PublicInvest Research

PublicInvest Research Headlines - 27 Jan 2023

PublicInvest
Publish date: Fri, 27 Jan 2023, 10:17 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: GDP rose 2.9% in the Q4, more than expected even as recession fears loom. The US economy finished 2022 in solid shape even as questions persist over whether growth will turn negative in the year ahead. Q4 GDP, the sum of all goods and services produced for the Oct to Dec period, rose at a 2.9% annualized pace. Economists surveyed by Dow Jones had expected a reading of 2.8%. Stocks turned mixed following the report while Treasury yields were mostly higher. Consumer spending, which accounts for about 68% of GDP, increased 2.1% for the period, down slightly from 2.3% in the previous period but still positive. Inflation readings moved considerably lower to end the year after hitting 41-year highs in the summer. The personal consumption expenditures price index increased 3.2%, in line with expectations but down sharply from 4.8% in the Q3. (CNBC)

US: Airlines forecast strong 2023 travel, costs may dampen outlook. US airlines expect strong travel demand that drove record Q4 revenues to continue into 2023, but economic uncertainty and burgeoning labor and operations costs could cloud their rosy outlooks. American Airlines, JetBlue Airways Corp and Alaska Air Group forecast better-than-expected full-year earnings. Airlines are cashing in as consumers snap up tickets following a pandemic induced slump, making the industry a rare bright spot as markets grasp with runaway inflation, rising interest rates and economic uncertainty. (Reuters)

US: New home sales increase for third straight month in Dec. New home sales in the US increased for the third straight month in Dec. The report said new home sales surged by 2.3% to an annual rate of 616,000 in Dec after climbing by 0.7% to a downwardly revised rate of 602,000 in Nov. Economists had expected new home sales to tumble by 3.6% to an annual rate of 617,000 from the 640,000 originally reported for the previous month. The monthly increase in new home sales was partly due to strength in the Midwest, where new home sales soared by 35.2% to an annual rate of 73,000. (RTT)

EU: Norway jobless rate rises to 3.4%. Norway's jobless rate increased marginally in Dec and declined in 2022, the labor force survey data from Statistics Norway showed. The jobless rate rose to 3.4% in Dec from 3.3% in Sept. The unemployment rate for Dec indicates the average for Nov to Jan and that for Sept reflects the average for Aug to Oct. The number of unemployed persons rose to 101,000 in Dec from 97,000 in Sept, the agency said. The number of employed persons grew to 2.852m in Dec from 2.848m in Sept. In 2022, the unemployment rate fell to 3.2% from 4.4% in 2021. (RTT)

UK: Car production falls most in over 6 decades despite record EV output. UK car production declined at the fastest pace in 66 years during the year 2022, as global chip shortages and structural changes hampered output coupled with weaker exports, while electrical vehicle production reached a record level. Total car production fell 9.8% to 775,014 units, which was the lowest level since 1956. In 2021, the car production was 859,575 units. UK car and light van output should rise by 15% to 984,000 units in 2023, 842,200 cars and 141,800 light vans, with easing semiconductor shortages. Production volumes are projected to surpass 1m vehicles by 2025. (RTT)

UK: Retail sales volumes fall at faster pace in Jan. UK retail sales volumes dropped at a faster-than-expected pace at the start of the year, and retailers expect them to decline again next month, but at a slightly slower rate. The sales balance decreased to -23 from +11 in Dec. Economists had expected a balance of -5. Around 15% of surveyed retailers are expected to report a drop in sales next month. The survey also found that internet sales volumes shrunk in the year to Jan, but at a significantly slower pace than in Dec. Online sales are expected to grow in Feb, which will be the first month with growth expectations since Dec 2021. (RTT)

Japan: BOJ showed no sign of making a hawkish shift in its Jan meeting. The BoJ emphasized that it wants to maintain its current monetary policy, including leaving its yield curve control unchanged. The yield curve control refers to a policy of the BoJ that’s designed to keep the 10-year yield on JGBs within 0.5ppts of zero. Short-term rates in Japan are negative. The central bank continued its operations to purchase JGBs in response to upward pressure on yields. (CNBC)

Markets

MBSB Bank, CelcomDigi (Neutral, TP: RM3.83): Explore collaboration to develop smart banking solutions. MBSB Bank and CelcomDigi are exploring opportunities in end-to-end smart banking solutions that include comprehensive services for cyber security, smart retail solutions financing, and cloud infrastructure technology. Both companies intend to collaborate on finding new commercial opportunities and joint go-to-market activities that will benefit their customers and employees. (StarBiz)

IHH Healthcare (Outperform, TP:RM7.60): Announces resignation of non-executive director Takeshi Saito. IHH Healthcare has announced the resignation of Takeshi Saito as non executive director with effect from Jan 27. This follows his resignation as MBK Healthcare Management Pte Ltd's nominee director. Singapore-based MBK Healthcare is a wholly owned subsidiary of Mitsui & Co Ltd, which manages the healthcare assets within the Mitsui portfolio. Mitsui is a major shareholder of IHH with a 32.8% stake. (The Edge)

Capital A: Rise in passengers flown exceeds capacity growth in 2022 on resumption of international travel. Capital A carried 24.2m passengers in 2022, a 404% increase from 4.8m carried in the previous year, on the back of post Covid-19 pandemic travel recovery. In its preliminary passenger traffic statistics for the 4Q22 and full year 2022 released on Jan 26, Capital A said the growth in passengers exceeded the jump in capacity of 345% YoY. This resulted in 84% load factor, one percentage point away from achieving pre-Covid load factor. (The Edge)

BCorp: Vincent Tan continues trimming stake. Berjaya Corp (BCorp) founder and major shareholder Tan Sri Vincent Tan Chee Yioun has now trimmed his stake in the diversified group to 19.061%. Tan sold two blocks of shares in a direct business transaction on Jan 25. According to BCorp’s filings, he sold 110.08m shares via Hotel Enterprise SB and another 15.92m shares through B & B Enterprise SB. (The Edge)

MQ Tech: To diversify into property development. MQ Technology (MQ Tech) has proposed to diversify into property development. The group said its wholly-owned unit Star Acres SB is planning to acquire 7.2acres of land in Klebang, development value of RM275m. (The Edge)

Sarawak Cable: Remains in the red with RM11.74m net loss recorded for 2Q. Sarawak Cable posted a net loss of RM11.7m for its 2QFY23 on the back of a RM146.1m revenue. Cumulatively for the first six months of its financial year ending May 31, 2023 (6MFY23), the Practice Note 17 (PN17) company recorded a net loss of RM12.3m and a total revenue of RM325.4m.

SYF Resources: MD Ng Ah Chai pares stake by half to 11.97%. SYF Resources managing director Datuk Seri Ng Ah Chai’s stake in the company was reduced by half to 11.97%, after he disposed of 67m shares and his wife Datin Sri Chee Ah Kuan sold 1.1m shares. The 67m shares were sold off market with no indication of the buyer. Meanwhile, the 1.1m shares were sold on the open market. (The Edge)

Market Update

The FBM KLCI might open higher today as Wall Street equities rose on Thursday after data showed the US economy proved to be more resilient than expected in the final quarter of 2022. The benchmark S&P 500 rose 1.1%, while the tech-heavy Nasdaq Composite gained 1.8%. In Europe, the region-wide Stoxx 600 finished the day 0.4% higher and London’s FTSE 100 added 0.2%. The gains came after the US commerce department said the world’s biggest economy grew at an annualised pace of 2.9% in the final three months of last year. That was above the 2.6% economists had forecast, marking a milder slowdown from 3.2% in the previous quarter. A separate report from the labour department showed claims for first-time jobless benefits fell to 186,000 last week from 192,000 the previous week. The robust data reinforce hopes that the US economy will cool enough to satisfy the Federal Reserve’s goal of slowing inflation, but not so much that it slips into a recession.

Back home, the FBM KLCI settled lower on Thursday despite positive market breadth, in contrast to the regional markets. At the closing bell, the benchmark index closed 1.06 points, or 0.07% lower at 1,498.39, its intraday high. In the region, Hong Kong’s Hang Seng index gained 2.4% and Japan’s Nikkei 225 slipped 0.1%.

Source: PublicInvest Research - 27 Jan 2023

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