Economy
US: Fed's Williams sees gradual rate hike path as 'best course'. The Federal Reserve should stick with its plan to raise interest rates gradually, a top policymaker said, given his view that unemployment is headed to 4.5% by late this year and inflation is set to reach 2% in two years. (Reuters)
US: Jobs market firming; manufacturing still on the ropes. The number of Americans filing for unemployment benefits unexpectedly fell last week, pointing to labor market strength that keeps Federal Reserve interest rate hikes on the table this year. Other data showed factory activity in the mid-Atlantic region contracting at a slower pace in Feb and hinted at a pick-up in wage growth. (Reuters)
EU: ECB sees increased risks, some pressing for pre-emptive action. Growth and inflation risks are on the rise in the euro area, the minutes of the ECB's Jan meeting showed, and some policymakers are advocating the need to act pre-emptively in the face of new threats. (Reuters)
China: Jan inflation data shows deflationary pressure persists. China's consumer inflation quickened to a five-month high in Jan due to rising food prices but producer prices shrank for a 47th straight month as falling commodity markets and weak demand add to deflationary pressure in the economy. (Reuters)
Japan: Exports fall most since 2009 as global slowdown bites. Japan's annual exports in Jan fell the most since the global financial crisis as demand weakened in China and other major markets, leaving policy makers battling to revive a fragile economy after a 4Q contraction. Exports fell 12.9% YoY in Jan in their fourth straight month of declines, Ministry of Finance data showed. (Reuters)
Malaysia: Slower growth in 4Q. Malaysia’s economy continues to slow down, with consumers still feeling the strain from the higher cost of living brought about by the GST and the removal or cuts in subsidies. The economy as measured by GDP expanded by 4.5% in the 4Q of 2015 compared to the same quarter of the previous year. (StarBiz)
Markets
I-Bhd (Outperform, TP: RM0.65): Targets RM1.5bn GDV from two projects. I-Bhd, the developer of i-City, is looking to achieve a GDV of RM1.5bn this year from two of its projects. Deputy chairman Datuk Eu Hong Chew said this would come from its high-end 8Kia Peng condominium that was expected to rake in some RM1bn. The rest would come from Hyde Towers @ i-City. (StarBiz)
AirAsia (Outperform, TP: RM1.88): CEO says cheap oil paves way to revive expansion. With low oil prices reducing its operating costs, AirAsia CEO Tan Sri Tony Fernandes said the budget carrier was ready to start expanding again in Southeast Asia and was eyeing Vietnam and the Philippines. Fernandes said the pace of expansion would depend on securing approvals for new routes and airport access. (StarBiz)
MK Land (Outperform, TP: RM0.80): To launch five new products in FY16. MK Land Holdings will be launching a total of five new products in the affordable housing segment, led by its condominium project Residensi Suasana @ Damai located at Damansara Damai with a GDV of RM400m, before its FYE June 30, 2016. In Perak, the Group would be launching four affordable home products. (Financial Daily)
IJM (Neutral, TP: RM3.40): Raises stake in Scomi. IJM Corp has emerged as the single largest shareholder in O&G company Scomi Group after converting its bonds to equity. The conversion will give it an immediate 24.4% stake in the company from an earlier 7.7% before the announcement was made. Scomi said that IJM had converted its convertible redeemable secured bonds of an aggregate nominal value of RM110m to an equity stake. (StarBiz)
BHIC: Gets three-year extension to service Navy’s helicopters. Boustead Heavy Industries Corp’s (BHIC) subsidiary BHIC AeroServices SB has received a three-year extension worth an additional RM30.8m on its in-service support (ISS) contract for six Royal Malaysian Navy’s Fennec AS555SN helicopters. (StarBiz)
UMW: Proposes aerospace industrial park in Serendah. Proposed to establish an Aerospace Hard Metal Manufacturing Park in Serendah, Selangor, where it will site its manufacturing plant to produce fan cases for Rolls-Royce plc’s aircraft engines. UMW Holdings said that the plant, to be built on 30 acres by its unit UMW Aerospace SB, would act as the anchor tenant. (StarBiz)
Inari: To buy industrial land. Inari Amertron’s unit Inari Technology SB is set to acquire leasehold industrial land with factory erected thereon in Penang for RM22.8m from Unetsys SB. The acquisition is strategic as the said property is located in close proximity to Inari’s existing factories in Bayan Lepas Free Trade Zone and hence increase the group’s total manufacturing floor space in Bayan Lepas, it said. (StarBiz)
UMLand: Targets 75% take-up rate for Johor Halal Park. United Malayan Land’s (UMLand) wholly-owned unit, Tentu Teguh SB (TTSB), is eyeing a 75% take-up rate for the 141.6ha Johor Halal Park project by year-end. The Johor Halal Park and TTSB CEO Mohd Noor Abd Salam said there were committed investors from Singapore, Japan, South Korea, Taiwan and mainland China. (StarBiz)
MARKET UPDATE
US markets ended lower yesterday as the country’s highest crude oil inventories in 86 years spooked investors and raised concerns over the effectiveness of recent moves to quell the voracious supply build-up globally. Economic data releases on the day were slightly positive however, in which unemployment benefits claims unexpectedly fell last week to a 3-month low and a measure of business sentiment contracted less than expected, though insufficient to keep the country’s benchmark from breaking a 3-day winning streak. The Dow Jones Industrial Average and S&P 500 slipped 0.3% and 0.5% respectively. European markets were mixed, though sectors most closely linked with economic growth (banks, energy) saw some measure of selling yesterday. Earnings announcements were similarly mixed, contributing to investors’ indecisions. Nestle SA’s share price fell about 4% after forecasting 2016 sales missing its long-term target, though Air France-KLM Group and Centrica PLC’s rose almost 7% after reporting estimate-beating earnings. Market-wise, Italy, UK and Spain’s indices slumped 1.5%, 1.0% and 0.8% respectively though France and Germany’s gained 0.2% and 0.9%. Asian equities were higher alongside its Western peers the day before, though likely to see some weakness today given the less-than-encouraging performances in the US and Europe yesterday. Japanese benchmarks rose sharply, with both the Topix and Nikkei 225 indices ending 2.5% higher as investors continue to expect the Bank of Japan to expand its stimulus measures. Benchmarks in Hong Kong, Korea, India and Singapore were 2.3%, 1.1%, 1.3% and 1.7% higher as the FBM KLCI rose 0.9%.
Air Asia is reportedly on the expansion trail again, aided by lower crude oil prices which have resulted in lower operating costs, Vietnam and Philippines being the targeted destinations. Boustead Heavy Industries Corporation said its 51%-owned subsidiary has secured an extension to a previously-clinched contract, with the cumulative value now at RM63.2m from RM32.4m before, though over 3 years which would make earnings contributions fairly negligible. MK Land Holdings plans to launch 5 new projects with a total gross development value of RM571m, a move undoubtedly positive for the Group which has been fairly quiet on this front in recent years.
Source: PublicInvest Research - 19 Feb 2016
http://klse.i3investor.com/blogs/PublicInvest/91496.jsp
