PublicInvest Research

PublicInvest Research Headlines - 5 Oct 2022

PublicInvest
Publish date: Wed, 05 Oct 2022, 09:35 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: Job openings drop sharply, labour market starting to loosen. US job openings fell by the most in nearly 2-1/2 years in Aug, suggesting that the labour market was starting to cool as the economy grapples with higher interest rates aimed at dampening demand and taming inflation. Despite the fifth month of decreases in job openings this year reported by the Labour Department in its Job Openings and Labour Turnover Survey, or JOLTS report, vacancies remained above 10m for the 14th straight month. (Reuters)

US: Factory orders unchanged in Aug on drop in aircraft bookings. New orders for US-manufactured goods were unchanged in Aug amid a drop in demand for transportation equipment, but solid gains elsewhere pointed to underlying strength in manufacturing. Orders increased 13.2% on a YoY basis in Aug. The report followed on the heels of a survey from the Institute for Supply Management showing its manufacturing activity gauge fell to its lowest level in nearly 2-1/2 years in Sept, with measures of new orders and employment contracting. Demand for goods is slowing amid higher interest rates and the rotation of spending back to services. (Reuters)

EU: PPI inflation hits new record high. Eurozone producer price inflation accelerated more-than-expected to a fresh record high in Aug amid soaring energy prices, data released by Eurostat. Producer prices climbed 43.3% YoY in Aug, faster than the revised 38.0% rise in July. That was just above the 43.1% increase expected by economists. A jump in energy prices of 116.8% was largely responsible for the acceleration of inflation in Aug. Excluding energy, producer price inflation eased slightly to 14.5% from 15.1%. (RTT)

EU: Industrial production falls for second month. Latvia's industrial production declined for the second successive month in Aug due to a contraction in manufacturing output, data from the Central Statistical Bureau. Industrial production dropped a calendar adjusted 0.3% YoY in Aug, well below the 2.9% fall in July. Manufacturing output registered a decrease of 2.6% annually in Aug, while mining and quarrying production advanced 6.2%. Production in the electricity and gas supply segment logged a sharp annual growth of 20.2%. On a monthly basis, industrial production rose a seasonally adjusted 0.6% in Aug, reversing a 1.2% fall seen a month ago. (RTT)

UK: Mortgage mayhem sparks fears of a housing market crash in Britain. There are growing fears of a housing market crash in the UK, after a swathe of tax cuts announced by the government sent interest rate expectations soaring, driving up lending rates for homebuyers. Finance Minister Kwasi Kwarteng’s so-called mini budget on Sept 23 spooked markets with GBP45bn (USD50.5bn) of debt-funded tax cuts, triggering a massive spike in government bond yields. These are used by mortgage providers to price fixed rate mortgages. (CNBC)

Indonesia: Indonesia set for smaller rate hikes as inflation fear contained. Indonesia’s central bank could settle for quarter-point moves at its upcoming policy rate meetings after Sept inflation came in lower than estimates despite the fuel price hike. The impact of higher gasoline prices is more subdued than expected, while food costs have likely peaked with the onset of the harvest season. The bank trimmed its forecast for Indonesia’s 2022 average inflation to 4.5% from 5.2%. (Bloomberg)

South Korea: Annual consumer inflation softens for second month in Sept. South Korea's annual consumer inflation came in below expectations and further softened in Sept, government data showed. The consumer price index (CPI) rose 5.6% in Sept from the same month a year ago, according to the Statistics Korea data, after a 5.7% rise in Aug, when the annual rate fell for the first time in seven months. It was the slowest rate in four months and slightly below economists' forecasts of the rate remaining flat at 5.7%. (Reuters)

Markets

Econpile: Wins RM24.6m contract from Berjaya Construction. Econpile Holdings has secured a contract worth RM24.6m from Berjaya Construction to undertake the execution and completion of sub-structure work in Kuala Lumpur. The project would entail piling, pile cap, contiguous bored piling, basements, ground floor and associated works for a proposed block of 41-storey service suites at Jalan Imbi, Kuala Lumpur. The project shall be completed within 13 months from Oct 6, 2022. (StarBiz)

LYC: Completes acquisition of aesthetic & beauty, dental clinics. LYC Healthcare has completed the acquisitions of a medical aesthetic clinic, a beauty and wellness centre and three dental clinics under the KL Dental brand. LYC now has a 100% stake in Tao Global Ventures SB, which was acquired for RM4m. Tao Global owns and operates a medical aesthetic clinic and beauty and wellness centre located in Bandar Sri Damansara known as Dr D Clinic and iBody by Dr D. Meanwhile, the 3 KL dental clinics were purchased for a total of RM3.2m. (StarBiz)

Microlink Solutions: Secures project from Huawei in Bahrain. Microlink Solutions is strengthening its presence in the Middle East with a landmark project secured from Huawei in the Kingdom of Bahrain. The project involves management of the IT operations on behalf of a leading regional telecommunications service provider. Microlink has established a dedicated project office in Manama, Bahrain, ensuring a full-time local presence on the ground. (BTimes)

Equitiestracker: Unit gets fund management licence. Equitiestracker Holdings has been granted a capital markets services licence (CMSL) by the Securities Commission Malaysia, which allows the company to undertake fund management activities. However, the company must satisfy several conditions including appointing a licensed director, 2 licensed representatives, 1 compliance officer and increase its paid-up capital and shareholders’ funds to a minimum of RM2m within 6 months. (The Edge)

Majuperak: Inks MOU to develop 857.75 acres of land in Perak into strategic assets. Majuperak Holdings (MHB) proposed to collaborate with its shareholder Perbadanan Kemajuan Negeri Perak (PKNPk) to jointly develop assets on several land banks measuring 857.75 acres in Perak. MHB has entered into a MoU with PKNPk to jointly develop the latter’s lands in Seri Iskandar, Bidor and Tronoh for residential property projects. (The Edge)

Dolomite Corp: High Court orders winding-up of. Dolomite Corp has been ordered by the High Court to wind up due to its failure to repay USD38.19m (RM177.38m) of debt. This follows a lawsuit filed by Maybank International Labuan Branch as far back as Sep 2020, which then saw the court giving Dolomite until Oct 4 to settle the outstanding amount as well as the costs awarded by the court due to Maybank, or be wound up. Dolomite slipped into PN17 status in May last year. (The Edge)

Market Update

The FBM KLCI might open higher today after US stocks rose more than 2% for a second straight session, with weak economic data helping ease some worries about the pace of additional interest rate increases from the Federal Reserve. The S&P 500 index added 3.1% on Tuesday, having closed 2.6% higher on Monday. The technology-heavy Nasdaq Composite rose 3.3%. The cumulative 5.7% gain this week marks the S&P 500’s biggest two-day rally since March 2020. The rally comes after three straight quarters of declines for the S&P 500 — the longest quarterly losing streak since 2008 — as the Fed has led the charge on raising interest rates aggressively to curb stubbornly high inflation. Higher borrowing costs and fears of the central bank inducing a recession with tighter monetary policy have weighed heavily on share prices. Employment data from the Bureau of Labor Statistics also provided some encouragement to investors on Tuesday that the Fed might slow its interest rate rises. The number of job openings in the US dropped in August to 10.1m, below economists’ expectations of 10.8m and the previous figure of 11.2m. Across the Atlantic, Europe’s regional Stoxx 600 closed up more than 3%.

Back home, Bursa Malaysia extended Monday's gains to close higher on Tuesday, bolstered by the improving global sentiment and bargain-hunting activities in selected heavyweight stocks. At the closing bell, the benchmark index advanced 11.74 points to end at 1,409.36 from Monday’s close of 1,397.62. Elsewhere, most indices also rose with the MSCI World index added 3.3%.

Source: PublicInvest Research - 5 Oct 2022

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