PublicInvest Research

PublicInvest Research Headlines - 26 Nov 2021

PublicInvest
Publish date: Fri, 26 Nov 2021, 10:48 AM
PublicInvest
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.

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Economy

US: Economy eyes strong 2021 finish as labor market tightens, spending accelerates . The number of Americans filing new claims for unemployment benefits dropped to a 52-year low last week, suggesting economic activity was accelerating as a year ravaged by shortages, high inflation and an unrelenting pandemic draws to a close. The plunge in claims reported by the Labor Department was, however, exaggerated by difficulties adjusting the data for seasonal fluctuations this time of the year. Still, the labor market is tightening, with jobless rolls shrinking in mid-Nov to the smallest since March 2020 when the economy was in the grips of the first wave of COVID-19 infections. (Reuters)

EU: German GDP expands less than estimated in 3Q . The German economy expanded slightly less than estimated in the third quarter on weak investment and exports, revised data from Destatis showed. GDP grew 1.7% sequentially in the 3Q, instead of 1.8% estimated on Oct 29. Destatis said the recovery of the German economy thus continued in summer, after the GDP had grown by 2.0% in the 2Q. The expenditure-side breakdown showed that household spending grew strongly by 6.2%, while government spending fell 2.2% in the 3Q. (RTT)

EU: ECB policymakers must keep sufficient options for future beyond Dec - Minutes. Staff projections in Dec may not resolve all uncertainties around the medium-term outlook and policymakers must keep sufficient options for future monetary policy actions, the minutes of the latest ECB meeting showed. "While the Governing Council would benefit from new staff macroeconomic projections at its Dec meeting, it was cautioned that the data available in Dec would not resolve all the uncertainties around the medium-term inflation outlook," the ECB said in the minutes, which it called "account" of the Oct 27-28 policy session. "It was seen as important that the Governing Council should keep sufficient optionality to allow for future monetary policy actions, including beyond its December meeting." (RTT)

UK: Retail sales growth improves in Nov: CBI. UK retailers reported an increase in sales growth in Nov as clothing and department stores logged a big upward swing in sales volume, the Distributive Trades Survey results from the Confederation of British Industry showed. The retail sales balance rose to 39% in Nov from 30% in Oct. A net 56% expects sales to pick up in Dec. "Christmas seems to have come early for retailers," Ben Jones, CBI lead economist, said. "It seems likely that reports of supply chain disruptions prompted consumers to start their Christmas shopping early," said Jones. Meanwhile, the order book balance fell to 30% from 48% in the previous month. (RTT)

UK: House price growth expectations strengthen MoM, says Knight Frank. Supply chains came under strain in Sept affecting business confidence, but not UK households’ belief in the residential property market, which remained steadfastly upbeat in relation to house prices, according to Knight Frank Malaysia associate director, international residential project marketing, Dominic Heaton-Watson. Heaton-Watson said in a press release: “Expectations around current and future house price growth strengthened MoM, with the net balance climbing to 61 and 67 respectively in Sept, according to IHS Markit. (The Edge)

Japan: Leading index falls less than estimated. Japan's leading index decreased less than estimated in Sept, final data from the Cabinet Office showed. The leading index, which measures the future economic activity, fell to 100.9 in Sept from 101.3 in Aug. In the initial estimate, the reading was 99.7. The coincident index decreased to in Sept from 91.3 in the previous month. According to the initial estimate, the reading was 87.5. The lagging index remained unchanged at 94.1 in September. In the initial estimate, the reading was 94.9. (RTT)

Hong Kong: Exports rises in Oct . Hong Kong's merchandise exports increased in Oct, data from the Census and Statistics Department showed. Exports rose 21.4% YoY in Oct, after a 16.5% increase in Sept. Imports gained 17.7% annually in Oct, after a 23.5% increase in the previous month. The trade deficit widened to HKD30.46bn in Oct from HKD36.76bn in the same month last year. In September, the deficit was HKD42.39bn. (RTT)

Markets

Hextar (Outperform, TP: RM1.71), Rubberex, Pekat: Team up on ESG initiative project. Hextar Global, Rubberex Corp (M) and Pekat Group have teamed up to promote the use of solar photovoltaic (PV) systems as renewable energy sources and reduce carbon emission. The collaboration will combine their resources to donate a comprehensive solar power system for Tung Shin Hospital. This is a significant move under a joint environmental, social and governance (ESG) initiative project to help the hospital reduce its electricity bill and carbon footprint as it serves the community. (The Edge)

AirAsia (Neutral, RM0.86): Rides on e-commerce boom to launch parcel delivery service. AirAsia Group has launched a parcel delivery service to tap the e-commerce boom across the region. The carrier said that the new service, called AirAsia Xpress, is the latest venture as it expands its digital business to shore up the airline’s revenues that have been hard hit by the Covid-19 pandemic, AirAsia Xpress is powered by Teleport, the logistics arm of AirAsia. For a start, AirAsia Xpress will cover selected cities within Klang Valley and six other key cities nationwide, namely Melaka, Johor Bahru, Kota Bharu, Penang, Ipoh and Kota Kinabalu. (The Edge)

Serba Dinamik: Bursa rejects second request for extension to issue FY20 annual report. Bursa Malaysia has rejected Serba Dinamik Holdings's second request for an extension of time to issue its annual report for the FYE 30 June, 2021. Serba Dinamik shares have been suspended since Oct 22 and were last traded at 35 sen, giving the company a market capitalisation of RM1.3bn. (The Edge)

ATA IMS: Contract termination by Dyson effective June, 2022. ATA IMS has confirmed that it received notices of termination from Dyson Operations and Dyson Manufacturing. The company said the effective date of termination is June 1, 2022 and until the termination date, Dyson and ATA shall continue to fully perform their respective obligations under the contracts. For ATA IMS, these include continuing to manufacture and supply products, components and tooling, and continuing to provide services for and on behalf of Dyson and its affiliates in accordance with the terms of the contracts. (The Edge)

AME: To list RM557m of industrial assets under REIT. AME Elite Consortium is planning to list RM557m worth of industrial and industrial-related real estate assets via its upcoming real estate investment trust, AME REIT. The group said the initial investment portfolio will comprise a total of 34 industrial buildings and workers’ dormitories located in or near its managed industrial parks, namely i-Park @ Senai Airport City, i-Park @ Indahpura, and i-Park @ SiLC. (The Edge)

Petronas Dagangan: To deploy fast EV charger in pact with Mercedes-Benz & EV Connection. Petronas Dagangan (PDB) plans to deploy DC fast EV charger at Petronas stations in collaboration with Mercedes-Benz Malaysia SB and EV Connection SB. Petronas signed a Memorandum of Understanding (MoU) with Mercedes-Benz Malaysia and EV Connection for the deployment by the first half of 2022. The partnership aims to address EV drivers' pain point of insufficient fast chargers in Malaysia. (BTimes)

Market Update

The FBM KLCI might open higher today after European stocks edged higher on Thursday as traders weighed up strong US economic data released during the previous session and the minutes of the Federal Reserve’s latest policy meeting. The Stoxx Europe 600 gauge closed up 0.4%. The regional index had on Wednesday snapped a losing streak after closing lower in each of the four previous trading days, falling 1.3% on Tuesday. Various countries in the bloc last week introduced fresh coronavirus curbs in response to surging case numbers. Germany’s Dax index rose 0.2%, while France’s CAC 40 gauge rose 0.5%. London’s FTSE 100 index gained 0.3%. In the US, the blue-chip S&P 500 index had ended Wednesday up 0.2%, with the technology-focused Nasdaq Composite gauge closing up 0.4%. Those moves followed fresh data showing that US weekly jobless claims had reached their lowest point since 1969. Other data showed that a measure of inflation followed closely by the Fed had posted its biggest year on-year jump in October since the 1990s. Wall Street was shut for Thanksgiving Holiday on Thursday.

Back home, Bursa Malaysia ended lower on Thursday with the benchmark index below the 1,520 mark amid weak sentiment. At 5pm, the benchmark FFBM KLCI declined 4.67 points to finish at 1,517.6 from 1,522.27 on Wednesday. Japan’s Nikkei 225 climbed 0.7%, lifted by financial stocks that got a boost from Tokyo’s decision to issue new sovereign bonds to fund an extra budget. In a sign of inflationary pressures globally, South Korea’s central bank raised a key policy rate for the second time in three months. The country’s benchmark Kospi stock index closed down 0.5%. Elsewhere in Asia, China’s Shanghai Composite Index retreated 0.2%, while Hong Kong’s Hang Seng Index rose 0.2%.

Source: PublicInvest Research - 26 Nov 2021

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