Economy

US: Housing starts pull back sharply from 14-year high in Jan. After reporting a sharp increase in new residential construction in the US in the previous month, the Commerce Department released a report showing housing starts pulled back by much more than expected in the month of Jan. The housing starts tumbled by 6% to an annual rate of 1.580m in Jan after soaring by 8.2% to an upwardly revised rate of 1.680m in Dec. The upwardly revised rate seen in Dec reflected the highest annual rate of housing starts since Sept of 2006. The steep drop in housing starts came as single-family starts plunged by 12.2% to a rate of 1.162m. (RTT)

US: Import prices jump 1.4% in Jan amid higher fuel prices. The Labor Department released a report showing US import prices increased by more than expected in the month of Jan. The import prices surged up by 1.4% in Jan after climbing by an upwardly revised 1% in Dec. The bigger than expected increase in import prices came as prices for fuel imports spiked by 7.4% in Jan after soaring by 8.1% in Dec. The report said prices for non-fuel imports climbed by 0.8% in Jan after rising by 0.4% in Dec. Meanwhile, the export prices shot up by 2.5% in Jan after spiking by an upwardly revised 1.3% in Feb. (RTT)

US: Weekly jobless claims far exceed economist estimates. First time claims for US unemployment benefits came in well above economist estimates in the week ended Feb 13th, according to a report released by the Labor Department, with claims rising from a significantly upwardly revised level. (RTT)

EU: Consumer confidence improves in Feb. Eurozone consumer confidence improved slightly in Feb, after easing in the previous month, preliminary figures from the European Commission showed. The flash consumer confidence index climbed to -14.8 from -15.5 in Jan. Economists had expected a score of -15. The corresponding indicator for EU rose to -15.7 from -16.5 in the previous month. The indicator continued to remain well below its long-term average of -11.1 for the euro area and -10.6 for EU. (RTT)

EU: ECB policymakers still see need for ample stimulus - Minutes. European Central Bank policymakers continued to assess that there was a case for maintaining ample stimulus and stressed that measures that were put in place in Dec should be given time to take full effect, the minutes of the latest policy meeting showed. During the Jan 20-21 meeting, an argument was put forward that monetary policy should keep a steady hand. Rate-setters also agreed that that there was no room for complacency though there were signs of recovery gaining speed on roll-out of vaccinations against the coronavirus pandemic. (RTT)

UK: Risks jobless recovery from covid crisis, BOE official says. The UK economy risks a jobless recovery from the coronavirus, with surging GDP and lingering unemployment, a policy maker at the Bank of England said. Michael Saunders, a member of the central bank’s Monetary Policy Committee, said the pandemic has gone on longer than anticipated and is hurting the finances of businesses and households. The remarks indicate divisions at the central bank about the strength of the recovery and confirm some of the concerns raised by the Resolution Foundation, which hosted the event. (Bloomberg)

China: Holiday consumption withstands travel restrictions. Sales of luxury goods in China have been stronger than mass-market products since the pandemic, reflecting restrictions on overseas travel and a stronger recovery in wages for high-earners. Chinese consumers splurged on restaurants, online sales and movies over the Lunar New Year holiday as travel restrictions made it difficult for many of them to make their annual trips home. (Bloomberg)

Hong Kong: Jobless rate rises in Jan. Hong Kong's unemployment rate rose in Jan, the labor force statistics from the Census and Statistics Department showed. The unemployment rate rose to a seasonally adjusted 7.0% in three months to Jan from 6.6% in three months to Dec. The underemployment rate increased to 3.8% from 3.4% in the preceding period. The number of unemployed persons increased by around 7,500 to 253,300 in Nov to Jan. Over the same period, the number of underemployed persons also increased by around 14,400 to 148,200. (RTT)

Indonesia: Central bank cuts rates, eases lending rules to boost coronavirus-hit economy. Indonesia’s central bank cut interest rates for a sixth time during the pandemic and eased lending rules in a bid to boost the coronavirus-hit economy as it downgraded its 2021 growth forecast. Bank Indonesia (BI) cut the benchmark 7-day reverse repurchase rate by 25 basis points to a new record low of 3.50%, as expected by a majority of analysts in a in a poll. (Reuters)

Thailand: Jan domestic car sales tumble 21.3% y/y after virus outbreak. Domestic car sales in Thailand slumped 21.3% in Jan to 55,208 vehicles from a year earlier, snapping two months of gains, hurt by a new wave of coronavirus infections late last year, the Federation of Thai Industries (FTI) said. The virus outbreak emerged in the middle of Dec, when car sales rose for a second month, up 11.3% YoY. (Reuters)

Markets

Coastal Contracts: In joint venture to undertake Mexico gas sweetening plant project. Coastal Contracts has formed a JV with its Mexican business partner Grupo Empresarial Alfair S.A.P.I. de C.V. to undertake an onshore gas sweetening plant project in Mexico for Petroleos Mexicanos (Pemex), via its wholly owned unit Coastal Marine Pte Ltd. (CMPL). The JV company will be held on a 50:50 basis by the CMPL and Alfair. (SunBiz)

Yi Lai: Gets Bursa's nod for bonus issue exercise. Yi-Lai has received Bursa Malaysia's approval for bonus issue of up to 97.04m shares. The bonus issue is on the the basis of two bonus shares for every three exiting Yi-Lai shares held on an entitlement date to be determined later. (Business Times)

MISC: 4Q earnings up more than twofold on higher share of profits from joint ventures, associates. MISC saw net profit more than double to RM556m in the 4QFY20, mainly due a higher share of profit from joint ventures and associate of RM252.7m from the recognition of a one-time gain from a contract extension. The group’s board has approved a fourth taxexempt dividend of 12 sen per share, which will be paid on March 16, 2021. (SunBiz)

Heineken Malaysia: 4Q net profit falls 41% to RM54m, declares 51 sen dividend. Heineken Malaysia posted a 40.6% decline in its net profit to RM54.2m for the 4QFY20, from RM91.2m recorded in the previous year, due to lower sales as its business was impacted by the government's implementation of wider restrictions and stricter standard operating procedures to curb the spread of Covid-19. Meanwhile, it declared a first and final single tier dividend of 51 sen per share, to be paid on July 28, 2021, the lowest in 10 years. (The Edge)

Carlsberg: 4Q net profit drops 45% on lower on-trade consumption. Carlsberg Brewery Malaysia reported a net profit of RM37.95m in the 4QFY20, a 45% drop from RM69m a year ago as the group’s operations continued to recover from the impact of Covid-19. Revenue was affected by significantly lower on-trade consumption and the later timing of Chinese New Year trade-loading in the 4Q. The group declared an interim dividend of 10 sen per share together with a final dividend of 30 sen, to be paid on April 12 and July 9 respectively. (The Edge)

ELK-Desa: Posts lower earnings, aims to drive hire purchase segment growth. ELK-Desa Resources net profit fell 3.7% to RM9.1m for the 3QFY21 from RM9.4m last year. It said its group's revenue also dipped to RM37.2m in 3Q due to lower contribution from hire-purchase segment. (Business Times)

IPO: Tuju Setia receives SC's nod for main market listing. Tuju Setia has received Securities Commission Malaysia's (SC) approval to be listed on the main market of Bursa Malaysia Securities. MD Wee Eng Kong said as a main contractor, Pembinaan Tuju Setia SB (PTS) has a diverse portfolio in the construction of commercial, residential and institutional buildings, with core expertise in high-rise buildings. (Business Times)

Market Update

The FBM KLCI might open with a negative bias today, tracking US stocks which fell after a sell-off in US government debt sparked by expectations that Joe Biden’s $1.9tn stimulus push will stoke higher levels of inflation rippled across Wall Street on Thursday. US stocks notched their first three-day losing streak this year, with the blue-chip S&P 500 index closing lower by 0.4%. The technology-focused Nasdaq Composite had larger losses, slipping 0.7%. Thursday’s declines were broad, with energy, technology and industrial companies leading the way lower. In Europe, the regional Stoxx 600 equity index closed down 0.8% and the UK’s FTSE 100 fell 1.4%.

Back home, the FBM KLCI gave up early gains to close 1.22% lower, mirroring the fall in most regional bourses. At 5pm, the benchmark FBM KLCI dipped 19.45 points to 1,575.84 from 1,595.29 at Wednesday’s close. Major Asian markets were mixed. The Shanghai Composite Index gained 0.6%, while Japan’s Nikkei 225 slipped 0.2% and Hong Kong’s Hang Seng lost 1.6%.

Source: PublicInvest Research - 19 Feb 2021