The week ahead - biggest listing of the year

Biggest listing of the year

MR DIY Group (M) Bhd and Econframe Bhd are going to hit the market. The former is a home improvement retailer while the latter is a door system solution provider.

MR DIY, which is expected to be listed on the main market of Bursa Malaysia today, saw its RM1.5bil initial public offering (IPO) oversubscribed by retail investors as well as Malaysian and foreign institutional funds by 3.91 times.

The home improvement retailer’s IPO involved the offer of up to 941.49 million shares, with institutional investors taking up 779.96 million shares and the remaining 161.53 million shares going to retail investors.

MR DIY’s IPO is the largest in Malaysia in three years since petrochemical group Lotte Chemical Titan Holding Bhd went public at an offer price of RM6.50, raising RM3.77bil in 2017.

Econframe is en route to an ACE Market listing tomorrow. The group aims to raise RM18.2mil from its IPO to build a new factory in Kapar, Klang and increase production capacity.

In addition to the listings, the Department of Statistics Malaysia is expected to announce September 2020 external trade statistics on Wednesday.

Malaysia’s trade surplus expanded 19.7% on a year-on-year (y-o-y) basis to RM13.23bil in August. Exports for the month reviewed fell 2.9% to RM79.14bil while imports slipped by 6.5% to RM65.92bil.

For the first eight months of 2020, trade surplus rose by 2.9% to RM102.98bil compared with August 2019.

GDP report cards

SOUTH Korea, Hong Kong and Taiwan are expected to report their gross domestic product (GDP) numbers for the third quarter this week.

UOB Global Economics and Markets Research expects South Korea’s GDP in the third quarter to contract 2.2% year-on-year (y-o-y) after falling 2.7% in the second quarter.

It expects Taiwan’s GDP to grow 1.9% y-o-y and Hong Kong’s GDP to contract 6.3% in the third quarter.

ING senior Asia economist Prakash Sakpal, in a report, said all the three North-East Asian countries releasing GDP data suffered from the second wave over the last quarter.

On the flip side, accelerated export recovery should bode well for the GDP numbers.

ING expects export strength to outweigh domestic demand weakness producing a strong GDP bounce over the second quarter. However, it said that won’t be enough to pull the y-o-y growth back into positive territory just yet.

According to IHS Markit estimates, South Korea and Taiwan are projected to see GDP expand at a quarterly rate of 10.5% and 6.8% respectively. The Hong Kong economy meanwhile is expected to contract at a 7% quarterly rate.

China industrial profit

China is expected to announce industrial profit for the month of September tomorrow.

ING said China’s industrial profits growth is on a steady upward trend in September, signalling steady investment and GDP growth in the period ahead.

The country’s industrial companies reported a 19.1% increase in profit in August from a year earlier, edging down from July’s 19.6%, according to the National Bureau of Statistics.

In the first eight months of the year, industrial profit fell 4.4%, the statistics bureau said.

Additionally, China’s official manufacturing and non-manufacturing PMI surveys for October will also be released this week.

According to the Bloomberg poll, manufacturing PMI is expected between 51.3 and 52.0 while non-manufacturing may edge higher to 56.7.

Week of earnings in US

IT will be a blockbuster week of US earnings reports with more than 180 S&P 500 companies reporting their third quarter results, according to UOB.

Apple Inc, Microsoft Corp, Amazon, Facebook Inc and Pfizer Inc are among the companies expected to announce their quarterly earnings.