (Reuters)

Japan: Bank lending rises again as pandemic pressures services sector. Japanese bank lending rose 6.3% in March from a year earlier, data showed, as restaurants and hotels sought more loans to weather the hit from the Covid-19 pandemic. Deposits held by banks were also up 9.9% in March as households continued to save rather than spend on uncertainty over the pandemic’s fallout, the Bank of Japan data showed. Outstanding loans held by the country’s four main categories of banks, including “shinkin” or credit unions, hit a fresh record at JPY579.995trn (USD5.29trn), according to the data (Reuters)

India: Industrial production falls sharply. India's industrial production declined sharply and at a faster than expected pace in February, preliminary figures from the statistical office showed. The industrial production index dropped 3.6% YoY following a 0.9% decrease in January. Economists had expected a 3.0% fall. In the same month last year, production grew 5.2%. Manufacturing output fell 3.7% YoY and mining production dropped 5.5%. (RTT)

Indonesia: Retail sales grow in March. Indonesia retail sales grew in March as demand continued to improve amid favorable weather, results of a survey by Bank Indonesia showed. Retail sales rose 2.9% MoM in March, after a 2.7% decline in February. In January, sales fell 4.3%. The latest growth was due to increasing public demand amid favorable weather. Sales of other goods, clothing sub-group and culture and recreational goods increased in March. On a yearly basis, retail sales declined 17.1% in March, following a 18.1% fall in the previous month. (RTT)


TM (Neutral, TP: RM6.60): To expand data centre space. Telekom Malaysia (TM) plans to expand its data centre space based on the demand by its clients both from the public and private sectors. TM said there was still vacant areas’ surrounding its Klang Valley Core Data Centre in Cyberjaya, but it was also eyeing on land outside the area. (Business Times)

Luster: Bags RM1bn contract to build glove facility in Ohio. Luster Industries (Luster) has partnered with American Nitrile LLC (AN) to provide EPCC services as well as glove technology solutions worth RM1bn. The services would be for up to 12 glove production lines and a further forecasted 72 glove production lines in the US. (Business Times)

Reservoir Link: Bags three-year well leak repair contract from Petronas Carigali. Reservoir Link Energy has secured a three-year contract from Petronas Carigali SB for the provision of well leak repair equipment and services from Petronas Carigali. The contract ends on March 22, 2024. It is the first well leak contract announced by the company this year. (The Edge)

Bintai Kinden: Acquires Johnson Medical International for RM50m. Bintai Kinden Corporation is acquiring Johnson Medical International SB (JMI) for RM50m to expand its healthcare business segment. The company signed a MoU with JMI's major shareholder Yeo Eng Lam to acquire approximately 3m ordinary shares, representing 100% stake in JMI. (Business Times)

Gets Global: Inks HOA for glove business acquisition. Gets Global has entered into a heads of agreement (HOA) with BT Capital SB for a potential acquisition of an equity stake in Great Stylish Venture SB (GSVSB) to expand its glove business. BT Capital has approximately 100% direct interest in GSVSB. The purchase consideration shall be determined later. (The Edge)

GDEX: Ties up with DOC2US, Alpro Pharmacy to ease medication delivery. GDEX is collaborating with electronic prescription (e-prescription) telemedicine provider DOC2US and community-based pharmacy Alpro Pharmacy for secure and real-time tracking of medication. The firms said patients who opt for doorstep delivery of their medication can track their barcoded medication from GDEX in real time. (The Edge)

PCCS: Invests RM4m, enters used car financing, insurance business. PCCS Group inked a shareholders agreement with 365 Capital SB advisor See Kok Wah to establish and operate the lucrative used four-wheeled vehicles financing and insurance business in Johor and Melaka. The JV, Southern Auto Capital SB will commence business on May 1, 2021. (Business Times)

Comfort Gloves: Plans bonus warrant issue and employee share scheme. Comfort Gloves has proposed a bonus issue of 174.13m warrants on the basis of three warrants for every 10 ordinary shares held, rewarding shareholders and raising funds primarily for capex purposes, as well as an employee share scheme (ESS). (The Edge)

GDB: Proposes bonus issue of new shares, warrants. GDB Holdings has proposed a one-for-two bonus issue involving 312.5m new shares. This will increase GDB's share base from 625.0m shares to 937.5m. Its share capital would remain at RM62.6m. (Business Times)

Market Update

The FBM KLCI might open flat today after a stock market rally that sent equities to record highs last week paused on Monday as investors refrained from placing big bets ahead of the start of earnings season in the US. The S&P 500, the blue-chip US share index, was less than 0.1% lower, while the tech-heavy Nasdaq Composite slipped 0.4%. In Europe, the Stoxx 600 equity benchmark closed down 0.5% and the UK’s FTSE 100 fell 0.4%. The S&P 500 and the Stoxx 600 hit record highs on Friday ahead of US quarterly earnings reports that are expected to show the strongest profit growth in two-and-a-half years as the economic recovery accelerates from the affects of the coronavirus.

Back home, the FBM KLCI closed 3.83 points or 0.24% lower, snapping three consecutive days of gains, due to profit taking in telecommunications stocks, namely Axiata Group and Digi.Com. At 5pm, the local benchmark index closed at 1,608.42 points. Elsewhere in Asia, Japan’s Nikkei 225 was down 0.77%, Hong Kong’s Hang Seng fell 0.86%, and China’s Shanghai Comp slid 1.09%, while South Korea's Kospi grew 0.12%.

Source: PublicInvest Research - 13 Apr 2021

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