Economy

US: Initial jobless claims decline to fresh pandemic low. Applications for US state unemployment insurance fell last week to a fresh pandemic low, signaling steady improvement in the job market as remaining business restrictions are lifted. Initial claims in regular state programs decreased by 34,000 to 444,000 in the week ended May 15. The median estimate of economists called for 450,000 applications. (Bloomberg)

EU: Construction output increases in March. Eurozone's construction output rose in March after falling in the previous month, data form Eurostat showed. The construction output grew 2.7% MoM in March, after a 2% fall in Feb. In Jan, construction output increased 0.7%. Production in building construction grew 1.3% monthly in March and output in civil engineering gained 9.4%. (RTT)

EU: Current account surplus narrows in March. The euro zone’s current account surplus narrowed in March on a drop in the surplus from the trade of goods and services, European Central Bank data showed. The bloc of 19 countries sharing the euro recorded an adjusted current account surplus of EUR17.8bn in March, down from EUR25.9bn in Feb but up from the EUR10.4bn registered a year earlier, according to adjusted figures. Based on unadjusted data, the surplus widened to EUR31.0bn from EUR13.2bn. (Reuters)

EU: Germany producer prices rise most since 2011. Germany's producer prices increased at the fastest pace in nearly a decade in April, Destatis reported. Producer prices increased 5.2% YoY in April, faster than the 3.7% rise seen in March. Economists had forecast an annual growth of 5.1%. This was the biggest growth since Aug 2011, when prices rose similarly after the financial and economic crisis. (RTT)

UK: Consumers regain pre-Covid confidence level - GfK. British consumers are their most upbeat since the start of the coronavirus pandemic, buoyed by growing optimism about the economy as lockdown restrictions are lifted, a survey showed. The GfK Consumer Confidence Index improved to -9 in May from -15 in April, matching its level in March 2020 before the full force of the coronavirus pandemic hit the country. (Reuters)

UK: Factories boom but bottlenecks pushing up prices - CBI. British manufacturers reported the fastest growth in orders since Dec 2017 in May but fear supply-chain bottlenecks will cause their costs to rise sharply, according to a survey which adds to signs of a rebound for factories. The Confederation of British Industry’s industrial orders balance rose to +17 from -8 in April. Overall output growth over the past three months was the highest since Dec 2018 and represented the first material growth in almost two years. (Reuters)

Japan: Exports jump most in decade as trade recovery perks up. Japan’s exports grew the most since 2010 in April while capital spending perked up on surging global demand for cars and electronics, lifting hopes that an improvement in trade could help lead the world’s third-largest economy back to growth. (Reuters)

South Korea: Producer prices rise 0.6% in April. Producer prices in South Korea were up 0.6% on month in April, the Bank of Korea said, slowing from the upwardly revised 1.1% increase in March (originally 0.9%). Individually, prices for agricultural, forestry and marine products sank 2.9% on month, while prices for manufacturing products climbed 1.1%, utilities rose 0.6% and services were up 0.3%. (RTT)

Hong Kong: Jobless rate declines in April. Hong Kong's unemployment rate decreased in April, the labor force statistics from the Census and Statistics Department showed. The unemployment rate fell to a seasonally adjusted 6.4% in three months to April from 6.8% in three months to March. The underemployment rate decreased to 3.3% from 3.8% in the preceding period. (RTT)

Indonesia: Exports surge in April on higher commodity prices. Indonesia’s exports racked up their strongest rise in 11 years in April, boosted by a surge in prices of key commodities such as palm oil and copper, though the unexpectedly robust figure is not expected to change the central bank’s policy settings. (Reuters)

Markets

Sarawak Cable: Disposes helicopter for RM35m . Sarawak Cable (SCB) is selling a helicopter to Rotortrade Services Pte Ltd for RM35.18m cash. Its wholly-owned subsidiary, Aerial Power Lines SB (APL), signed an agreement to dispose of the aircraft to the Singapore-incorporated helicopter distributor on April 2, SCB said. The company said the proposed disposal was part of the group’s asset rationalisation programme, which would reduce its gearing level as the relevant bank borrowings for the aircraft would be pared down substantially. (Bernama)

Genetec: Secures RM41m in new orders from existing customers . Genetec Technology has secured RM41.2m in new orders from existing customers. The group said RM35.3m of the orders comes from electric vehicle and battery players, and RM5.9m from hard disk drive, electronics and semiconductor players. The tenure of the projects normally ranges from three to nine months, depending on the size of the order and time frame specified by customers, it said. (The Edge)

Econpile: Bags RM64.25m piling and foundation works . Econpile Holdings announced that today it has received a piling and foundation works award for a service apartment project along Jalan Raja Chulan for RM64.25m. It involves the design, construction and completion for Package 1 – Secant Bored Pile Wall and Package 2 – Foundation Bored Pile and B2/B1/Level 1 Slab for a mixed development comprising an office tower with a two-storey basement carpark and a service apartment block with podium car park at Lot 297 and Lot 20016, Seksyen 63, Jalan Raja Chulan, Kuala Lumpur. (The Edge)

Globaltec: O&G unit to secure approval to develop Tanjung Enim block in Indonesia . Globaltec Formation said that its Australia-listed subsidiary NuEnergy Gas Ltd is expected to obtain approval from the Indonesian government to develop its Tanjung Enim block in South Sumatera. The approval is proposed to be granted by the Indonesian government via its agency the Special Task Force for Upstream Oil and Gas Business Activities (SKK Migas) on June 17, said Globaltec. (The Edge)

Eka Noodles: Trading of shares to be suspended on May 31, delisting may follow. Trading of shares in rice and sago sticks manufacturer Eka Noodles will be suspended from May 31, after Bursa Malaysia Securities rejected its application for a further extension of time to submit its revised proposed regularisation plan. Following the suspension, Eka Noodles will be delisted on June 2, unless an appeal against the delisting is submitted before May 28. (The Edge)

M3 Technologies: Two substantial shareholders of M3 Tech file suit to block corporate exercise . M3 Technologies (Asia) said two shareholders have filed a lawsuit to stop the mobile services provider from undertaking an employees share option scheme (ESOS) or any other corporate exercise that will serve to dilute their shareholding. The two substantial shareholders are Lim Seng Boon, who stepped down as the group's managing director three months ago, and Voon Sze Lin. They have a combined shareholding of 13.5% in M3 Tech, with Lim controlling a 7.4% stake and Voon holding a 6.15% stake. (The Edge)

Market Update

The FBM KLCI might open higher today as positive US jobs data helped boost global stocks on Thursday, a day after markets were roiled by a sell-off in cryptocurrencies and hints that central bank policymakers were contemplating winding down crisis-era support. The S&P 500 closed 1% higher, snapping a three-day losing streak. The tech-focused Nasdaq Composite bounced back 1.8%. Europe’s continent-wide Stoxx 600 index closed up 1.3% while London’s FTSE 100 ended the session 1% higher. Applications for unemployment aid in the US fell to a pandemic-era low last week, according to labour department data released on Thursday, indicating that lay-offs continued to slow as some states prepared to stop offering supplemental benefits. The brighter news also came after Wednesday’s minutes from the Federal Reserve, which indicated that some policymakers thought the conversations about scaling back the central bank’s $120bn in monthly bond purchases would need to begin as the recovery from the pandemic gained momentum.

Back home, the KLCI fell 0.33% or 5.2 points to settle at 1,575.32, a near two-month low, after moving between 1,570.32 and 1,585.32. The regional markets finished mixed with the Shanghai Composite gained 1.14%, while the Nikkei 225 led the Hang Seng lower. They fell 2.07% and 0.27% respectively.

Source: PublicInvest Research - 21 May 2021