PublicInvest Research

PublicInvest Research Headlines - 11 Aug 2022

PublicInvest
Publish date: Thu, 11 Aug 2022, 09:49 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: Consumer prices unexpectedly unchanged in July. With a sharp pullback in gasoline prices offsetting higher prices for food and shelter. Its consumer price index was unchanged in July after jumping by 1.3% in June. Compared to the same month a year ago, consumer prices in July were up by 8.5%, reflecting a slowdown from the 9.1% spike in June. The annual rate of price growth was expected to slow to 8.7% from the four-decade high seen in the previous month. Meanwhile, the report said core consumer prices, which exclude food and energy prices, rose by 0.3% in July after climbing by 0.7% in June. Core prices were expected to increase by 0.5%. The annual rate of core consumer price growth was unchanged at 5.9%. (RTT)

US: Wholesale inventories jump slightly less than expected in June. Wholesale inventories shot up by 1.8% in June after leaping by an upwardly revised 1.9% in May. The continued surge in wholesale inventories came as inventories of durable goods soared by 2.0%, while inventories of non-durable goods shot up by 1.4%. Wholesale sales also jumped by 1.8% in June after climbing by 0.7% in May. Sales of non-durable goods spiked by 2.1%, while sales of durable goods rose by 0.7%. With inventories and sales increasing at the same rate, the inventories/sales ratio for merchant wholesalers was unchanged from the previous month at 1.26. (RTT)

EU: Denmark inflation highest since February 1983. Denmark's consumer price inflation rose to the strongest level since early 1983, largely driven by higher food, fuel and utility costs. Consumer price inflation accelerated to 8.7% in July from 8.2% in June. The latest inflation was the highest since Feb 1983, when it had risen the same 8.7%. Excluding energy and fresh food, core inflation rose to 5.5% in July from 4.8% in the previous month. This was the highest since Feb 1988. Prices for food and non-alcoholic beverages alone grew 14.6% annually in July, and transport costs surged 13.4%. Utility costs were 9.3% more expensive compared to last year, and charges for restaurants and hotels rose 9.6%. (RTT)

China: Inflation at 2-year high; factory gate inflation eases. China consumer price inflation accelerated to the highest in two years in July driven by pork prices, while factory gate inflation continued to ease. Consumer price inflation rose to a two-year high of 2.7% in July from 2.5% in June. Core inflation came in at 0.8% in July, down from 1.0% in June. Food prices gained 6.3%, following June's 2.9% rise. The sharp increase was largely due to the 20.2% surge in pork prices. Fresh vegetable prices were up 12.9%.. (RTT)

Japan: Producer prices rise 0.4% in July. Producer prices in Japan were up 0.4% on month in July. That was in line with expectations and down from the upwardly revised 0.9% increase in June (originally 0.7%). On a yearly basis, producer prices jumped 8.6% - exceeding expectations and down from the upwardly revised 9.4% in the previous month (originally 9.2%). Export prices were down 0.4% on month and up 4.7% on year in July while import prices climbed 0.8% on month and 25.4% on year. (RTT)

South Korea: Jobless rate steady at 2.9%. South Korea's unemployment rate remained unchanged in July. The jobless rate was a seasonally adjusted 2.9% in July, same as seen in June. In July last year, the unemployment rate was 3.3%. On an unadjusted basis, the unemployment rate declined to 2.9% in July from 3.0% in the previous month. In the same month last year, the unemployment rate was 3.2%. The number of unemployed decreased to 836,000 in July from 888,000 in the preceding month. Compared to a year ago, the figure decreased by 84,000 persons. The number of employed persons increased by 826,000 YoY to 28.475m in July. (RTT)

Thailand: Central bank raises key rate for first time since 2018. The Bank of Thailand raised its key interest rate for the first time in over three-and-a-half years as inflation is expected to remain above the target throughout this year. The Monetary Policy Committee voted 6 to 1 to raise the policy rate by a quarter-point to 0.75%. One MPC member sought to raise the policy rate by 50 basis points. The latest hike was the first since Dec 2018, when the policy rate was raised by 25 basis points to 1.75%. The previous change in the rate was a quarter point cut in May 2020. The committee observed that the economic recovery will continue to gain traction and the extraordinarily accommodative monetary policy will become less needed. In July, consumer price inflation slowed to 7.6%, but well above the central bank's 1-3% target. (RTT)

Markets

Capital A (Neutral, TP: RM0.69), MAHB: Discontinue all legal proceedings against each other. Malaysia Airports Holdings Bhd (MAHB) and Capital A have both decided to drop legal proceedings against each other that they initiated via their subsidiaries Malaysia Airports (Sepang) SB (MASSB) and AirAsia Aviation Group Ltd (AirAsia Group). (The Edge)

Swift Haulage: To acquire Singapore-based Watt Wah Petroleum Haulage. Swift Haulage plans to buy Singapore’s Watt Wah Petroleum Haulage Pte Ltd, which is involved in the transporting of petroleum products, for SGD1.6m (RM5.18m) cash. It will also take over Watt Wah's shareholders' loan that amounted to SGD8.5m as on June 30. It has entered into a binding order (BO) with Watt Wah’s sole shareholder, DLT Enterprise Pte Ltd for the acquisition. (The Edge)

MISC: Consortium wins LNG charter contract from QatarEnergy. MISC, via a consortium that includes Japanese and Chinese companies, has won long-term time charter contracts from Qatar’s state-owned energy company for seven newbuild liquefied natural gas (LNG) carriers. The seven new 174,000 cubic metres newbuilding vessels will serve QatarEnergy – one of the world’s largest LNG producers – in transporting LNG to various countries. (StarBiz)

Ranhill Utilities: Gets 4-year PPA extension for solar project. Ranhill Utilities’ wholly owned subsidiary Ranhill Solar I SB (RSI) has obtained a four-year extension of a power purchase agreement (PPA) for the 50MWac large-scale solar photovoltaic plant at Batang Padang, Perak under the LSS4@MEnTARI. (StarBiz)

Bintai Kinden: Inks partnership with PT Raintech Indo Energi. Bintai Kinden Corp is collaborating with PT Raintech Indo Energi to market and promote flanges, fittings, pipes and other oil and gas equipment in Indonesia. (Starbiz)

Pertama Digital: To make regularisation plan known in due course. Pertama Digital Bhd (PDB) is looking into formulating a regularisation plan to address issues regarding paragraph 8.03A Affected Listed Issuer Status and will announce its regularisation plan in due course. (The Edge)

KPower: Unit gets green light from Terengganu state govt for mixed housing project. KPower has received approval from the Terengganu state government to develop affordable and mixed housing development on 18.959 hectares of land in Kuala Nerus district, Terengganu. (The Edge)

Green Packet: Sells remaining shares in G3 Global. Green Packet has disposed of its remaining shares in G3 Global Bhd for RM5.78m. Green Packet sold the remaining amount of 115.25m G3 Global shares, representing a 3.97% stake in the open market via direct business transaction on Aug 10. (The Edge)

IPO: Agmo Holdings IPO's public portion oversubscribed by 120 times. The public portion of Agmo Holdings Bhd's initial public offering (IPO) has been oversubscribed by 120.15 times as investors applied for shares to a value of more than RM500m. (The Edge)

Market Update

The FBM KLCI might open lower today after US stocks rallied on Wednesday, with the tech-heavy Nasdaq Composite index closing more than a fifth above lows hit earlier this year, after fresh data showed inflation steadying in the world’s largest economy. Consumer prices in the US rose 8.5% year on year in July, a slower increase than in June and below economists’ forecasts of 8.7%. The data published on Wednesday also showed that on a month-on-month basis, there was no increase in inflation in July compared with the 1.3% monthly rise in June. The figures added further fuel to a two-month recovery in financial markets, as traders bet the Federal Reserve might be led to temper its aggressive interest rate rises aimed at subduing soaring prices. The Nasdaq Composite, which includes big technology companies such as Apple and Microsoft, rose 2.9% on Wednesday, bringing its gains to 20.7% from lows reached in June. The fast-growing businesses in the index were hard hit this year as investors slashed their global growth forecasts and yields on Treasury bonds surged. The blue-chip S&P 500 stock index advanced 2.1%, closing above 4,200 for the first time since early May. The benchmark has climbed 14.8% from its nadir in 2022, although US stocks in aggregate are still worth about USD8.6tn less than when the year started. In Europe, the Stoxx 600 index closed up 0.9% and Germany’s Dax index gained 1.2% after losses in the previous session.

Back home, Bursa Malaysia closed lower on Wednesday in sync with regional bourses, as risk appetites were affected by the US inflation data amidst the ongoing corporate earnings season. At 5pm, the FBM KLCI fell 5.35 points to 1,492.33 from Tuesday’s close of 1,497.68, weighed down by selling in selected index-linked counters, led by Hartalega Holdings Bhd. Declines in tech stocks dragged down indices in the region, which closed before the publication of the CPI data. Hong Kong’s Hang Seng closed down 2%, China’s CSI 300 benchmark of Shanghai and Shenzhen-listed stocks fell 1.1% and Japan’s Topix closed down 0.2%.

Source: PublicInvest Research - 11 Aug 2022

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