PublicInvest Research

PublicInvest Research Headlines - 24 Aug 2022

Publish date: Wed, 24 Aug 2022, 09:52 AM
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Global: Business activity slumps globally, feeding recession concerns . Economic activity weakened from the US to Europe and Asia, reinforcing concerns that soaring prices and the war in Ukraine will tip the world into a recession. US business activity contracted for a second-straight month in Aug, falling to the weakest level since May 2020, S&P Global data. Activity in Asia slumped, and output in the 19-nation euro zone also fell as record energy and food inflation saps demand and more sectors succumb to the darkening outlook. The US figures pointed to weaker demand at both manufacturers and service providers as rising interest rates and high inflation weighed on consumers. (Bloomberg)

US: New-home sales plummet to slowest pace since early 2016 . Sales of new US homes fell in July for the sixth time this year to the slowest pace since early 2016, extending a months-long deterioration in the housing market fueled by high borrowing costs and a pullback in demand. Purchases of new single-family homes decreased 12.6% to a 511,000 annualized pace from a revised 585,000 in June, government data showed Tuesday. The median estimate in a Bloomberg survey of economists called for a 575,000 rate. The July sales slump is the latest example of how the housing market is buckling under the weight of high prices and elevated borrowing costs. Construction has slowed, home purchase applications are falling, and more buyers are backing away from deals. (Bloomberg)

EU: Eurozone consumer confidence rebounds from record low . Eurozone's consumer confidence unexpectedly recovered in Aug from July's record low, preliminary survey data from the European Commission showed. The flash consumer confidence index rose to -24.9 from -27.0 in July. Economists had expected the reading to worsen to -28.0. The corresponding index for the EU climbed a point to -26.0 in August. Both indicators remain below their historical lows at the onset of the COVID-19 pandemic in spring 2020, the report said. The final data for the consumer confidence index is set to be released along with the monthly economic sentiment survey results on August 30. (RTT)

UK: Manufacturing output, orders fall for first time since early 2021 . The UK manufacturing output and orders declined for the first time since early 2021, the latest monthly Industrial Trends Survey from the Confederation of British Industry and Accenture showed. A net 7% reported that output volumes decreased in the three months to August, marking the first fall since February 2021. Around 2% of respondents expect output to drop again in the next three months. The order book balance fell to -7% from +8% in July. Firms reported below "normal" orders for the first time since April 2021. The export order book balance remained at -12%. Expectations for selling price inflation picked up further in August. The corresponding balance rose to +57% from +48%. (RTT)

Singapore: Inflation rises for third month . Singapore consumer price inflation increased for a third straight month in July, led by higher prices for food, utilities, private transport and accommodation, data published by the Monetary Authority of Singapore and the Ministry of Trade and Industry showed. Consumer prices increased 7.0% YoY in July, following a 6.7% rise in June. This was in line with economists' expectations. MAS core inflation increased to 4.8% in July from 4.4% in the previous month. Economists had forecast 4.7%. Private transport inflation quickened to 22.2% in July from 21.9% in June, as car prices picked up strongly. (RTT)

Indonesia: Surprises with rate hike, raises inflation outlook . Indonesia's central bank unexpectedly raised borrowing costs for the first time since 2018 as policymakers conceded that inflation pressures have risen, revising their price forecasts higher. Bank Indonesia (BI) raised its seven-day reverse repurchase rate by 25bps to 3.75%, a move predicted by only seven of 31 economists in a Bloomberg survey. BI raised its forecasts for headline and core inflation this year and said it sees risks that average price gains could exceed the 2%-4% target not just this year but also in 2023. (Bloomberg)


Cabnet: Secures RM23.3m award for Bayan Lepas project. Cabnet Holdings Bhd's subsidiary Cabnet Systems (M) SB has secured an appointment from Unique Arena SB as a subcontractor for a project in Bayan Lepas, Pulau Pinang for RM23.3m. The works commence on Aug 23, 2022, and is scheduled to be completed on March 13, 2023. (The Edge)

Gopeng: Secures four-year PPA extension for solar project. Gopeng has obtained a four-year extension from the Energy Commission (EC) to the 21-year power purchase agreement (PPA) with Tenaga Nasional Bhd that it was awarded for the development of a large-scale solar photovoltaic plant of 50-megawatt alternating current (MWac) in Kampar, Perak. The tenure of the PPA will be 25 years after the extension. (The Edge)

G Capital: Commences operation of 309.28 KWp solar PV plant in Penang. G Capital’s 70%-owned unit Solarcity Malaysia SB had completed the installation and commenced operation of a 309.28 kilowatts peak (KWp) solar photovoltaic (PV) electric power generation system at Muda Holdings Bhd’s plant in Kampung Jawi Sempit in Simpang Ampat, Penang. (The Edge)

Tomei: In joint venture with Alpha Next. Tomei’s wholly owned subsidiary Tomei Retail SB has formed a 75:25 joint JV with Alpha Next SB. The jeweller said Tomei Retail had on Aug 19 entered into a JV agreement with Alpha Next to carry out the business of developing deploying integrating commissioning operating and maintaining an online sales platform application that allows customers to buy gold product online directly from Tomei. (StarBiz)

PMB Tech: 2Q net profit triples to RM11.6m on higher metallic silicon price. PMB Technology’s net profit tripled to RM35.16m for the 2QFY22 from RM11.58m in the same period last year, benefited from higher metallic silicon price. (The Edge)

GDEX: Posts loss for second straight quarter amid stiff competition and softer demand. GDEX posted its second straight quarterly loss in the 2QFY22. It posted a net loss of RM2.72m in 2QFY22, compared to a net profit of RM6.76m a year before, dragged mainly by its loss-making courier services segment. (The Edge)

SunCon: 2Q net profit at RM32m, declares 3 sen dividend. Sunway Construction Group (SunCon), which posted a net profit of RM32.3m in the 2QFY22, has declared a first interim single-tier cash dividend of 3.00 sen per share. (StarBiz)

UOA Development: Q2 net profit down 16.6% to RM45.3m. UOA Development's net profit fell by 16.6% to RM45.30m in the 2QFY22 from RM54.35m recorded last year, mainly due to lower sales from the existing projects. Its revenue also decreased to RM121.11m from RM216.28m previously. (StarBiz)

IPO: SNS Network's IPO oversubscribed by 6.95 times. ACE Market bound SNS Network Technology’s public portion of its initial public offering (IPO) has been oversubscribed by 6.95 times. (StarBiz)

Market Update

The FBM KLCI might open lower today as US stocks slipped for a third successive day on Tuesday, erasing early gains after weaker than expected economic data heightened concerns about the health of the US economy. The S&P 500 closed down 0.2%, having risen as much as 0.5% earlier in the day, while the Nasdaq Composite was flat. Data on home sales and a closely watched survey of activity in the services sector disappointed. Annualised sales of newly built homes fell 12.6% month on month in July, the US Department of Commerce reported. Analysts had anticipated a much smaller drop of 2.5%. The S&P’s service sector purchasing managers’ index, meanwhile, came in at a 27-month low of 44.1 in August, down from 47.3 the previous month. A reading below 50 indicates a reduction in business activity. In Europe, the pan continental Stoxx Europe 600 index fell 0.4% after data showed eurozone business activity contracted in August for the second consecutive month, though businesses reported easing cost pressures.

Back home, Bursa Malaysia pared most of its earlier losses to close off its intraday low on Tuesday, falling 0.3%, after some buying activity emerged for oil and gas and telecommunications stocks during the final hour of trading, a trader said. At the closing bell, the FBM KLCI had declined 4.80 points to end at 1,482.57, compared with Monday’s closing at 1,487.37. Stocks in the region mostly fell, with Japan’s Nikkei 225 down 1.2% and the Hang Seng in Hong Kong down 0.8%. China’s Shanghai Composite slipped less than 0.1%.

Source: PublicInvest Research - 24 Aug 2022

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