PublicInvest Research

PublicInvest Research Headlines - 30 Sept 2021

PublicInvest
Publish date: Thu, 30 Sep 2021, 11:31 AM
PublicInvest
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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

US: Pending home sales jump to seven-month high, mortgage applications fall. Contracts to buy US previously owned homes rebounded to a seven-month high in Aug, but higher prices as supply remains tight are slowing the housing market momentum. The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, jumped 8.1% last month to 119.5. That was the highest reading since January and followed two straight monthly declines. Economists had forecast contracts, which become sales after a month or two, increasing 1.4%. Compared with a year ago, pending home sales fell 8.3% in Aug. The housing market boomed early in the COVID-19 pandemic amid an exodus from cities as people worked from home and took classes online. (Reuters)

EU: Economic confidence improves marginally in Sept. Eurozone economic confidence improved marginally in Sept, survey results from the European Commission showed. The economic confidence index rose unexpectedly to 117.8 in Sept from 117.6 in the previous month. The score was forecast to fall to 116.9. The stability of the economic sentiment in Sept resulted from improving confidence in construction and among consumers being offset by worsening confidence in services and retail trade. The industrial sentiment index improved to 14.1 in Sept from 13.8 in Aug, while it was forecast to fall to 12.5. Meanwhile, the services confidence index dropped more-than expected to 15.1 from 16.8 a month ago. The consumer confidence index advanced to -4.0, in line with flash estimate, from -5.3 in the previous month. (RTT)

EU: Germany import price inflation strongest in nearly 40 years. Germany's import price inflation accelerated to the highest since 1981 due to higher energy prices, data published by Destatis revealed. Import prices grew 16.5% YoY in Aug, after rising 15%in July. Economists had forecast an annual growth of 16.1% This was the highest annual rate seen since Sept 1981, when prices were up 17.4%. MoM, import prices were up 1.4%, following a 2.2% rise in July. Prices were forecast to grow 1.2%. Destatis said energy imports were 93.6% more expensive than in Aug last year. (RTT)

EU: Italy producer prices increase for seventh month. Italy's producer prices rose for the seventh month in a row in Aug, data from the statistical office Istat showed. The producer price index increased 11.6% YoY in Aug, following a 11.2% rise in July. On a monthly basis, producer prices rose 0.5% in Aug, after a 2.9% increase in the preceding month. In the domestic market, producer prices grew 0.4% MoM in Aug. Producer prices in the foreign market increased by a 0.6% monthly in Aug. (RTT)

UK: Mortgage approvals at 13-month low. UK mortgage approvals declined to a 13-month low in Aug, data from the Bank of England showed. Mortgage approvals for house purchases fell to 74,453 in Aug from 75,126 in July. This was the lowest since July 2020. However, approvals remained above pre-Feb 2020 levels. The expected level was 73,000. According to BoE, individuals borrowed GBP5.3bn of mortgage debt in Aug, following a net repayment of GBP1.8bn.. (RTT)

UK: Households' perception about financial wellbeing weakens in 3Q . UK households' overall perception about financial wellbeing weakened in the 3Q despite the rise in household income from employment, data published by IHS Markit showed. The Scottish Widows household finance index fell to 44.0 in the 3Q from 44.7 in the 2Q. Despite fading in the 3Q, the pace of decline remained slower than at any other time since the onset of the COVID-19 pandemic, and a far cry from the spring of 2020. (RTT)

UK: Shop prices fall at slower pace in Sept. UK shop prices declined at a slower pace in Sept, data published by the British Retail Consortium, or BRC. The shop price index dropped 0.5% YoY in Sept after easing 0.8% in Aug. Food prices edged up 0.1% and non-food prices were down 1.0% annually. Food prices rose for the first time in six months and some non-food products, such as DIY & gardening, are seeing the highest rate of inflation since summer 2018. (RTT)

South Korea: Business confidence ebbs in Sept. Business sentiment in South Korea slipped in Sept, the Bank of Korea said with a Business Survey Index score of 90 - down from 95 in Aug. The outlook fell from 96 to 93. In the non-manufacturing sector, the BSI on business conditions for Sept was 79, down from 81 in the previous month, but for the outlook for remained unchanged at 81. The Economic Sentiment Index (ESI) - a composite of the BSI and the CSI (Consumer Survey Index) - for Sept was 104.6, down 0.7 points from Aug. (RTT)

South Korea: Aug factory output unexpectedly declines from July. South Korea’s factory output in Aug unexpectedly declined from a month earlier but continued to log growth on a year-on-year basis for the 10th straight month helped by strong demand for semiconductors. Industrial production last month fell by a seasonally adjusted 0.7%, missing a 0.5% gain forecast in a survey and following 0.2% growth in July. Output expanded 9.6% on an annual basis, better than 8.2% growth forecast in the poll and a 7.7% expansion in July. (Reuters)

Markets

Astro Malaysia (Outperform, TP: RM1.43) and Telekom Malaysia (Outperform, TP: RM6.90): Entered into a collaboration. Astro and Telekom have entered into a collaboration to provide broadband and content services (The Edge)

Comment: This collaboration is part of their commitment in supporting the Jalinan Digital Negara (JENDELA) initiative in providing wider broadband coverage and better customer experience nationwide. As part of the collaboration, Telekom will provide Astro with a full suite of infrastructure and connectivity solutions i.e high-speed broadband (HSBB), backhaul access etc. This will enable Astro’s customers to gain access to HSBB services, better internet connectivity and experience without Astro having to build its own network infrastructure. Additionally, Astro would be able to strengthen and grow its video streaming services. As for TM, this should help to expand its wholesale revenue. No change to our earnings forecasts as we have factored in such organic growth in our assumptions. Maintain our Outperform rating on both Astro and Telekom.

Widad: Clinches RM244m job from JKR for Kota Bharu Kuala Krai Expressway project. Widad Group has announced that its wholly-owned subsidiary Widad Builders SB (WBSB) has accepted a letter of award (LoA) from the Malaysian Public Works Department (JKR) for a RM244.3m project to build Package 3C of the Kota Bharu–Kuala Krai Expressway (KBKK) in Kelantan. The group said the work will commence on Dec 27 this year and is slated to be completed in the next three years. (The Edge)

Hong Seng: Partners Pow Pocket to offer digitised healthcare services. Hong Seng Consolidated has signed an agreement with Pow Pocket SB to work together in the digitalisation of healthcare services through their respective e commerce platforms. Hong Seng said the two sides are seeking to cooperate with each other in the integration of business development activities centred around health services and the digitalisation of these services. (The Edge)

IOI Properties: Announces subsidiary’s successful bid to buy Singapore's Marina View tract. IOI Properties Group announced its wholly-owned subsidiary Boulevard View Pte Ltd’s successful bid to buy an estimated 0.78ha (7,817.6 sqm) leasehold land known as the White site at Singapore’s Marina View enclave for SGD1.508bn (approximately RM4.68bn) under the country's Urban Redevelopment Authority's (URA) invitation to tender which saw Boulevard View becoming the sole bidder. (The Edge)

Impiana Hotels: To begin construction of RM380m GDV Cherating resort. Impiana Hotels will be commencing the development of Impiana Resort & Residences Cherating with a total gross development value (GDV) of approximately RM380m. The company said the GDV is more than double Impiana's market capitalisation of approximately RM118m. Sitting on a 30- acre beachfront land, Impiana Cherating will be developed in three phases, targeted to be completed by 2023. (StarBiz)

Market Update

The FBM KLCI might open lower today after stocks on Wall Street struggled to claw back their losses on Wednesday after fears about prolonged inflation and rising interest rates prompted the worst day for US equity markets since May during the previous session. The blue-chip S&P 500 share index rose 0.2%, recouping only a small portion of the declines it tallied on Tuesday when the benchmark fell 2%. The technology-focused Nasdaq slid a further 0.2% following its 2.8% decline the previous session. The performance was weaker than in European markets, where the continent-wide Stoxx 600 advanced 0.6%, and Germany’s Dax rose 0.8%. Last week policymakers at the US Federal Reserve and Bank of England indicated that their first post-pandemic rate rises could come sooner than markets had expected as they acknowledged the troubles of rising inflationary pressures.

Back home, Bursa Malaysia finished at its intra-day high for the second consecutive day on Wednesday, lifted by late buying in selected financial services as well as industrial products and services counters amid concerns over the local and global economic outlook. At 5pm, the benchmark FBM KLCI added 0.83 of-a-point or 0.05% to 1,547.65 from Tuesday’s close of 1,546.82. The regional markets finished mixed with the Shanghai Composite gained 1.14%, while the Nikkei 225 led the Hang Seng lower. They fell 2.07% and 0.27% respectively.

Source: PublicInvest Research - 30 Sept 2021

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