Economy

Global: Trade rows cloud global economy. Trade disputes and tighter financial conditions are among the top threats to a slowing world economy, global finance officials said, urging countries to take steps to shore up growth. The global expansion, now seen at its most sluggish pace in three years, is likely to firm up next year, but central banks and fiscal authorities have limited policy options to drive a rebound, officials said in the joint communique of the IMF’s steering committee. “While we expect to see a pickup (in growth) next year, trade tensions, geopolitical risks, political instability are among the challenges,” Lesetja Kganyago, the committee’s chairman and the South African Reserve Bank’s governor, said at a press conference after the panel adjourned its semi annual meeting. (The Star)

US: Consumer sentiment index drops more than expected in April. University of Michigan released a report showing sentiment has deteriorated by more than anticipated in the month of April. The preliminary report showed the consumer sentiment index dropped to 96.9 in April from the final March reading of 98.4. Economists had expected the index to edge down to 98.0. The bigger than expected decrease by the headline index reflected less optimism about the economic outlook, as the index of consumer expectations slid to 85.8 in April from 88.8 in March. (RTT)

EU: Domestic demand will support the euro zone despite ‘pronounced’ slowdown, IMF says. The IMF has admitted it was “surprised” by the extent of the recent slowdown in the euro zone, but expects growth to pick up again. The euro zone economy has struggled with changes in domestic policies in Germany, social unrest in France, and weaker external trade. However, some of that pressure has started to ease and domestic demand should drive further growth, Poul Thomsen, director of the IMF’s European Department said. (CNBC)

China: Exports rebounds in March. China's exports rebounded strongly in March, but imports fell further, official customs data showed Friday. The exports rose 14.2% YoY in March, reversing a 20.8% decline in Feb. Economists had expected a 6.5% rise. Imports dropped 7.6% annually in March, following a 5.2% fall in the previous month. Economists had expected the imports to rise to 0.2%. The trade surplus rose to USD32.6bn in March from USD4.1bn in Feb. Economists had forecast a surplus of USD5.7bn. (RTT)

Japan: Sales tax will rise as scheduled in Oct. Japanese Finance Minister Taro Aso pledged to global finance leaders that Tokyo will forge ahead with a scheduled sales tax hike in Oct, even as weakening global growth darkened the outlook for the export-reliant economy. There is simmering speculation Prime Minister Shinzo Abe may put off the twice-postponed increase in the sales tax, as he faces an upper house election later this year amid increasing signs of weakness in the economy. The premier has repeatedly said the hike will proceed this time unless Japan is hit by a shock to the scale of the collapse of Lehman Brothers in 2008. Aso made no such qualification in pledging to hike the rate. (The Star)

Markets

Dialog (Outperform, TP: RM3.73): Plants not affected by fire in Pengerang complex. Dialog Group said that its Pengerang Deepwater Terminals facilities were not affected by the fire that broke out in Petronas' Pengerang Integrated Complex (PIC) in Johor. “Dialog wishes to announce that the said incident has not impacted our people nor our operations, and has no financial impact on our business,". "The management will continue to assess and monitor our facilities and assets to ensure safe working conditions for our staff," it added. (The Edge)

Cypark (Neutral, TP: RM1.60): Bags RM4.71m job for KPJ hospital in Johor. Cypark Resources has bagged a RM4.71m contract to undertake upgrading works of mechanical system (chiller system), electric generator and medical gas for the KPJ Pasir Gudang Specialist Hospital in Johor. The works will be divided into two sections – Section 1 is to be completed on Jan 22 next year, while Section 2 is slated for completion on Oct 22 this year. (The Edge)

FGV: Teaming up with Johor Port to bid for development of clean bulk cargo terminal in Karachi. FGV Holdings’ Pakistani unit is looking to team up with Johor Port to bid for the development of a clean bulk cargo terminal in Karachi Port, Pakistan. FWQ Enterprise (Private) Ltd had signed a Memorandum of Understanding with Johor Port to submit a pre-qualification application for the design, building, financing, operating and transfer of a clean bulk cargo terminal for Karachi Port, Pakistan. (The Edge)

LKL International: Inks two distribution agreements for Taiwanese medical devices. LKL International has clinched two agreements to distribute medical appliances from a Taiwan-based company in Malaysia. Medik Gen will distribute BenQ’s medical display devices, related spare parts and software, and Lily’s disposable medical devices and related spare parts. (The Edge)

Dataprep: To collaborate with Indonesian company on ICT ventures. Dataprep Holdings is to collaborate with an Indonesian company, PT Asia Pelangi Remiten, to look at areas of collaboration in the information and communication technologies (ICT) field. The group inked a Memorandum of Collaboration (MoC) with PT Asia that is set to last for five years. (The Edge)

MyNews: Bag artwork was in public domain. MyNews Holdings said the bag artwork at the heart of a legal suit between two artists and the company and its subsidiary, was in the public domain with no copyright notice attached. The group’s ED and CEO Dang Tai Luk said the artwork in question which was displayed on bags sold at its convenience store last Oct was published on Nov 23, 2007 with no reference to the author or creator of the artwork, and/or the plaintiffs Shamsaimun Ezil and Amir Hamzah Hashim as the purported copyright owners of the artwork. (The Edge)

Peterlabs: Shareholders want director out. Two of Peterlabs Holdings’ shareholders are seeking to remove Lau Kin Wai as director. It said it received a notice of requisition from shareholders Kho Siaw Sua and Chan Bee Chuan, who hold a combined stake of 2.5%, seeking to pass the resolution to remove Lau at the company’s forthcoming AGM. No reason was given for the request to remove Lau. He has been given seven days to make any oral or written representation in compliance with Section 207 of the Companies Act 2016. (SunBiz)

Market Update

The FBM KLCI might open with a positive note today after US stocks closed higher Friday after a series of strong bank earnings, led by JPMorgan, boosted confidence in the US economy while the Dow Jones Industrial Average rose nearly 270 points. The Dow Jones Industrial Average gained 269.25 points, or 1%, to end at 26,412.30, while the S&P 500 index rose 19.09 points, or 0.7%, to finish at 2,907.41. The Nasdaq Composite Index advanced 36.80 points, or 0.5%, to close at 7,984.16. For the week, while the S&P 500 gained 0.5% and the Nasdaq added 0.6% while the Dow edged down 0.1%. European stocks, meanwhile, saw muted moves, with the Stoxx Europe 600 up 0.2%.

Back home, the FBM KLCI index gained 5.94 points or 0.37% to 1,630.17 points on Friday. Trading volume decreased to 3.26bn worth RM2.08bn. Market breadth was negative with 399 gainers as compared to 411 losers. Hong Kong’s Hang Seng Index gained 0.2%, while the Shanghai Composite Index ended with a slight loss of less than 0.1%. Japan’s Nikkei 225 rose 0.7%.

Source: PublicInvest Research - 15 Apr 2019