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| | | MACRO RESEARCH | | | | | | GE14: Malaysia goes to the poll
by Suhaimi Ilias |
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| | | | | | PM Najib announced the dissolution of Parliament on 7 Apr 2018. By law, a general election must be held within 60 days of the dissolution. The next step is for the Election Commission (EC) to announce the nomination and polling dates. 222 parliamentary seats and 505 state assembly seats are up for grabs. We expect Malaysian equities to trade with a cautious bias in the lead-up to polling day, amid external volatilities arising from US-China trade tension. | |
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| | | | | | Fastest reserves rise in 3 years
by Suhaimi Ilias |
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| | | | | | Total gross external reserves jumped +USD3.9b to USD107.8b at end-Mar 2018 (mid-Mar 2018: USD103.9b; end-Feb 2018: USD103.7b), highest since mid-Mar 2015 and the fastest increase in 3 years, supported by capital, trade and corporate flows. The latest tally is equivalent to 7.4 months of retained imports and 1.1 times of short-term external debt. | |
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| | | | | | Technical Review for Global Hot Stocks
by Nik Ihsan Raja Abdullah |
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| | | | | | MSCI World Index (MXWO Index) had a good run since Feb 2016. The index rallied from a low of 1,460 to a high of 2,249 in Nov 2017. Although it is currently in a consolidation mode, we believe the long-term structure remains bullish. Based on wave count, MXWO Index has completed its Wave 3 move and is now on a Wave 4 corrective move. This current consolidation could head towards the lower Bollinger Band, which is also near to the 38.2% Fibonacci Retracement level at 1,975. | |
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| | | | | | MXAPJ Index: Under Pressure; To Test Critical Support
by Nik Ihsan Raja Abdullah |
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| | | | | | MSCI Asia Pacific ex. Japan Index (MXAPJ Index) rallied from a low of 420 in Dec 2016 to a high of 617 in Jan 2018. Momentum, however, failed to sustain, and we saw the index slipped into a consolidation mode. Current correction is not complete yet as RSI is still trading below the 50pts mark while MACD is also pointing downward. At this juncture, we believe the index could still head south, possibly towards the 38.2% Fibonacci Retracement level and 200-day EMA line at 542-550. | |
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| NEWS | | | Outside Malaysia:
U.S: Consumer credit rises by lowest amount in five months. U.S. consumer debt rose in February by the least in five months as credit-card balances stalled, indicating Americans' appetite for borrowing waned further after a fourth- quarter shopping spree. Total credit rose USD10.6b and follows an upwardly revised USD15.6b Jan. gain. Revolving credit outstanding rose USD148m m/m, smallest gain since a drop in Nov. 2013, after a $1.45b rise in Jan. Non-revolving debt outstanding climbed USD10.5b m/m after USD14.1b Jan. increase. (Source: Bloomberg)
E.U: Can help settle the U.S.-China trade dispute, officials say. The European Union can help settle the burgeoning trade spat between the U.S. and China, European Commission Vice Presidents Jyrki Katainen and Valdis Dombrovskis said. Rather than participate in the dispute, the EU can leverage its role as the world's largest market to uphold the rules of international trade and push back against unilateral tariffs like the ones backed by U.S. President Donald Trump, the two officials said in Bloomberg television interviews from the Ambrosetti workshop in Cernobbio, Italy. The EU "is trying to settle down or stabilize the current situation," said Katainen, who is the bloc's commissioner in charge of jobs and growth, stressing that there should be cooperation with both the U.S. and China. (Source: Bloomberg)
China: Foreign reserves rebound on Yuan gains, capital curbs. China's foreign-currency holdings resumed gains last month as the government kept capital curbs in place and the Yuan capped its best quarter in a decade. Reserves rose USD8.34b to USD3.143tr in March from the previous month, the People's Bank of China said. The March figure marks a turnaround after falling in February for the first time in 13 months. The State Administration of Foreign Exchange expects the country's foreign reserves will remain stable. (Source: Bloomberg)
Japan: Current-account surplus increases on overseas income. Japan's current-account surplus widened in February from a month earlier, supported by returns on overseas investments and a surplus in goods trade. The current-account surplus was JPY2.1tr (USD19.6b), following a surplus of JPY607b in January. The primary income surplus was JPY1.9tr. The surplus in goods trade was JPY188.7b. Japan's current account has been in the black every month since June 2014, reflecting the size of the nation's overseas investments and its trade surplus, which has been partly the result of a weaker currency. As U.S. President Donald Trump becomes increasingly aggressive on trade issues, escalating tensions with China, he could turn his attention to Japan's trade surplus with the U.S. next. (Source: Bloomberg) | |
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Suria Capital: MMC's planned acquisition of Sabah Ports from Suria Capital aborted. Suria Capital is no longer pursuing the proposed acquisition of Sabah Ports S/B (SPSB) by MMC Corp. Sabah Ports remains as its wholly owned subsidiary. Last August, Suria Capital confirmed that it was in talks with MMC on possible equity sale in Sabah Ports. (Source: The Sun Daily)
Spritzer: Spending MYR65m to expand warehouse, output. Bottled water products maker Spritzer has allocated MYR65m to expand its warehousing facilities and production capacity. This includes a plan to build an automated warehouse in Taiping, Perak, this year at a cost of MYR45m and a MYR20m budget to add new production lines at its Shah Alam plant. Both expansion projects are scheduled for completion in 2019. When completed, the group's production capacity will increase by 30%, while its production lines will increase to 17 from 15 now. (Source: The Star Online)
Central Industries: To undertake 4-for-5 bonus issue. Central Industrial Corp (CICB) proposes to undertake a bonus issue of 40 million bonus shares on the basis of four bonus share for every five existing shares held to reward its existing shareholders. The proposed bonus issue aims to reward its shareholders for their loyalty and continuing support, by enabling them to have greater participation in the equity of the company in terms of the increased number of shares held while maintaining their percentage of equity interest. Upon completion of the proposed bonus issue, CICB's share capital will remain at MYR50m while the number of issued shares in CICB will increase to 90 million. It is expected to be completed by the third quarter of 2018. (Source: The Sun Daily)
Ni Hsin: Buys 7.26% stake in Caely for MYR4.6m. Ni Hsin Resources has acquired 7.26% stake in Caely Holdings Bhd for MYR4.6m cash in the past 12 months. Caely manufactures undergarments, garment, leather goods, sportswear and household products. The purchase consideration is based on open market price ranging from 67 sen to MYR1.08 per share, which was funded entirely from internally generated funds. (Source: The Sun Daily) | |
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