PublicInvest Research

PublicInvest Research Headlines - 26 Apr 2022

Publish date: Tue, 26 Apr 2022, 09:09 AM
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.

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EU: German Ifo business confidence unexpectedly improves in April. Germany's business confidence unexpectedly improved in April as the economy showed its resilience after the initial shock of the Russian attack, survey data published by the ifo Institute showed. The business climate index rose to 91.8 in April from 90.8 in March. The reading was forecast to fall to 89.1. The improvement reflects less pessimism in companies' expectations, while their view on the current situation is minimally better. The current situation indicator came in at 97.2, slightly up from 97.1 a month ago. Economists had expected the index to decline to 95.8. Similarly, the business expectations index climbed to 86.7 from 84.9, while the reading was seen easing to 83.5. (RTT)

EU: Spain producer price inflation strongest since 1976. Spain producer prices increased at the fastest pace since 1976 on surging energy prices in March, data released by the statistical office INE. Producer price inflation advanced to 46.6% in March from 41.2% in the previous month. This was the fastest since the series began in Jan 1976. Excluding energy, producer price inflation was 13.7% versus 12.3% in Feb. The core rate was the biggest since June 1984. Among components of PPI, energy prices recorded a sharp 134.6% growth and intermediate goods prices posted a double-digit growth of 22.9%. Prices of consumer goods and capital goods were up 8.5% and 5.1%, respectively. MoM, producer prices gained 6.6%, following a 2.1% rise in Feb, data showed. (RTT)

UK: CBI manufacturing sentiment deteriorates sharply in April. Business optimism among UK manufacturers declined sharply in April after production and orders logged a slowdown in growth, the Industrial Trends Survey sponsored by Accenture showed. The business sentiment index fell to -34% in three months to April from -  9% in three months to Jan. This was the sharpest decline since April 2020, according to the survey conducted by the Confederation of British Industry. Output increased at a slower pace in the quarter to April, with the balance declining to +19% from +27%. The order book balance came in at +22% in three month to April, compared with +38% in Jan. (RTT)

Japan: Leading index falls more than estimated. Japan's leading index declined more than initially estimated in Feb, final data from the Cabinet Office showed. The leading index, which measures the future economic activity, fell to 100.0 in Feb from 101.2 in Jan. The initial score was 100.9. Meanwhile, the coincident index that measures the current economic situation, rose to 96.8 in Feb from 96.3 in the previous month. According to the initial estimate, the reading was 95.5. At the same time, the lagging index advanced to 95.0 in Feb versus 96.5 in the initial estimate. In Jan, the reading was 94.5. (RTT)

Taiwan: Industrial production growth eases in March. Taiwan's industrial production increased at a softer pace in March, data from the Ministry of Economic Affairs showed. Industrial output increased 2.15% YoY in March, after a 9.47% rise in Feb. Manufacturing output rose 1.95% in March, after a 9.61% increase in the previous month. Electricity, gas and water supply output grew 5.06%. Meanwhile, mining and quarrying production fell 4.95% and water supply output declined 2.57%. On a MoM basis, industrial production decreased 6.50% in March, after a 3.36% rise in the prior month. Separate data from the statistical office showed that the retail sales rose 4.82% yearly in March, following a 0.18% increase in Feb. (RTT)

Thailand: Domestic car sales rise in March, as car exports fall. Domestic car sales in Thailand in March rose 9.1% from a year earlier to 87,245 units, helped by improved economic activity following an easing of coronavirus curbs and relief measures, the Federation of Thai Industries (FTI) said. Higher-than-expected bookings during a motor show held in Bangkok between late March and early April were also a boost. In the 1Q of 2022, car sales jumped 19.1% from a year earlier to 231,189 vehicles. Given a very strong 1Q, there is a high chance that car sales will reach 900,000 units this year, exceeding our target. Earlier, the FTI forecast domestic car sales of 800,000 to 850,000 vehicles and exports of 950,000 to 1m cars. Thailand is a regional vehicle production and export base for the world’s top carmakers, including Toyota, Honda and Mitsubishi. (Reuters)

Singapore: Inflation rises more than expected. Singapore consumer prices and core inflation increased more than expected in March, data published by the Monetary Authority of Singapore and the Ministry of Trade and Industry showed. Consumer prices increased 5.4% YoY in March, following a 4.3% rise in Feb. Economists had expected the inflation rate to rise moderately to 4.7%. The latest increase in inflation was due to higher food prices, private transport and accommodation inflation. MAS core inflation rose to 2.9% in March from 2.2% in the previous month. Economists had forecast a rise of 2.4%. The higher core inflation was largely driven by higher inflation for food and services. On a monthly basis, consumer prices grew 1.2% in March and the core CPI rose 0.7%. External inflationary pressures have increased amid sharp rise in global commodity prices and renewed supply chain disruptions due to both the Russia-Ukraine conflict and the regional pandemic situation. (RTT)


IHH (Outperform, TP: RM7.50): Fortis gets final order to recover RM225m from former controlling shareholders. IHH Healthcare said its unit Fortis Healthcare Ltd has received a final order from the Indian regulators to recover 397.12 crore rupees (RM225m) with interest, which is said to be diverted from the Fortis group for the benefit of its former controlling shareholders. IHH said the Securities and Exchange Board of India (SEBI) also imposed a penalty of one crore rupees (RM567,000) and 50 lakh rupees (RM284,000) on Fortis and its wholly-owned unit Fortis Hospitals Ltd, respectively. (The Edge)

Comments: We understand that this was in relation to the matter on the qualified opinion on its FY19 and FY21 financial statements on the basis that an investigation report was submitted to the Fortis Board prior to IHH acquisition indicating systematic lapses and/or override of internal control. We are neutral on this development as it is one-off. Financial impact on FY22 earnings, after taking into account IHH’s controlling stake of 31.17% in Fortis Group, is estimated to be RM69.9m, which accounts for ~5% of IHH’s FY22F PATAMI.

Press Metal: Reaches settlement on additional tax assessments, to pay RM27m. Press Metal Aluminium Holdings has reached an “amicable settlement” with the Inland Revenue Board in respect of additional assessments for the years 2014 to 2019. Press Metal Bintulu SB reached a final settlement of RM26.74m based on a letter received from the IRB dated April 22. (The Edge)

Ireka: External auditors resign due to lack of resources to perform auditing services. Ireka Corp received a written notice from Messrs Crowe Malaysia PLT indicating their intention to resign as the external auditors of the company. The matter was tabled at a special audit committee meeting on April 25 with the board subsequently accepting the resignation as recommended by the audit committee. (The Edge)

TT Vision: Gets Bursa's nod to delist from LEAP Market, aims for ACE Market. Bursa Securities has granted TT Vision Holdings (TTVHB) request to delist from the LEAP Market. Following this, the company is required to furnish the regulator with a letter confirming the details of the shareholders of TTVHB as at Jan 24. Trading in TTVHB's shares will be suspended upon the expiry of five market days. (The Edge)

XOX: Marks F&B diversification with Mid Valley Megamall outlet. XOX has partnered with Incite Foodtech SB to open its first food and beverage (F7B) outlet in Mid Valley Megamall, marking the company's first venture in the F&B space. The lifestyle space was expected to contribute as an additional revenue stream to the company. (BTimes)

Petronas Dagangan: In close talks with government on new mechanism of petrol subsidy. Petronas Dagangan is in close discussion with the government on the proposed implementation of new petrol subsidy mechanism. The government is reviewing the fuel and cooking oil subsidy mechanism so that it will be more targeted toward aiding and subsidising the vulnerable groups and those who really need help. (BTimes)

Market Update

Overnight, US stocks rebounded after concerns about new lockdowns in China and fears of a slowdown in economic growth pushed investors to search for safety earlier in the day. Wall Street’s benchmark S&P 500 index closed 0.6% higher, having dropped as much as 1.7% earlier in the day. The tech-heavy Nasdaq Composite rose 1.3% as investors treated recent declines as a buying opportunity ahead of a busy week of earnings reports. Last Friday marked the S&P’s second-worst trading day of the year, and both indices are still down more than 2% over the past week. The late turnround in the US contrasted with sharp drops in European and Asian markets, including the biggest one-day decline in mainland China’s CSI 300 since February 2020. Panic buying gripped Beijing on Sunday and Monday as residents braced for harsh social restrictions due to Covid-19 similar to those in Shanghai. The prospect of a further economic slowdown in the world’s largest oil importer knocked the price of Brent crude, the international oil benchmark, which fell 4.1% to USD102.32 a barrel. The Europe-wide Stoxx 600 index dropped 1.8% as investors shrugged off Emmanuel Macron’s victory in the second round of the French Presidential election.

Back home, Bursa Malaysia ended broadly lower on Monday on persistent selling in selected heavyweights amid bearish sentiment surrounding regional stock markets. At 5pm, the benchmark FBM KLCI declined 11.99 points or 0.75% to end at its intraday low of 1,589.98 from last Friday’s close of 1,601.97. Elsewhere, South Korea’s Kospi declined 1.8%, and Japan’s Nikkei 225 contracted 1.9%.

Source: PublicInvest Research - 26 Apr 2022

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