2015年2月6日星期五

PublicInvest Research Headlines - 6 Feb 2015


Author: PublicInvest   |   Publish date: Fri, 6 Feb 2015, 09:03 AM

Economy

US: Consumer comfort declines from highest level since 2007. Consumer confidence declined last week from the highest level in more than seven years as Americans’ attitudes about their finances ebbed with the stock market. While the Bloomberg weekly index of consumer comfort fell to 45.5 in the period ended Feb 1 from 47.3, it was still the second-best reading since July 2007. Measures of the buying climate and views of the economy also lost ground, the figures showed. (Bloomberg)
US: Trade gap jumps as Americans buy imported cars, oil. The trade deficit in the US swelled in Dec to the biggest in two years as a strengthening dollar propelled a surge in imports. The gap jumped 17.1% to USD46.6bn, the widest since Nov 2012, from a revised USD39.8bn in Nov, according to Commerce Department data issued. Other reports showed fewer Americans than forecast filed claims for jobless benefits last week and worker productivity ebbed in the fourth quarter. (Bloomberg)
US: Fewer Americans than forecast filed jobless claims last week. Fewer Americans than forecast filed jobless claims last week, hovering around levels that are typically associated with an improving job market. Applications for unemployment benefits increased by 11,000 to 278,000 in the week ended Jan 31, from a revised 267,000 in the prior period, a Labor Department report showed. The median forecast of 50 economists surveyed by Bloomberg called for a rise to 290,000. (Bloomberg)
US: Fed pressed on leak probe as lawmakers seek greater transparency. Two Democratic lawmakers pressed the Federal Reserve for details of an internal probe into a leak of confidential, market-sensitive information in 2012, in the latest political push for more transparency from the Fed. Massachusetts Senator Elizabeth Warren and Representative Elijah Cummings of Maryland are seeking information on a leak from the minutes of a Federal Open Market Committee that was reported by Bloomberg News on Dec 1. The letter follows other steps by lawmakers of both parties to raise pressure on the Fed for more accountability. Republican Senator Rand Paul of Kentucky last month re-introduced legislation proposing to audit monetary policy, prompting concern at the Fed that its independence is at risk. (Bloomberg)
EU: Greek leaders return home for rethink after rebuff from Germany. Prime Minister Alexis Tsipras is preparing to set out the most detailed account yet of his plans to revive the Greek economy after a diplomatic push ended with a rebuff from Germany and a warning shot from the European Central Bank. Tsipras, 40, was greeted by the rare sight of a pro-government demonstration in downtown Athens after he vowed to stick to his anti-bailout campaign pledges, despite their rejection by German Finance Minister Wolfgang Schaeuble. The prime minister will lay out his policy plans on Sunday, in the opening speech of the three-day-long parliamentary debate leading up to a confidence vote to confirm his government. (Bloomberg)
EU: ECB said to allow Greek banks EUR59.5bn emergency cash. The European Central Bank will allow the Greek central bank to provide as much as EUR59.5bn (USD68.0bn) in emergency funding for the country’s lenders, a euro-area central-bank official familiar with the decision said. The measure is needed after the ECB shut off a key avenue for Greek banks’ funding, citing doubts that the country’s newly elected government will conclude its aid program. Greek stocks and bonds fell on Thursday after the ECB’s decision to end a waiver on the quality of Greek debt it accepts as collateral. (Bloomberg)
China: Lew says China currency policy improved while Japan playing fair. China has made progress letting the yuan appreciate and Japan’s policies resulting in a weaker yen don’t qualify as “unfair,” Treasury Secretary Jacob J. Lew told lawmakers concerned that the nations manipulate their currencies. The US will push back against countries that manage their exchange rates for a trade advantage, Lew said to the Senate Finance Committee. Finance ministers from the world’s leading industrial and emerging economies meet next week in Istanbul, with the dollar rising against currencies from Europe to Asia. (Bloomberg)
Japan: Abe widens wealth gap with higher prices, less money for poor. With Prime Minister Shinzo Abe trimming benefits for the poor as he increases spending on the military and cuts corporate taxes, it may not be for long. Since Abe took office two years ago, aggressive monetary easing devalued the yen, bolstering earnings at big companies and lifting the stock market 70%. It’s been good for exporters and those who own shares and property, but not so good for those without assets. For them, Abenomics means higher prices and dwindling government support. (Bloomberg)
India: Modi looks to avoid first poll setback in threat to India revamp. Eight months ago, Delhi voters helped propel Indian Prime Minister Narendra Modi to national power. Now they may give him his first setback at the ballot box since he took office last May. Opinion polls show Modi’s Bharatiya Janata Party in a tight race with an anticorruption party that it topped by three seats in the last Delhi election in Dec 2013. A loss when votes are counted on Feb 10 may prompt him to hold back on unpopular economic policy changes when his government unveils its first full-year budget later this month. (Bloomberg)

Markets

LPI Capital: Proposes 1-for-2 bonus issue. LPI Capital’s proposed bonus issue of 110.7m shares has been approved by Bursa Malaysia, subject to conditions. The bonus shares are on the basis of one bonus share for every two existing LPI shares held on an entitlement date to be determined later. (StarBiz)
MMC Corp: Malakoff gets SC nod for relisting. MMC Corp said its 51%-owned unit Malakoff Corp has received the SC’s approval to be relisted on the Main Market of Bursa Malaysia. Following the proposed listing, MMC’s stake in Malakoff would be reduced to 49%, assuming the over-allotted shares are fully subscribed to by nonbumiputra Malaysian, foreign institutional and selected investors. (StarBiz)
YNH Property: Hilton to manage hotel at Menara YNH. YNH Property has appointed Hilton Worldwide Manage Ltd to manage its proposed hotel, to be branded "Hilton Kuala Lumpur City Centre & Residences" in Menara YNH in Kuala Lumpur. The company said it had entered into a MOU with Hilton Worldwide on Feb 4, 2015. (SunBiz)
MEGB: To sell properties for RM79.7m. Masterskill Education Group’s (MEGB) wholly-owned subsidiary Masterskill (M) SB (MMSB), which is seeing the entry of new shareholders, is disposing of its property assets here and in Masai, Johor to a private company controlled by outgoing major shareholder Siva Kumar M. Jeyapalan for RM79.7m. (StarBiz)
Fututech: Said to acquire construction firm for RM400m. Construction company Fututech is acquiring a private construction company belonging to its executive chairman Tee Eng Ho for close to RM400m, which will result in Fututech garnering a RM2bn order book from that private company. The acquisition comes with a profit guarantee of close to RM150m for three years. (StarBiz)
7-Eleven: Malaysia stores to have energy-efficient lighting. 7- Eleven Malaysia Holdings will begin a RM7.1m stores lighting retrofit project with General Electric (GE) Malaysia's lighting division to retrofit more than 1,700 7-Eleven stores across the country with the energy-efficient LED lamps and fixtures. The group said the new range of lighting provided by GE complements its next generation concept stores as well as enhancing its existing stores. (SunBiz)
MMHE: Sharp drop in 4Q profit. Lower profit contributions from offshore and marine segments have led to a 83.3% fall in net profit for Malaysia Marine and Heavy Engineering Holdings (MMHE), a subsidiary of MISC, for the 4QFY14. The company reported a net profit of RM16.5m in the quarter compared with RM102.0m a year ago. (StarBiz)
GAB: 2HFY15 will be challenging. Guinness Anchor (GAB) which reported 15.2% earnings growth for the 2QFY15, expect consumer spending to normalise in six months post GST implementation. GAB MD Hans Essaadi said the 4QFY15 could weaken due to dampening consumer sentiment after GST is implemented from April 1, 2015. (SunBiz)

MARKET UPDATE

US markets were lifted by healthy earnings reports, merger and acquisition related news and a slight improvement in crude oil prices. Companies like Twitter Inc. and Visa Inc. recorded betterthan- expected revenue and profit respectively while Pfizer Inc. agreed to buy Hospira Inc. (the largest provider of injectable drugs and infusion technology) in a deal worth USD17bn. On the economy, data released yesterday showed fewer Americans filing for unemployment benefit claims last week while data today will likely show overall unemployment rates remaining at 5.6%. For the day, the Dow Jones Industrial Average rose 1.2% while the S&P 500 gained 1.0%. European markets closed the day mixed amid growing concerns over Greece (again!). Following the European Central Bank’s overnight move to tighten lending rules to Greece, its government is now holding onto its demands to end austerity, setting off the nation on another collision course with the governing authorities and its creditors. Amongst the major economies, gains on the continent were led by France and UK with tepid rises of 0.2% and 0.1% respectively while Italy and Spain led losers with declines of 0.6% and 0.4%. Germany’s DAX closed 0.1% lower. Investors in China took the reserve requirement ratio cut as a sign that the country’s economic slowdown is deepening, hurriedly exiting equities and driving the Shanghai Composite Index 1.2% lower consequently. Earnings reports in Asia were mixed, with Sony Corp. (+12.0%) reporting its best quarterly operating profit in 7 years and Hitachi Ltd. (-9.9%) missing estimates. Other notable benchmark losers were Nikkei 225 (-1.0%), KOSPI (-0.5%), Straits Times Index (-0.3%) and Jakarta Composite Index (-0.7%). The Hang Seng Index and FBM KLCI eked out gains of 0.4% and 0.01% however.
The Public Bank Group announced a full-year FY14 net profit of RM4.52bn, 11.2% higher than the previous year’s RM4.06bn, while also declaring a second interim dividend of 31sen (for a full-year dividend of 54sen) – a commendable set of results in light of increasing competitive pressures. Malaysia Marine and Heavy Engineering Holdings saw its full-year net profit slump 45% to RM129.9m however. Elsewhere, Fututech has requested for a suspension in the trading of its securities pending a material announcement, reportedly an injection of construction assets and contracts by its major shareholder into the company. Nexgram Holdings announced the entering into of a joint venture mixed property development (three blocks of towers with service apartments, commercial and retail shops) in Dengkil. For one, it’s interesting that company diversifications invariably gravitate towards either construction or property-related businesses.... but Dengkil?

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