PublicInvest Research

PublicInvest Research Headlines - 26 Jan 2023

PublicInvest
Publish date: Thu, 26 Jan 2023, 10:00 AM
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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: Worker shortage denting Freeport-McMoRan's copper output. Freeport-McMoRan Inc warned on that its struggle to find workers in the US is limiting the amount of copper it can produce for the green energy transition. The worker shortage reflects the talent crunch facing the broader mining industry, as well as the wider macroeconomic trend of workers jumping between jobs in the wake of the coronavirus pandemic. Freeport, which operates seven mines in the US, including North America's largest mine, has 1,300 job openings in the country, more than 10% of its US workforce. (Reuters)

US: GDP report could show solid fourth-quarter growth but still signal a recession is coming. Economic growth is expected to have slowed slightly in the 4Q but was still solid, driven by a strong consumer. Economists will be studying Thursday’s report on US GDP carefully for signs of how strong or weak the consumer actually was at the end of 2022. Retail sales suggest spending fell off sharply as the year came to an end. According to Dow Jones, economists expect that US GDP grew by 2.8% in the 4Q, down from the 3.2% pace in the 3Q. While economists see a strong 4Q, they are divided on where the economy goes from here and a key is the consumer. (CNBC)

EU: Poland jobless rate rises slightly to 5.2%. Poland's unemployment rate increased marginally in Dec after remaining stable in the previous two months. The unemployment rate rose to 5.2% in Dec from 5.1% in Nov. In the corresponding month last year, the jobless rate was 5.8%. The number of newly registered unemployed persons fell to 113,000 in Dec from 114,300 in the previous month. The number of youth unemployed, which is applied to those below the 24 age group, was 100,400 in Dec, unchanged from the previous month. (RTT)

EU: German business confidence at 7-month high on stronger expectations. Germany's business confidence improved further as expected at the start of the year to the strongest level in seven months, as companies were considerably less pessimistic about the future, although they were slightly less satisfied with the current situation. The ifo business confidence index rose to 90.2 in Jan from 88.6 in Dec. That was in line with economists' forecasts. The index has been rising since Oct and the latest score was the highest since June last year, when it was 92.3. Thus, the German economy started the new year with more confidence amid a less pessimistic production outlook, but companies were somewhat less satisfied with their current situation. (RTT)

UK: Factory gate inflation eases for fifth month. UK output price inflation slowed for the fifth successive month in Dec, soothing fears of high inflation, and provided more justification to the BoE for softening its tightening policy stance. Output price inflation unexpectedly slowed to 14.7% from 16.2% a month ago. However, economists had forecast prices to gain at a faster pace of 16.4%. Despite the slowdown, PPI remained high. Petroleum product prices provided the largest downward contribution, while food products contributed the most to lift prices. Similarly, input price inflation slowed for the sixth straight month. Inflation moderated to 16.5% in Dec from 18.0% in Nov. (RTT)

Japan: BOJ’s bond purchases lead to some being thrown out of key index. The BoJ is facing a fresh headache in the dysfunctional local bond market that it has become so illiquid that some securities are being kicked out of an important global index. JGBs expiring in March 2032 and March 2024 are among the issues that have been booted out of the World Government Bond Index, according to FTSE Russell, the index compiler. The Sept 2032 and June 2032 tenors will follow suit next month. (Bloomberg)

Singapore: Inflation at 7-month low on weaker transport costs. Singapore CPI eased at the end of the year to the lowest level in seven months, largely due to a moderation in private transport costs, while core price growth remained steady. The CPI climbed 6.5% YoY in Dec, slower than Nov's 6.7% stable rate of increase. Further, the latest inflation rate was the weakest since May 2022, when prices had risen 5.6%. At the same time, MAS core inflation held steady for the second straight month at 5.1%, as softer rises in retail and other goods as well as electricity and gas were offset by higher prices for food and services. CPI rose 0.6% MoM, and overall consumer prices moved up 0.2%. (RTT)

Markets

TM (Outperform, TP: RM6.63): Explores partnership with ZTE Malaysia on optical network research. Telekom Malaysia (TM) innovation arm is exploring a collaboration with ZTE (Malaysia) Corp SB on optical network research to bring 50Gbps bandwidth to Malaysia. The telco said Telekom Research & Development SB and ZTE will jointly explore the capabilities of next-generation passive optical network (PON) access technology, 50GPON, to support various application scenarios. (StarBiz)

Yinson: Gets contract extension for Agogo FPSO project in Angola. Yinson Holdings said the contract for the operation of a floating, production and storage and offloading (FPSO) asset for the Agogo Integrated West Hub development project in Angola has been extended up to Feb 20. The group's indirect wholly-owned unit Yinson Azalea Production Pte Ltd (YAPPL) has inked an agreement with Eni Angola SpA for the extension. The initial 60-day agreement, with an aggregate value of USD218m (RM956m), was signed on Dec 2, 2022 to commence preliminary works. (The Edge)

T7 Global: Secures two projects worth RM100m. T7 Global has bagged two projects with a combined value of about RM100m under its energy division for recruitment and manpower as well as offshore construction services. The energy solutions provider said the first award was from the PTTEP Group for the provision of headhunting and recruitment services. The second award was from Hibiscus Oil & Gas Malaysia Ltd for the provision of facilities decommissioning services for the South Angsi Alpha platform off the east coast of Peninsular Malaysia. (StarBiz)

Duopharma: Unit receives another contract extension from Pharmaniaga. Duopharma Biotech has received another contract extension for the supply of pharmaceutical and non-pharmaceutical products to hospitals and clinics. The group said it received a letter from Pharmaniaga Logistics SB (PLSB), a unit of Pharmaniaga, saying the contract term of the supply agreements had been extended to June 30, 2023. (The Edge)

PLS Plantations: To place up to 56m shares to meet public shareholding spread. PLS Plantations has proposed a placement of up to 56.2m new shares at 95 sen per share to meet its public shareholding spread, and to part-fund its future plantation business expansion in Pahang. PLS said it has concurrently entered into five separate agreements with parties who will subscribe to a total of 25m shares in the group, valued at RM23.8m. (The Edge)

TDC: Set on growing core business. TIME Dotcom (TDC), which disposed of its stake in data centre (DC) business AIMS Group for RM2bn, is now focused on growing its core business, including capturing retail and DC opportunities. The divestment of its stake in AIMS Group is part of TDC’s strategic partnership with Digital Bridge Group Inc to accelerate the expansion of AIMS across Asia. The rationale of the divestment came after a strategic review of its DC business in late-2021, which revealed that there were significant opportunities in underserved markets across Asia. (StarBiz)

Atlan: Unit files police report over scam using its name and logo. Atlan Holdings' subsidiary, Duty Free International Ltd (DFIL), has lodged a police report after discovering that an organisation or individuals based in Ghana are passing off as DFIL and running a scam. (The Edge)

Market Update

US markets finished the overnight session mixed again as corporate earnings reporting continued to roll on. Microsoft provided lacklustre forward guidance while Boeing missed expectations on both revenue and profitability. The Dow Jones Industrial Average inched 0.03% higher though the S&P 500 slipped a fractional 0.02%. The tech-heavy Nasdaq Composite fell 0.2% meanwhile. After-hours, Tesla reported record revenues and stronger-than expected profits. European markets were mostly lower despite better German business sentiment and positive manufacturing and services PMI numbers. The Munich-based Ifo Institute says a measure is showing “considerably less pessimistic expectations” in January. UK’s FTSE 100 fell 0.2% as Germany’s DAX and France’s CAC 40 both slipped 0.1%. With markets in China and Hong Kong remaining closed for the Lunar New Year holidays, overnight focus in Asia was on Japan, South Korea and Australia. The Nikkei 225 and KOSPI gained 0.4% and 1.4% respectively, though the ASX 200 fell 0.3% after the country’s inflation hit a 32-year high.

Source: PublicInvest Research - 26 Jan 2023

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