PublicInvest Research

PublicInvest Research Headlines - 25 Nov 2021

Publish date: Thu, 25 Nov 2021, 10:10 AM
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:

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US: Personal income and spending increase more than expected in Oct. Personal income in the US rebounded by more than expected in the month of Oct, according to a report released by the Commerce Department, while the report also showed a bigger than expected jump in personal spending. The Commerce Department said personal income climbed by 0.5% in Oct after slumping by 1.0% in Sept. Economists had expected personal income to edge up by 0.2%. Disposable personal income, or personal income less personal current taxes, also rose by 0.3% in Oct after tumbling by 1.3% in the previous month. (RTT)

US: Fed minutes raise possibility of sooner-than-anticipated rate hikes. Reflecting concerns about the pace of inflation, the minutes of the Fed's monetary policy meeting in early November revealed some participants felt the central bank should be prepared to raise interest rates sooner than currently anticipated. The minutes released said various participants believe the Fed might need to both reduce asset purchases and raise rates if inflation continues to run higher than levels consistent with the central bank's objectives. However, others argued that a patient attitude remained appropriate in light of the considerable uncertainty about developments in supply chains, production logistics, and the course of the coronavirus pandemic. (RTT)

US: Consumer sentiment drops slightly less than initially estimated in Nov . The University of Michigan released a report showing consumer sentiment in the US decreased by slightly less than initially estimated in the month of Nov. The report said the consumer sentiment index for Nov was upwardly revised to 67.4 from the preliminary reading of 66.8. Economists had expected the index to be upwardly revised to 66.9. Despite the upward revision, the consumer sentiment index was down from 71.7 in Oct and was still at its lowest level since hitting 63.7 in November of 2011. "Consumers expressed less optimism in the November 2021 survey than any other time in the past decade about prospects for their own finances as well as for the overall economy," said Surveys of Consumers chief economist Richard Curtin. (RTT)

US: Jobless claims tumble to lowest level in over 50 years . A report released by the Labor Department showed first-time claims for US unemployment benefits slid to their lowest level in over fifty years in the week ended November 20th. The Labor Department said initial jobless claims tumbled to 199,000, a decrease of 71,000 from the previous week's revised level of 270,000. Economists had expected jobless claims to edge down to 260,000 from the 268,000 originally reported for the previous week. With the much bigger than expected decrease, jobless claims fell to their lowest level since hitting 197,000 in Nov of 1969. However, Michael Pearce, Senior US Economist at Capital Economics, said the drop in jobless claims appears to be due to the later timing of Thanksgiving this year throwing off the seasonal adjustment, noting claims rose by 18,000 to 259,000 in non-seasonally adjusted terms. The report showed the less volatile four-week moving average dipped by 21,000 to 252,250, once again hitting its lowest level since the week ended March 14, 2020. (RTT)

EU: German Ifo business confidence deteriorates in Nov . Germany's business sentiment weakened in Nov as the fourth wave of pandemic caused expectations to fall especially in the service sector, survey results from the ifo Institute showed. The business confidence index fell to 96.5 in November from 97.7 in Oct. The reading was forecast to drop to 96.6. Companies were less satisfied with their current business situation, and expectations became more pessimistic. The current conditions indicator came in at 99.0, in line with expectations, and down from 100.2 a month ago. At the same time, the business expectations index posted 94.2 in November. The score was expected to fall to 95.0 from October's 95.4. Supply bottlenecks and the fourth wave of the coronavirus are challenging German companies, Clemens Fuest, ifo President, said. (RTT)

UK: Factory orders growth hits record, inflation climbs too. British industrial orders surged this month with a growth measure hitting its highest since at least 1977 and price expectations among manufacturers also climbed to a 44-year high, according to a survey published. The survey is likely to add to unease at the Bank of England about growing inflation pressures ahead of the British central bank's announcement on Dec 16 about whether it is raising interest rates from their pandemic lows. (Reuters)

Singapore: GDP growth to moderate next year after 2021 rebound . Singapore's economy is expected to grow about 7% in 2021, at the top of the official forecast range, and will expand at a slower pace next year as an uneven recovery continues across sectors, the government said. The Ministry of Trade and Industry (MTI) forecast the economy to grow 3% to 5% next year. "The recovery of the various sectors of the economy is expected to remain uneven in 2022," said Gabriel Lim, permanent secretary for trade and industry. He expects outward-oriented sectors such as manufacturing and wholesale trade to remain strong, while activity in aviation- and tourism-related sectors would remain below pre COVID levels throughout 2022. (Reuters)

Indonesia: Bank Indonesia to reduce liquidity in 2022, keep rates low until inflation rises. Indonesia's central bank plans to reduce the amount of excess liquidity in the banking system next year without disrupting lending, but will keep interest rates low until it sees signs of inflation rising, its governor said. This would reflect a shift in Bank Indonesia's (BI) monetary policy stance to "pro stability" in 2022, from "pro-growth" currently, Perry Warjiyo said, adding that the bank's other policies will remain supportive of the economic recovery. (Reuters)

New Zealand: Hikes rates again, warns homeowners to get ready for more. New Zealand's central bank raised interest rates for the second straight month to keep surging consumer prices in check and warned homeowners in the country's red hot housing market to get ready for more hikes. The Reserve Bank of New Zealand (RBNZ) lifted the official cash rate (OCR) a quarter of a percentage point to 0.75% in the final policy meeting of the year, as the country shakes off its pandemic slump and prepares to reopen to the world. (Reuters)


IHH (Outperform, TP: RM6.80): Confirms discussions relating to sale of China hospitals, but no definitive decisions yet. IHH Healthcare said there have been discussions on the strategic directions of its investments in China but no decision has been made yet, in response to an article. A report by Bloomberg said the group is weighing the sale of Parkway China for as much as USD1bn (RM4.2bn), quoting sources. (The Edge)

Serba Dinamik: Chairman, director quit in protest against Bursa demands. More board members have resigned from Serba Dinamik. The company has announced the resignations of its chairman Datuk Mohamed Ilyas Pakeer Mohamed and independent director Johan Mohamed Ishak, less than six months after the duo joined the board in mid-June. Both cited the same reason for their departure, which is that Bursa Malaysia's stipulations had stopped them from fairly discharging their duties. (The Edge)

Supermax: UK probing company over forced labour allegations — report. The UK government has launched an investigation into one of its National Health Service's (NHS) main suppliers of personal protective equipment - Supermax Corp, over allegations of forced labour. Citing officials at the UK Department for Business, Energy and Industrial Strategy (BEIS), the Guardian reported that they are investigating Supermax, which won a GBP316m (RM1.78bn) contract for 88.5m rubber gloves amid the Covid-19 pandemic. (The Edge)

MYEG: Inks partnership with A Tech Insure for motor vehicle and road tax renewal services for Malaysian civil servants. MY EG Services (MYEG) announced that it has inked a memorandum of understanding (MoU) with A Tech Insure SB to provide Malaysian civil servants a platform to purchase motor vehicle takaful coverage together with road tax renewals by way of an interest-free Shariah-compliant Qard loan facility. The group said the platform enables instalment payments via a salary deduction plan of up to 10 months. (The Edge)

Pecca: To collaborate with MARii on product expansion and EVs parts technology. Pecca Group signed a memorandum of understanding (MoU) with Malaysia Automotive Robotics and IoT Institute (MARii) for the market expansion of products, as well as collaboration in electric vehicles (EVs) parts and components technology for the company and its subsidiaries. (The Edge)

SAM Engineering: 2Q net profit rises slightly on higher aerospace and equipment segment revenue. SAM Engineering & Equipment (M) reported a 6.65% rise in net profit to RM16.51m for its 2QFY22, from RM15.48m a year earlier, due mainly to an increase in contribution from its aerospace and equipment segment. (The Edge)

MBM Resources: Posts net loss in 3Q as lockdown measures impact vehicle sales. MBM Resources reported a net loss of RM5.25m for its 3QFY21, compared with a net profit of RM64.98m in the same quarter last year, amid full lockdown measures implemented during the reporting quarter that affected its operations. (The Edge)

Market Update

The FBM KLCI might open flat today as US stocks rose marginally and short-dated government debt prices dropped on Wednesday, as a number of strong US economic data added to questions about the future direction of monetary policy. The blue-chip S&P 500 index advanced 0.2% in New York, while the technology-focused Nasdaq Composite was up 0.4% after an earlier drop. In government bond markets, the yield on the two-year US Treasury note — which is sensitive to fluctuations in monetary policy expectations — rose 0.03 percentage points to 0.64%. Strong economic data and minutes from the Fed’s November meeting that showed several policymakers had advocated for a quicker reduction to stimulus programmes added to that sentiment on Wednesday. In Europe, the regional Stoxx 600 share index was up just under 0.1% at the close. London’s FTSE 100 gauge rose about 0.3%.

Back home, Bursa Malaysia ended almost flat on Wednesday due to the absence of fresh catalysts. At 5pm, the benchmark FBM KLCI eased 0.61 of-a-point to finish at 1,522.27 from 1,522.88 on Tuesday. In the region, Hong Kong’s Hang Seng index closed up 0.1% and Shanghai’s CSI 300 index was broadly flat.

Source: PublicInvest Research - 25 Nov 2021

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