Monday, April 1st, 2019
LONDON, April 1 — US crude oil hit a 2019 high today and Brent gained a dollar after tight supply and positive signs for the global economy drove both benchmarks’ largest first-quarter gains in nearly a decade. US West Texas Intermediate (WTI)…
BRUSSELS, April 1 — Inflation in the eurozone slowed in March, data showed today, amid worries that the European economy is cooling as the effects of Brexit finally take a toll. The slowdown of inflation comes as signs are multiplying of slower…
DUBAI, April 1 — Oil giant Saudi Aramco revealed today it made the world’s biggest corporate profit last year, opening its secretive accounts for the first time as it prepares to raise funds from investors. International ratings agencies Fitch…
PETALING JAYA: The dovish tilt by major central banks as well as Bank Negara Malaysia (BNM) may continue, potentially stirring interest in high dividend yielders, according to HLIB Research.
“For equities, we expect high dividend yielding stocks to garner interest on back of dovish expectations. In this regard, we like selective real estate investment trusts (REITs) like IGB REIT and MRCB-Quill REIT, Bermaz Auto Bhd (BAuto), Taliworks Corp Bhd and Lii Hen Industries Bhd. For liquid large cap yield, we highlight Malayan Banking Bhd (Maybank) (6.4-6.6%),” it said in a note today.
Year-to-date, the 10-year Malaysian Government Securities yield has fallen 32bps to 3.75%.
HLIB Research said external uncertainties will persist into Q2 and as such, opined that BNM will continue with its dovish bias for the upcoming Monetary Policy Committee meeting in May 6-7. It does not anticipate an overnight policy rate cut in 2019.
“Consequently, we reckon there could be a possible sequential weakening of the ringgit in Q2 and export plays could return; we like Top Glove Corp Bhd and Lii Hen (also a yield play).”
Following earnings changes, in particular the downgrade of the plantation sector to “underweight” from “neutral”, HLIB Research’s KLCI target is cut to 1,710 points from 1,750 points. It also projected KLCI earnings per share growth of 2.1% for 2019 and 4.5% for 2020.
This comes on back of lacklustre earnings outlook which is below the post global financial crisis compound annual growth rate of 6.2%.
It added that the lower gross domestic product projections by BNM reflects the challenges Malaysia faces as it walks a thin rope, balancing between growth and fiscal prudence against an uncertain external backdrop.
The research house’s top picks are Maybank, Top Glove, Sunway Bhd, IGB REIT, TIME dotCom Bhd, DRB-Hicom Bhd, BAuto, Taliworks, Frontken Corp Bhd and Lii Hen.
PETALING JAYA: The latest Purchasing Managers’ Index (PMI) data indicated that Malaysian manufacturers continued to face a challenging business environment at the end of the first quarter, with key survey gauges such as output and new orders falling.
The headline Nikkei Malaysia Manufacturing PMI – a composite single-figure indicator of manufacturing performance – registered 47.2 in March, down slightly from February’s reading of 47.6, and below the long-run survey average.
IHS Markit, which compiles the survey, however, said firms also grew more optimistic about the outlook, citing input cost and output price levels were broadly stable in March, while manufacturers held employment steady.
An analysis of comparable historical official data on Malaysian manufacturing output suggests that, at current levels, the survey data are indicative of annual output growth close to 4%.
A deterioration in the production trend commonly reflected tougher demand conditions, according to the anecdotal evidence from the survey provided by PMI panel member companies, particularly in overseas markets.
Meanwhile, Malaysian goods producers focused additional resources to clearing outstanding business in March. Efficiency gains reportedly helped ease pressures on capacity. Some panel members attributed backlog depletion to higher staffing levels.
However, manufacturing employment was broadly stable overall in March, as hiring in some instances was offset by other firms reducing workforce numbers due to softer demand.
Malaysian manufacturers were cautious towards inventory levels in March, with both pre- and post-production stocks falling. Holdings of finished items were depleted as firms stepped up efforts to ship orders in a timely fashion, while input stocks were cut for efficiency purposes.
Subsequently, the manufacturing industry saw lower purchasing activity. Elsewhere, survey data signalled stable price levels, with input prices and output charges both broadly unchanged since February.
Against the challenges signalled by latest data, Malaysian manufacturers reported their strongest degree of optimism towards future output in almost one year, supported by forecasts of improved sales, new projects and products and successful new contract tenders.
Commenting on the survey data, IHS Markit chief business economist Chris Williamson said Malaysia’s manufacturing companies reported increasing headwinds on current business activity in March, though also reported a brightening outlook which adds to hopes that the recent slowdown will start to ease in coming months.
“While several key survey gauges fell in March, it’s important to bear in mind that, when compared against official measures, the survey is still broadly indicative of the economy growing at an annual rate of 4–4.5%, with manufacturing output increasing at an annual pace of just under 4%.
“As with many other fast-growing economies, in Malaysia the PMI gauges have to drop much further below 50 to indicate either a contracting manufacturing sector or a decline in GDP.”
He said encouragingly, the survey found companies have become more optimistic about the year ahead, with expectations of future output growth rising to the highest for nearly a year. Indices of purchasing and inventories consequently came off recent lows as companies started to plan for demand in coming months.
“However, major headwinds persisted, including a fourth successive monthly deterioration in export business, plus growing concerns over the impact of trade wars and slower global economic growth,” he added.
BEIJING, April 1 — Chinese stocks led emerging market shares higher today as positive Chinese manufacturing data eased worries about a broader economic slowdown with progress in U.S-China trade talks providing an additional boost. Mainland Chinese…
x LONDON, April 1 —Gains in miners and banks today placed London’s main bourse on course for its biggest daily increase in two months, as sentiment picked up after surprisingly upbeat data from China and progress in US-Sino trade talks. The FTSE…
LONDON, April 1 — The British pound rose today as investors prepared for parliament to vote on a series of Brexit options, with some hoping that the current uncertainty will end in a softer Brexit than Prime Minister Theresa May’s defeated…