Economy

Global: Oil jumps 8%, biggest three-day surge since 1990. Oil futures soared on Monday for a third consecutive day, rising more than 8%, as a downward revision of US crude production data and OPEC's readiness to talk with other producers helped extend the biggest three-day price surge in 25 years. On Monday, prices fell initially but reversed course mid-morning. The three-day gains were more than the 20% mark that often signals a bull market. Even so, few were prepared to call a definitive end to the slump. (Reuters)

US: Fischer doesn’t sway Dec camp as 48% see Sept Fed liftoff. US central bankers face their toughest policy call in years next month -- raise interest rates or wait a little longer. Whatever the decision, about half of economists will be wrong. The polarized views came after turbulence in global financial markets in the past week cast doubt on when the Federal Reserve would raise rates. (Bloomberg)

EU: Greece's 'invisible negotiator' may assuage bailout fears in election run-up. The appointment of Greek bailout negotiator George Chouliarakis to be finance minister in a caretaker government may help assuage some fears that Greece's bailout program could go off track while it prepares for elections. (Reuters)

EU: Low inflation in Europe puts spotlight on ECB. With low price inflation serving as a reminder of the euro zone's delicate health, the ECB is having to reassure market investors that it can do yet more to help the economy. Fresh data showed on Monday that inflation throughout the 19-country bloc was just 0.2% - illustrating that while the euro zone's economy is stabilizing, it is doing so only at a very low level. (Reuters)

China: Eases housing investment rules again to boost economy. China relaxed its housing investment rules for the second time in two weeks on Monday by slashing the down payment level for most second-home buyers, as authorities try to jumpstart growth in a part of the economy that is showing rare signs of buoyancy. The minimum down payment level for those buying their second homes and funding their purchases with their housing provident funds will be lowered to 20% from 30% in most cities. (Reuters)

China: Yuan up on suspected intervention, set for August loss. China's yuan firmed on Monday after the central bank set a stronger guidance rate while it also appeared to continue using state-owned banks to support the Chinese currency, traders said. For August, the currency is set to depreciate 2.7% if it closes at the midday level. Most of the losses came after the People's Bank of China (PBOC) surprised markets by devaluing the yuan by nearly 2% on Aug 11. (Reuters)

Japan: July industrial output falls, signals labored economic recovery. Japan's industrial output unexpectedly fell in July in a worrying sign that high inventories and weak overseas demand could further hamper an economy struggling to recover from a slump in the 2Q. (Reuters)

Markets

KNM: Secures RM268m contract from Cypark. KNM Group’s wholly-owned subsidiary KNM Process Systems SB via SHK Consortium has been awarded a RM268.4m contract by Cypark SB to undertake engineering, procurement, construction and commissioning (EPCC) works at Ladang Tanah Merah, Negri Sembilan. The total EPCC contract price comprises the offshore portion for the EPCC works in the sum of RM135.4m and onshore portion of RM133m. (SunBiz)

Maybank: Eyes more revenue from overseas. Malayan Banking (Maybank) aims to increase its corporate banking services across the region, as the group targets to boost income contribution from overseas. Maybank’s global banking business, which includes corporate banking, investment banking, global markets, transaction banking and asset management services, contributes less than 30% to group’s revenue. (StarBiz)

MAHB: To take aggressive steps to recover charges. More aggressive steps will be taken to recover overdue payments from airlines, said Malaysia Airports Holdings (MAHB). MAHB has been closely engaging with defaulting airlines on the collection of the arrears. This included periodic reminders and letters to request payment, he said. (StarBiz)

Kim Hin: To promote Johnson Tiles. Ceramic tile manufacturer Kim Hin Industry plans to open retail outlets throughout the country to distribute Johnson Tiles – its newly acquired Australian brand. Executive chairman Chua Seng Huat said five brand outlets in major cities in Peninsular Malaysia, Sarawak and Sabah are expected to be launched next year to drive sales of the tiles. (StarBiz)

Boon Koon: Plans to launch own brand superbikes. Truck maker Boon Koon Group plans to launch its own range of superbikes, with commercial production expected to start in the 1QFY16. Group executive chairman Datuk Goh Boon Koon said Boon Koon is partnering a China company for the super bike project. The bikes will be build using German technology. (StarBiz)

7-Eleven: Posts 2Q net profit of RM10.7m. 7-Eleven Malaysia Holdings raked in a net profit of RM10.7m for the 2QFY15 compared with RM16.4m in the previous corresponding period. Eleven CEO Gary Brown said the 2Q results had shown the significantly negative effect on fast moving consumer goods retail spending from the introduction of the GST. (SunBiz)

Oil & Gas (Overweight): Petronas may consider ventures in Venezuela, Trinidad & Tobago. Petroliam Nasional (Petronas) may consider participating in joint gas exploration at the border areas of Venezuela and Trinidad and Tobago, Foreign Minister Datuk Seri Anifah Aman said. He said this would hinge on an invitation from Venezuela and Trinidad and Tobago, and if the conditions and terms were favourable. (SunBiz)

Shipping: Asian LNG price faces steep fall. Asian liquefied natural gas (LNG) prices could fall a further 25% in coming months as new supply, falling demand and weaker oil prices put it on par with iron ore and coal as the worst performing commodity of recent years. Asia’s LNG market has already fared worse than slumping oil markets, with spot prices (LNG-AS) down 60% since 2014 to USD8 per million British thermal units (mmBtu). (StarBiz)

MARKET UPDATE

The FBM KLCI might have a weak start today after US stocks ended a volatile month on a sour note, following European and Asian bourses lower as losses in Chinese equities weighed on global equities. Falling Chinese shares pulled bourses down across the US, Europe and Asia following reports that Beijing has scrapped large-scale share purchases as a method of propping up markets. At the closing bell, all three major Wall Street equity indices fell, with the S&P 500 down 0.8% and 6.3% in August, its worst monthly performance since May 2012. The benchmark index was initially led down by energy stocks, which later jumped as oil prices spiked on lower US output figures and news OPEC will speak to producers. The Dow Jones Industrial Average fell 114.98 points or 0.7% to 16528.03 or lost 6.6% in August, its largest percentage decline since May 2010. Meanwhile, the Nasdaq Composite fell 1.1%. Across the Atlantic, European stocks ended lower, registering their worst monthly performances since Europe’s debt crisis four years ago with the German DAX 30 index fell 0.4% to 10,259.46 shedding 9.3% this month and the French CAC 40 index lost 0.5% to 4,652.95 or eased by 8.5% in August. London markets were closed for a bank holiday, but the FTSE 100 lost 1% on Friday and closed out the month of August with a 6.7% drop.

Back home, the FBM KLCI gained 11.04 points or 0.7% last Friday to close at 1,612.74 points. As for the regional markets yesterday, the Shanghai benchmark finished down 0.8% at 3205.99 and the Hang Seng Index ended up 0.3%, but the Nikkei Stock Average finished down 1.3% and the S&P ASX 200 was down 1.1%. South Korea’s Kospi closed up 0.2% and Indonesia’s JSX was up 1.1%.

Source: PublicInvest Research - 1 Sep 2015