Economy

US: New home sales unexpectedly jump to one-year high in  April. New home sales in the US unexpectedly spiked to their highest level in a year in the month of April. The report said new home sales jumped by 4.1% to an annual rate of 683,000 in April after surging by 4.0% to a revised rate of 656,000 in March. With the unexpected increase, new home sales reached their highest level since hitting a rate of 707,000 in March of 2022. The extended surge in new home sales reflected strength in the South and  Midwest, where new home sales soared by 17.8% and 11.8%  respectively. (RTT)

US: Former Fed Chair Ben Bernanke says there’s more work  ahead to control inflation. Former Fed Chair Ben Bernanke, who guided the central bank and the US economy through the Great  Recession, thinks central bankers still have work to do to bring down inflation. That work, he and economist Olivier Blanchard argue in an academic paper released Tuesday, will entail slowing down what has been a phenomenally resilient labour market. (CNBC)

EU: Denmark economic confidence rises to 90.8. Denmark's economic sentiment improved further in May as morale in the industry, service, and retail sectors strengthened. The overall economic confidence index, which includes consumer expectations,  rose notably to 90.8 in May from 85.0 in April. The business confidence indicator, which weighs industry, construction, services,  and retail, rose to 97.7 in May from 91.3 in April. (RTT)

EU: Manufacturing slump damps Eurozone private sector  growth. Euro area private sector expanded for the fifth straight month in May but the pace of growth moderated due to a steep decline in the factory output amid a widening divergence in demand growth for goods and services. The flash HCOB composite output index fell to a three-month low of 53.3 in May from 54.1 in April. The score was forecast to drop moderately to 53.7. (RTT)

UK: Grocery inflation edges lower to 17.2% in May. British grocery inflation eased slightly for the second month in a row in May  but remained close to record highs, providing little comfort for consumers grappling with a cost-of-living crisis. Annual grocery inflation was 17.2% in the four weeks to May 14, and while that was down from 17.3% in its April data set, it was the third fastest rate it has recorded since 2008. (Reuters)

UK: Private sector logs further expansion in May. The UK  private sector continued to expand strongly in May, though the pace of growth eased from April's one-year high as the downturn in the manufacturing sector deepened. The flash Chartered Institute of  Procurement & Supply composite output index dropped to a two-month low of 53.9 in May from 54.9 in April. The expected score was 54.6. The PMI also fell to a two-month low of 55.1 in May from  55.9 in the previous month. The reading was expected to fall marginally to 55.5. (RTT)

UK: The IMF now expects the UK to avoid a recession. The IMF  expects the UK to avoid entering a recession and maintain positive growth in 2023. British economic activity had seen a significant slowdown, compared to last year, and that inflation, which is currently at 10.1%, remains stubbornly high. The UK economy continues to feel the impact of Russia’s full-scale invasion of  Ukraine, along with lingering supply scarring from the Covid-19  pandemic. (CNBC)

Singapore: Inflation rises slightly to 5.7%. Singapore's CPI  increased somewhat in April after easing to a 9-month low in March amid increased costs for services and private transport, while the core figure was unchanged. The CPI climbed 5.7% YoY in May,  slightly faster than the 5.5% increase in the previous month. (RTT)

Taiwan: Industrial production plummets 23%. The nation’s industrial production plunged 22.86% YoY last month, as semiconductor and flat-panel makers took a severe hit from prolonged inventory correction due to macroeconomic uncertainty.  The index slid to 76.4 last month, hitting the lowest level in about four years after an 11-month losing streak. (Taipei Times)

Markets

AirAsia X: To raise RM50m capital from new shares placement.  AirAsia X plans to raise RM50m capital by issuing 32m new shares.  The shares will be issued to AHAM Asset Management, AIIMAN  Asset Management SB and Lavin Group SB. According to AirAsia  X, the proposed placement, subject to certain conditions, would  involve the issuance of 7.78% of its total issued shares. (BTimes)

SNS: To collaborate on Penang’s digital library programme.  SNS Network Technology is collaborating with Persatuan Kebajikan  88 Kapten Pulau Pinang (88 captains) under the “5G Digital Library  Programme” to equip schools in Penang with wireless 5G  broadband connectivity. SNS would sponsor 264 units of JOI  Classmate 10 totaling RM342,936 to 88 select schools in Penang  as part of a pilot project enabling students to have better access to  their school’s Digital Library anytime and anywhere. These school  would receive a Content Access Server that can keep thousands of  e-books, a modem with 5G broadband, and three units of laptops.  (StarBiz)

Aldrich Resources: To diversify into mining, money lending businesses. Aldrich Resources has proposed to diversify its existing business to include exploration of minerals, mining and mining-related businesses, as well as money lending business. In  Feb, Aldrich had subscribed for 2.5m new shares of a money lending company, Proficient Premium SB, for RM250,000 cash.  Aldrich had in Jan 2022 entered into a mineral production sharing agreement with Northern Dolomite SB and Tekad Mulia SB to combine their resources and experiences to carry out a mining production project. (The Edge)

Pelikan International: In talks with prospective buyers to sell major assets, business interest. The company is appointing an investment bank as the principal adviser to advise the board of directors on the said disposal and negotiate terms of the transaction. The company will make the appropriate announcement(s) to Bursa in accordance with the Main Market listing requirements once the negotiations are finalised and definitive agreements are signed. (The Edge)

Sand Nisko Capital: Scrap plans to develop project in Melaka.  Sand Nisko Capital (SNC) no longer plans to co-develop a mixed development in Alor Gajah, Melaka with privately-held Evergreen  More SB (EMSB). The two parties, however, were not able to agree on the appointment of the relevant contractors and sub-contractors and also their plans in the execution of the proposed development.  The parties are not able to finalise the definitive agreement and the parties have mutually agreed to terminate the HOA via the execution of a letter of termination on May 23. (The Edge)

IPO: Synergy House oversubscribed 14 times, listing June 1.  Synergy House received a total of 12,347 applications from  Malaysians for 375.4m IPO shares valued at RM161.4m. The company said 7,277 applications for 164.2m IPO shares were received for the Bumiputera segment, reflecting a 12.13-fold  oversubscription rate. It added that for the remaining Malaysian public portion, a total of 5,070 applications for 211.3m IPO shares were received, reflecting a 15.9 times oversubscription rate.  (BTimes)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks fell on  Tuesday as policymakers in Washington struggled to lock in a debt ceiling deal, with less than two weeks left until the government is due to default. Losses accelerated on Wall Street in the afternoon,  as the blue-chip S&P 500 closed 1.1% lower, pulled down by technology stocks. The tech-heavy Nasdaq Composite lost 1.3%. In  Europe, the region-wide Stoxx 600 index closed 0.6% lower,  marking its biggest daily drop since the start of May. Germany’s  Dax fell 0.4%, while France’s Cac 40 was the region’s biggest faller,  losing 1.3%. The moves come after a number of closely watched economic surveys pointed to persistent price pressures in the UK  and the Eurozone, raising the likelihood that interest rates will increase further.

Back home, Bursa Malaysia extended Monday’s losses to end lower on Tuesday on continued selling in financial services, as well as industrial products and services counters, amid weaker sentiment on regional bourses. At the closing bell, the FBM KLCI  fell 7.46 points to close at 1,411.54 compared with 1,419.00 at  Monday's close. In the region, China’s CSI 300 fell 1.4%, with financials and technology stocks among the worst performers.  Japan’s Topix fell 0.7% and Hong Kong’s Hang Seng index slipped  1.3%, taking its loss so far this year to 3.5%

Source: PublicInvest Research - 24 May 2023