PublicInvest Research

PublicInvest Research Headlines - 23 Aug 2021

PublicInvest
Publish date: Mon, 23 Aug 2021, 10:21 AM
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.

All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp

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Economy

EU: Germany producer prices rise at fastest pace since 1975. Germany's producer prices rose at the fastest pace since January 1975, data published by Destatis revealed. Producer prices grew 10.4% yearly in July, following a 8.5% rise in June. Economists had forecast an increase of 9.2%. This was the fastest rise since January 1975, when prices grew sharply amid first oil crisis. Excluding energy, producer prices gained 7.4% annually in July, following a 6.0% increase in the prior month. On a monthly basis, overall producer price inflation rose to 1.9% from 1.3% in June. Economists had forecast a rise of 0.8%. Among components, energy registered the biggest price growth of 20.4% and prices for intermediate goods gained 15.6%. (RTT)

EU: German exporters face rising pressure from China in home market. German exporters are facing increasing pressure in their home market from Chinese exports to the EU, according to a study by the Cologne Institute for Economic Research. Chinese exports to the region contain more and more sophisticated industrial goods such as machinery, pharmaceutical and automotive products which have long been considered the domain of German manufacturers. According to the study, the share of such products within all EU imports from China rose from 50.7% in 2000 to 68.2% in 2019. The figures serve as a warning for German politicians and companies, who are already facing mounting questions about the country’s future economic success. (Bloomberg)

UK: July retail sales drop amid soccer frenzy and COVID 'pingdemic'. British retail sales unexpectedly fell in July, suggesting at least some consumers skipped shopping to follow England's run in the Euro 2020 soccer tournament, or stayed at home due to rising COVID-19 cases. Retailers reported that the tournament and bad weather kept shoppers away from stores, the Office for National Statistics said. Sales volumes fell by 2.5% from June, the biggest drop since Jan when Britain returned to lockdown. Economists polled had expected a 0.4% MoM rise. An ONS official said there had been no feedback from retailers that worries about rising coronavirus cases were behind the drop in sales. (Reuters)

UK: Consumer mood slips in Aug from pandemic peak - GfK. British consumer morale cooled a little in Aug after touching its highest level since the start of the COVID-19 pandemic, according to a survey that also showed households were turning their minds towards saving rather than spending. The monthly consumer confidence index published by research firm GfK fell to -8 in Aug from -7 in July, the highest since Feb 2020. Economists had mostly forecast another reading of -7. Still, the gist of the survey remained upbeat. Expectations for our personal financial situation for the coming 12 months are holding up and this positivity bodes well for the economy going forwards this year and next. (Reuters)

China: Keeps benchmark lending rates unchanged. China maintained its benchmark loan prime rates, as widely expected. The one-year loan prime rate was maintained at 3.85% and the five-year loan prime rate at 4.65%. The one-year and five-year loan prime rates were last lowered in April 2020. The one-year loan prime rate was cut by 20bp and five-year rate by 10bp in April 2020. Markets expected LPR rates to remain on hold as the People's Bank of China had kept the rate on its medium-term lending facility unchanged early this month. The loan prime rate is fixed monthly based on the submission of 18 banks, though Beijing has influence over the rate-setting. This lending rate replaced the central bank's traditional benchmark lending rate in Aug 2019. (RTT)

China: July soybean imports from Brazil drop on poor crush margins. China’s soybean imports from top supplier Brazil fell in July from the previous year, customs data showed, as poor crush margins weighed on demand. China, the world’s top buyer of soybeans, brought in 7.88mt of the oilseed from Brazil in July, down 3.7% from 8.18mt a year earlier, according to data from the General Administration of Customs. Chinese crushers stepped up purchases of soybeans from the South American country in the earlier months of the year, to profit from good margins, driven by a fast-recovering pig herd. For July, China’s soybean shipments from all origins totalled 8.67mt, down 14.1% from the previous year. (Reuters)

Japan: Overall inflation sinks 0.3% on year in July. Overall consumer prices in Japan were down 0.3% on year in July, the Ministry of Internal Affairs and Communications said. That missed expectations for a flat reading following the downwardly revised 0.5% contraction in June (originally up 0.2%). On a seasonally adjusted monthly basis, overall inflation was up 0.2%, matching forecasts and slowing from 0.3% in the previous month. Core CPI, which excludes volatile food costs, was down 0.2% on year, exceeding expectations for a decline of 0.4% following the downwardly revised 0.5% drop a month earlier (originally up 0.2%). Core CPI was up 0.4% on month. (RTT)

Australia: Manufacturing PMI slows in Aug - Markit. The manufacturing sector in Australia continued to expand in Aug, albeit at a much slower rate, the latest survey from Markit Economics showed with a 14-month low manufacturing PMI score of 51.7. That's down from 56.9 in July, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. New orders and output both fell into contraction territory, ending the 13-month growth streaks across both indices. While the lingering disruptions from the COVID19 pandemic affected both demand and production, firms also reported that supply issues had constrained output. Indeed, suppliers' delivery times continued to lengthen, and at the most severe pace since April 2020. (RTT)

South Korea: Early exports jump as demand resilient amid Delta spread. South Korea’s early trade data show exports are set to rise in Aug, suggesting global demand remains resilient in the face of a surge in cases of the delta variant. Exports rose 40.9% in the first 20 days of the month from a year earlier, the customs office said. The gains were partly lifted by a 7.5% fall in the same period last year. The report shows renewed restrictions to curb outbreaks are yet to derail a recovery in global trade. Still, compared with prevailing optimism earlier this year, concerns are growing over the outlook as the more contagious delta strain rages across countries. Signs of trade disruptions from the delta variant have already emerged, as a port in China was partially shut after a worker became infected. (Bloomberg)

Markets

Advancecon: Signs a 21-year power purchase deal with TNB. Advancecon Holdings's wholly-owned subsidiary, LSS TPG SB, has signed a 21-year power purchase agreement (PPA) with TNB for its upcoming solar photovoltaic energy-generating facility. LSS TPG would design, construct, own, operate and maintain the solar photovoltaic energy-generating facility with a capacity of 26MWac to be located in Kuala Langat, Selangor. (BTimes)

Country Heights: Plans private placement of new shares for first time on record. Country Heights Holdings (CHHB) proposes to undertake a private placement of up to 54.71m new shares which represent about 20% of the company's existing number of issued shares to raise an indicative RM58.81m. The fund-raising exercise via private placement of new shares is CHHB's first such corporate exercise on record, based on the company's bourse filings since 2000. (The Edge)

Tiong Nam Logistics: Secures long term lease for its upcoming warehouse in Senai Airport City. Tiong Nam Logistics Holdings has secured a long term lease for its upcoming warehouse in Senai Airport City, Johor Bahru, where it will be setting up a new mega distribution hub for an unnamed multinational corporation (MNC) client. The new 1.1m sqft warehouse in Senai Airport City will be Tiong Nam's largest facility to date and will serve as a dedicated sales and distribution centre for the MNC's Asia Pacific markets upon its targeted completion in 2023. (BTimes)

Hubline, MISC: Unit ink MoU to explore opportunities port management and marine services. Hubline and MISC whollyowned unit, Maritime Services SB (MMS) are exploring a potential collaboration in the port and terminal management and operations space, as well as related marine services segment in Sarawak. Hubline said it has today inked a MoU with MMS on the matter. (The Edge)

Pharmaniaga: Seeking MOH approval to jab adolescents with Sinovac. Pharmaniaga, which packages and distributes Covid-19 vaccine Sinovac, is seeking approval for the vaccine to be administered to the Malaysian adolescent population. Upon approval, it will create demand for six million doses. Furthermore, the drug maker intends to export the Covid-19 vaccines to countries in Asean and Africa. (The Edge)

Widetech: Plans one-to-five share split after over 490% jump on share price. Widetech (M) has proposed a share split of one ordinary share to five shares. The entitlement date will be announced later. Widetech currently has an issued share capital of RM44.89m comprising 44.75m shares. (The Edge)

Apollo Food: On resumption of one plant, suspends another to curb Covid-19 outbreak. Apollo Food Holdings announced a temporary stoppage at one of its Johor manufacturing facilities to curb the spread of Covid-19, just three days after another plant located nearby was allowed to resume operations after a oneweek shutdown. Apollo Food does not expect the latest temporary stoppage to result in any material impact on its operations or financial results. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today as global equity benchmarks recouped some losses on Friday. In the US, the S&P 500 traded up 0.8% while the tech-focused Nasdaq Composite rose 1.2% on the day. In Europe, stocks rallied late in the day. The European benchmark Stoxx 600 gained 0.3%. The FTSE 100 closed up 0.4%. The CAC 40 in Paris rose 0.3% while Frankfurt’s Dax 30 advanced 0.3%.

Meanwhile, the FBM KLCI bucked regional trend and ended marginally higher last Friday, despite Malaysia posting another day of record high Covid-19 cases, as domestic political uncertainties were tempered by the anticipated appointment of a new prime minister. The benchmark index, which opened higher at 1,518.23, closed at 1,518.03, up 3.08 points or 0.20% from Thursday's 1,514.95 close. Japan’s Nikkei stock average closed at a near eight-month low on Friday, dragged down by automakers and their related sectors on growing concerns about a recovery after Toyota cut its global production. Stocks in Shanghai also fell, while investors sold risky corporate debt and the Chinese currency. The Yuan was poised for its biggest weekly loss in two months, as investors rushed to safety amid ongoing coronavirus concerns. Japan's Nikkei 225 dropped 0.98% to 27,013.25, while the Shanghai Composite Index fell 1.10% to 3,427.33.

Source: PublicInvest Research - 23 Aug 2021

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