PublicInvest Research

PublicInvest Research Headlines - 25 Oct 2022

PublicInvest
Publish date: Tue, 25 Oct 2022, 03:06 PM
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: Pending home sales slump more than expected in Aug. US business activity contracted in Oct for a fourth-straight month as concerns about inflation and sluggish demand weighed on the outlook. The S&P Global flash composite purchasing managers output index decreased 2.2 pts to 47.3. Manufacturers and services providers’ views on the outlook also deteriorated in Oct, leading the composite future index to fall to its lowest level since Sep 2020. A measure of business activity at service providers slid to 46.6 in the month, marking the second-worst reading since May 2020. (Bloomberg)

EU: Eurozone private sector slips into deep downturn. The euro area private activity slipped into a deep downturn in Oct as both manufacturing and services sectors contracted at faster rates. The S&P Global composite output index fell to a 23-month low of 47.1 in Oct from 48.1 in the previous month. The reading was also below economists' forecast of 47.5. The index has remained below 50.0 level for the fourth straight month suggesting contraction. (RTT)

UK: Private sector downturn worsens on weak services activity. The UK's private sector economy contracted notably in Oct, largely led by the deterioration in the services sector, flash survey data from S&P Global showed. The PMI dropped to a twenty one-month low of 47.2 from 49.1 in Sep. The reading was forecasted to fall moderately to 48.1. The services PMI fell to 47.5 from 50.0 in Sep, marking the fastest decline since Jan 2021. Economists had forecast a modest fall to 49.6. The latest reading was the weakest in 29 months. (RTT)

Taiwan: Industrial production drops in Sep. Taiwan's industrial production dropped in Sep, mainly due to the decline in manufacturing output, while retail sales growth slowed during the month. Industrial production decreased 4.8% YoY in Sep, after a revised 3.26% increase in Aug. The manufacturing output fell 4.83% in Sep, after a 3.44% growth in the prior month. Electricity and gas supply output fell 4.93%, while the mining and quarrying production grew 5.88%. (RTT)

China: Q3 GDP growth tops expectations. China's economic growth accelerated in the third quarter after the relaxation of COVID restrictions, but other economic indicators signalled a mixed picture. Gross domestic product logged an annual growth of 3.9% in the third quarter, faster than the 0.4% expansion seen in the second quarter. (RTT)

Japan: Manufacturing PMI slows to 50.7 in Oct. The manufacturing sector in Japan continued to expand in Oct, albeit at a slower pace with a manufacturing PMI score of 50.7. That's down from 50.8 in Sep, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. For the fourth month running both output and new orders declined, albeit at softer paces than in Sep. Meanwhile, cost pressures across the manufacturing sector remained elevated, while the rate of output price inflation accelerated to a fresh survey peak. (RTT)

Markets

CIMB (Outperform, TP: RM6.00): CIMB Thai net profit jumps 64.6% to THB2.8bn for 9M22. CIMB Thai Bank PCL posted a net profit of THB 2.8bn, an increase of 64.6% YoY compared to 9M2021. “The improvement was mainly attributed to a 3.9% decline in operating expenses from improved cost control and a 45.5% decrease in expected credit losses due to lower impairments of assets, despite a 0.4% drop in operating income,” president and CEO Paul Wong Chee Kin said in a statement. On a YoY basis, operating income declined by THB 38.1m or 0.4% to THB10,709.4m. (StarBiz)

TNB (Outperform, TP: RM12.42): Secures LOI to develop 2,100 MW power plant in Kapar. Tenaga Nasional (TNB) announced that it has received a letter of intent (LOI) for the development of a 2,100 megawatt (MW) combined cycle power plant in Kapar. The LOI was awarded by the Ministry of Energy and Natural Resources to TNB’s wholly-owned unit TNB Power Generation SB (TPGSB), said TNB without disclosing the amount of the project. The greenfield project will be constructed on TPGSB’s own land, located to the north of the existing Sultan Salahuddin Abdul Aziz power station, the utility giant said. (The Edge)

Ranhill Utilities: Bags RM12m job to expand water treatment plant capacity. Ranhill Utilities won a RM11.9m job to expand the capacity of a water treatment plant at Lok Heng in Kota Tinggi, Johor by an additional four million litres per day. The six-month contract was awarded by Ranhill Utilities' 80%-owned subsidiary Ranhill SAJ SB, with the remaining 20% stake owned by The State Secretary Johore (Inc). Ranhill SAJ is an integrated water operator in Johor and is principally involved in the abstraction of raw water, treatment of water, distribution, and sale of treated water to consumers. (The Edge)

Tanco: To raise RM48m via private placement. Tanco Holdings plans to raise up to RM47.7m via a private placement for repayment of bank borrowings and investments in complementary businesses. The exercise will see up to 176.7m shares or 10% of the group's total issued shares to independent third party investors, issued at a price to be determined later, said the loss making firm in a filing with Bursa Malaysia. (The Edge)

Harn Len: Proposes eight-for-five bonus issue. Harn Len Corp (HLCB) has proposed a bonus issue of 411.2m new shares on the basis of eight bonus shares for every five shares held. The plantation group said the proposed bonus issue was to reward existing shareholders for their loyalty and continued support to HLCB and its subsidiaries. “The board had taken into consideration that the proposed bonus issue of shares will enable shareholders to increase the number of shares held with no cash outlay required while retaining their percentage of equity interest held. (StarBiz)

Stella: Gets takeover offer at 95 sen per share in cash. Stella Holdings said the diversified company received a notice of unconditional mandatory takeover offer at 95 sen a share from joint offerors Varia Engineering & Services SB, Datuk Lau Beng Wei and Datuk Lau Beng Sin, who collectively intend to acquire the remaining Stella shares not owned by them. The takeover offer comes after the joint offerors entered into an unconditional share sale and purchase agreement with a group of shareholders to acquire a total of 34.7m shares in Stella, representing a 51.73% stake. (The Edge)

MARKET UPDATE

It was a good day for Western markets overnight, with the key US benchmarks leading with gains of near-1%, or more. Stronger-thanexpected earnings, especially those of major technology-based companies, have been major drivers of recent market optimism though concerns over foreign exchange headwinds and other growth concerns remain. The coming week will be eventful, with earnings reports of corporate giants UPS, General Electric, CocaCola and General Motors due out, and economic data like S&P/Case-Shiller August home prices and October consumer confidence numbers due for release. On the day, the Dow Jones Industrial Average and S&P 500 gained 1.3% and 1.2% respectively while the Nasdaq Composite was 0.9% higher. European markets were also higher with the UK remaining in the limelight. For Finance Minister Rishi Sunak has been named as the replacement for Liz Truss as the country’s Prime Minister. Continent-wide, the utilities, construction, retail and media stocks all added more than 2%. Italy’s FTSE MIB led amongst major markets with a 1.9% gain. Germany’s DAX and France’s CAC 40 were both 1.6% higher as UK’s FTSE 100 rose 0.6%. Hong Kong and China were major losers in Asia on concerns over President Xi Jinping’s tightening grip on the latter following the annual Party Congress, and its implication on technology companies there. The Hang Seng Index slumped 6.4% while the Shanghai Composite Index fell 2.0%. Markets fared slightly better elsewhere however, with Japan’s Nikkei 225 inching 0.3% higher though the Yen continued to weaken even amid reported intervention by the country’s central bank. Markets in India, Singapore and Malaysia were closed for a holiday.

Source: PublicInvest Research - 25 Oct 2022

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