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| | | | SECTOR RESEARCH | | | | | | | 2Q17 results round-up
by Thong Jung Liaw |
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| | | | | | 2Q17 results for the O&G sector were largely in line and we expect the momentum to pick up in 2H17. Oil price hovering at USD50/bbl level and PETRONAS raising its dividend payment commitment for FY17 are some of the key positives pointing towards an improved outlook. We reiterate our view that the sector has bottomed. Our average oil price estimate for 2017 is USD51.80/bbl. We remain POSITIVE on the sector. Our key BUYs are Dialog, Yinson, Sapura Energy and Wah Seong. | |
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| | | | MACRO RESEARCH | | | | | | | | FBMMES Index: Improving Sentiment
by Nik Ihsan Raja Abdullah |
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| | | | | | FBMKLCI fell 2.67pts to 1,783.66 yesterday, led by declines in GENM, IHH and PTG. Market breadth was negative with losers outpacing gainers by 457 to 406. A total of 1.99b shares worth MYR1.61b changed hands. With the Dow extending its gains for seventh consecutive day, local bourses could stage a rebound today. However, market could remain choppy in this holiday-shortened week and as investors await outcome of US FOMC meeting. | |
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| | NEWS | | | Outside Malaysia:
U.S. Homebuilder sentiment falls on storm-related supply concern. Sentiment among America's homebuilders fell more than forecast in September as companies grew concerned about the cost of construction materials and labor shortages in the wake of Hurricanes Harvey and Irma, according to data from the National Association of Home Builders/Wells Fargo. Housing Market Index fell to 64 from a revised 67 in August. Measure of six-month sales outlook dropped 4 points, the most since November 2015, to 73. Current sales index declined to 70 from 74, the biggest retreat in nearly three years. (Source: Bloomberg)
U.S: China increases U.S. treasury holdings to almost one-year high, an indication that government policies helped curb capital flight. China's holdings of U.S. bonds, notes and bills rose for the sixth straight month to USD 1.17tr in July, an increase of USD 19.5b from a month earlier, according to Treasury Department data released. Japan owned USD 1.11tr, up by USD 22.3b from June, marking the biggest gain in almost four years. China in June regained its position as the largest foreign holder of U.S. Treasuries. Japan had held the spot for eight months. (Source: Bloomberg)
U.K: Outlook seen as rosier as BOE edges closer to rate hike. The Centre for Economics and Business Research upgraded its outlook for the nation's economy, citing a pickup in manufacturing and a view that the worst of the consumer-spending squeeze has passed. The group now expects U.K. growth of 1.6% this year and 1.4% in 2018, an increase from 1.3% and 1.2%, previously. The revision comes after BOE policy makers said last week that they're headed toward raising interest rates for the first time in more than a decade, noting that while Brexit still poses a risk, data since their last decision points to a "slightly stronger picture than anticipated." (Source: Bloomberg)
China: Home prices rose in fewer cities last month and declined in some of the nation's hottest markets, signalling that authorities may be able to limit additional curbs to cool overheating. New-home prices, excluding government-subsidized housing, gained in 46 of 70 cities tracked by the government in August, compared with 56 in July, the National Bureau of Statistics said. That was the smallest number of increases since January. Prices fell in 18 cities from the previous month and were unchanged in six. (Source: Bloomberg)
Crude Oil: Saudi crude exports fell in July to lowest in almost three years as the world's biggest oil exporter intensified efforts to curb supply to counter a global glut. The kingdom pared monthly exports to 6.69 million barrels a day, the fewest since August 2014, according to information that the country submitted to the Joint Organisations Data Initiative. Saudi shipments declined from 6.89 million barrels in June, data posted on the initiative's website showed. The nation pumped 10.01 million barrels a day of crude in July, down from 10.07 million in June, according to data from the Riyadh-based initiative, known as JODI. (Source: Bloomberg) | |
| | | | | Other News:
Kerjaya Prospek: Bags MYR291m construction job in South Bangsar. The group has won a contract worth MYR291m for construction works in Bangsar, which is related to a proposed residential development project known as "The Estate". The latest contract win brings its total outstanding orderbook to MYR3.15b. (Source: The Edge Financial Daily)
Salcon: To replace pipes for Air Selangor. Its wholly-owned subsidiary, Salcon Engineering, has been awarded a MYR13.17m pipe replacement project by Pengurusan Air Selangor S/B. The proposed project in Selangor, Kuala Lumpur and Putrajaya would start on Oct 2 and be completed on Jan 1, 2019. (Source: The Star)
Jaycorp: To build Azman Hashim Gallery and Auditorium at UMS. Its 60%-owned subsidiary Jaycorp Engineering and Construction S/B has secured a MYR12.6m contract to build the one-storey Azman Hashim Gallery and Auditorium at Universiti Malaysia Sabah (UMS) in Kota Kinabalu. The UMS project, awarded via public tender, is expected to be completed within 78 weeks (1½ years) from the date of site possession. (Source: The Star)
T7 Global: Investment hits oil in Xanadu, bags MYR7.2m jobs. It said its investment in Triangle Energy Global Ltd has paid off after it hit oil in the coastal Xanadu-1 well in the Perth Basin.T7 Global had in June announced its acquisition of a 9.8% stake in the Australian-listed oil and gas exploration and production firm, Triangle Energy, for USD500k or MYR2.14m. Separately, T7 Global said its wholly-owned unit Tanjung Offshore Services S/B has bagged two contracts worth MYR7.2m from Petroliam Nasional and the MMC-Gamuda KVMRT (UGW) joint-venture. (Source: The Edge Financial Daily) | |
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