PublicInvest Research

PublicInvest Research Headlines - 28 Feb 2024

PublicInvest
Publish date: Wed, 28 Feb 2024, 11:20 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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HEADLINES

Economy

US: Consumer confidence unexpectedly deteriorates in Feb. Reflecting persistent uncertainty about the US economy, there is an unexpected deterioration in US consumer confidence in the month of Feb. The consumer confidence index slid to 106.7 in Feb from a downwardly revised 110.9 in Jan. The decrease surprised economists, who had expected the consumer confidence index to inch up to 115.0 from the 114.8 originally reported for the previous month. The drop in confidence was broad-based, affecting all income groups except households earning less than USD15,000 and those earning more than USD125,000. Confidence deteriorated for consumers under the age of 35 and those 55 and over, whereas it improved slightly for those aged 35 to 54. (RTT)

US: Durable goods orders plunge more than expected in Jan. New orders for US manufactured durable goods saw a substantial decrease in the month of Jan. The durable goods orders dove by 6.1% in Jan after falling by a revised 0.3% in Dec. Economists had expected durable goods orders to tumble by 4.5% compared to the unchanged reading that had been reported for the previous month. The steep drop in durable goods orders largely reflected a nosedive by orders for transportation equipment, which plunged by 16.2% in Jan after sliding by 0.6% in Dec. Orders for non-defense aircraft and parts led the way lower, plummeting by 58.9% in Jan after jumping by 1.0% in Dec. (RTT)

EU: Eurozone lending to households logs weakest growth since 2015. Lending to the euro area households grew at the slowest pace since 2015 and broad money supply posted a marginal growth in Jan. Adjusted loans to households registered an annual increase of 0.3%, which was slower than the 0.4% rise in Dec. This was the weakest growth since early 2015. Likewise, annual growth in loans to non-financial corporations softened to 0.2% from 0.5%, data showed. Lending increased for the second straight month. Loans to the overall private sector grew 0.4% but it was slightly slower than Dec's 0.5% gain. Credit to euro area residents dropped 0.4%, following a 0.5% fall a month ago. Credit to the private sector logged a steady growth of 0.4% in Jan. (RTT)

EU: German consumer sentiment logs moderate rise. Despite a sharp increase in income expectations, the recovery in German consumer confidence is rather moderate due to strong intentions to save rather than spend. The forward-looking consumer sentiment index rose to -29.0 in March from revised -29.6 in Feb. The score matched economists' expectations. A rapid recovery in consumer activity is not expected. The propensity to save had a dampening effect on the consumer climate. The outlook for the German economy has become increasingly pessimistic. Moreover, the government cut its growth projection for this year to just 0.2%. Consumers will be willing to make larger purchases only when inflation comes under control and they regain confidence in the economy. (RTT)

UK: Shop price inflation softens to near 2-year low. UK shop price inflation weakened to a near two-year low in Feb. The shop price index posted an annual increase of 2.5% on a yearly basis in Feb, slower than the 2.9% rise in Jan. This was the lowest since March 2022. The rate was also below the 3-month average of 3.3%. Data showed that non-food inflation held steady at 1.3%, the weakest since Jan 2022. At the same time, food inflation decelerated to 5.0% from 6.1% a month ago. The rate hit the weakest since May 2022. Likewise, fresh food prices gained at a slower pace of 3.4% after a 4.9% rise. (RTT)

Japan: Overall inflation climbs 2.2% on year in Jan. Overall consumer prices in Japan were up 2.2% on year in Jan. That was in line with forecasts and down from 2.6% in Dec. On a seasonally adjusted monthly basis, inflation rose 0.1% - matching expectations and unchanged from the Dec reading. Core consumer prices, which exclude the volatile costs of food, were up 2.0% on year. That exceeded expectations for an increase of 1.9% and was down from 2.3% in the previous month. (RTT)

Taiwan: Export orders rebound 1.9%. Taiwan's export orders increased unexpectedly in Jan after falling sharply in the previous month. Export orders rose 1.9% YoY in Jan, reversing a 16.0% plunge in Dec, which was the fastest fall in five months. Meanwhile, orders were expected to decrease by 3.6%. Orders for basic metals and related articles alone grew the most by 26.2%, followed by plastic, rubber, and related products, which rose by 25.5%. Foreign orders for electronic products surged 16.0%, while those for information and communications products declined sharply by 19.3%. (RTT)

Hong Kong: Trade balance swings to surplus on exports surge. Hong Kong's trade balance turned to a surplus in Jan from a deficit in the previous year as exports grew more rapidly than imports. The visible trade balance showed a surplus of HKD3.6bn in Jan versus a deficit of HKD25.4bn in the same month last year. In Dec, the shortfall was HKD59.9bn. The visible trade surplus of HKD3.6bn was equivalent to 0.9% of the value of imports. The annual rise in exports was 33.6% in Jan, following an 11.0% gain in Dec. Total exports to Asia as a whole rose by 45.7%. (RTT)

Markets

Sapura Energy: Kitar Solutions to simplify decommissioning process. Sapura Energy has announced Kitar Solutions, which aims to simplify the decommissioning process through integrated engineering, preparations, removal and disposal services. The group said Kitar Solutions is the result of a strategic partnership with AF Offshore Decom, a well-established Norwegian company specialising in customised decommissioning solutions in the North Sea. (StarBiz)

Managepay: Receives approval to operate online money lending business. E-payment solutions provider Managepay Systems (MPay) said its subsidiary has received approval from the Housing and Local Government Ministry to operate an online money lending business. The letter of approval confirmed that MPay's wholly owned unit ManagePay Resources SB (MRSB) has fulfilled the conditions as specified in an earlier letter of conditional approval. (The Edge)

Padini: 2Q net profit declines to RM53.1m. Padini Holdings' net profit for the 2QFY24 fell 27.4% to RM53.1m from RM73.1m recorded in the same period a year ago, due to a drop in the gross profit margin. Revenue slipped 1.8% to RM500.1m from RM509.5m previously, following a decline in topline sales. On prospects, Padini said the retail business remains challenging due to the deterioration in purchasing power arising potentially from the rising cost, trade tensions and rising inflation and interest rates. (StarBiz)

MISC: 4Q profit dips on lower offshore contribution. The lower earnings for 4Q23 were mainly due to reduced profit in the offshore business segment from lower construction progress from the FPSO conversion and additional cost provisions recognised in the current quarter while the decrease in the gas assets and solutions segment’s operating profit was due to higher vessel operating costs in the current quarter. (StarBiz)

Leong Hup: Posts record earnings for 2023 despite lower 4Q profit. Poultry, egg and livestock feed producer Leong Hup International posted record earnings and revenue in 2023 on the back of improved profits in the feedmill segment, driven by higher average selling prices and reduced raw material costs across Vietnam, Indonesia, and the Philippines. (The Edge)

Tropicana: Halves its losses in 4Q as revenue climbs and expenses drop. Tropicana Corp managed to halve its net loss for its 4Q on a YoY basis, as it recorded lower expenses, and higher revenue and other income. The group reported a net loss of RM158.9m for the 4QFY23, down 49.5% from the RM314.4m net loss it incurred in 4QFY22, as revenue more than doubled to RM390.5m from RM186.2m on higher progress billings across its key projects in the Klang Valley and southern and northern regions. (The Edge)

Keck Seng: 4Q profit more than doubles, lifted by impairment reversal and lower cost of sales. Keck Seng (M)’s net profit more than doubled for the 4QFY23 from the preceding quarter, despite lower revenue, due largely to a reversal of impairment loss recognised on an overseas hotel, lower cost of sales, and lower foreign currency translation losses. Net profit for 4QFY23 jumped to RM94.5m from RM42.3m in 3QFY23. Quarterly revenue was down 7.9% to RM344.8m from RM374.4m. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after a global equities index advanced slightly yesterday as investors weighed the outlook for central bank rate cuts after the latest batch of economic data and ahead of a key US inflation reading due tomorrow, while the dollar fell against the yen. Oil prices rose after reports that producer group Opec+ was considering extending voluntary oil output cuts into the second quarter to provide additional support. In equities, the Dow Jones Industrial Average fell 96.82 points, or 0.25%, to 38,972.41, the S&P 500 gained 8.65 points, or 0.17%, to 5,078.18 and the Nasdaq Composite gained 59.05 points, or 0.37%, to 16,035.30. MSCI’s gauge of stocks across the globe rose 1.43 points, or 0.19%, to 760.60. Europe's benchmark stock index inched up on Tuesday, with Germany's DAX hitting a record high, while investors awaited this week's inflation data that could shed some light on when interest rate cuts might commence this year. The panEuropean STOXX 600 closed 0.2% higher, boosted by a 1.7% jump in basic resources, recovering from Monday's four-month low tracking higher metal prices. Germany's benchmark DAX advanced 0.8%, outperforming its regional peers, gaining 4.8% so far in 2024. The STOXX 600 has risen nearly 4% so far this year, after a near 13% jump in 2023 on growing bets of imminent rate cuts.

Back home, Bursa Malaysia’s benchmark index continued its upward trajectory on Tuesday to end at its highest level since May 2022 on strong buying activities in heavyweights led by YTL Corp Bhd, Axiata Group Bhd and YTL Power International Bhd. At the closing, the FBM KLCI surged 11.2 points to 1,558.8 from Monday’s close of 1,547.6. In the region, Nikkei 225 ended flat while the Hang Seng Index was up almost 1%

Source: PublicInvest Research - 28 Feb 2024

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