Economy

UK: BoE mostly unfazed by inflation omens. A short-term rise in prices in Britain caused by global supply chain pressures does not foreshadow longer-term inflation problems once the economy emerges from the coronavirus pandemic, Bank of England (BoE) Governor Andrew Bailey said. Britain's inflation rate jumped to 1.5% in April from 0.7% in March, due to a mix of higher oil prices, rises in regulated household energy bills and comparisons against weak prices a year ago during the depths of the pandemic. (Reuters) 

UK: Johnson’s plan to open UK economy gets boost from vaccine data. Boris Johnson’s plan to unlock the UK economy appears on track after data showing Covid vaccines are effective against a worrying variant boosted the government’s confidence in its proposed roadmap. The success of the nation’s vaccine program, which has now seen over 60m jabs given out, is a key plank of the government’s goal to fully remove restrictions by June 21. There had been concerns the emergence of the new variant could blow that plan off course.. (Bloomberg)

Taiwan: Jobless rate falls in April. Taiwan's unemployment rate decreased marginally in April, data from the Directorate General of Budget, Accounting and Statistics showed. The unemployment rate fell to a seasonally adjusted 3.71% in April from 3.72% in March. On an unadjusted basis, the jobless rate declined to 3.64% in April from 3.67% in the prior month. The number of unemployed persons decreased to 435,000 in April from 439,000 in the previous month. The labor force participation rate fell marginally to 59.15% in April from 59.14% in the preceding month. (RTT)

Taiwan: Industrial production growth moderates in April. Taiwan's industrial production growth moderated in April, data from the Ministry of Economic Affairs showed. Industrial production advanced 13.62% YoY in April, slower than the 16.06% increase seen in March. Likewise, manufacturing output growth slowed to 14.24% from 17.24% in the previous month. Mining and quarrying grew 5.13% and electricity and gas supply output gained 7%. Meanwhile, water supply output was down 2.42%. On a monthly basis, industrial production decreased by seasonally adjusted 1.27% in April. (RTT)

South Korea: Consumer confidence hits 3-year high as recovery quickens. South Korea’s consumer confidence strengthened to a high of almost three years in May, fueling optimism that the economy is on track for a strong recovery from the pandemic slump. The consumer sentiment index rose for a fifth straight month to reach 105.2, the highest since June 2018, the Bank of Korea said. The improvement was driven by stronger-than-expected economic growth in the first quarter, a positive exports performance, progress in vaccinations and better jobs data, according to the central bank. Alongside a 53% surge in exports so far this month, the stronger sentiment reading will likely figure among recent data the BoK board will review for its rate decision and growth projections. (Bloomberg)

Singapore: Inflation increases in April. Singapore's consumer prices rose in April, data from the Monetary Authority of Singapore and the Ministry of Trade and Industry showed. The consumer price index rose 2.1% YoY in April, following a 1.3% increase in March. Economists had expected a 2.0% rise. This latest consumer prices outcome was largely due to a rise in core inflation, prices for private transportation and accommodation cost. MAS core CPI, which excludes costs of accommodation and private road transport, grew 0.6% annually in April, following a 0.5% increase in the preceding month. (RTT)

Thailand: Says its tourism industry may not recover until 2026. It could take another five years before tourism revives fully in Thailand. The sector, which contributed about one-fifth of Thailand’s economy before the pandemic, isn’t expected to return to normal until 2026, the National Economic and Social Development Council said, citing the Tourism Authority of Thailand. The delayed return will impact more than 7m workers, some of whom may need to find jobs in other fields, the council said. (Bloomberg)

Markets

Media (Neutral): The Intellectual Property High Court has declared that the sale and distribution of TV boxes or illicit streaming devices (ISD) constitutes a copyright infringement. (The Edge)

Comments: This decision, considered to be the first by the court, is positive for industry players like Astro and Media Prima in their battle against digital piracy in Malaysia. Setting a precedent for future civil claims on copyright infringement against ISD sellers, this could help to reduce if not eradicate content piracy. Illegal activities have resulted in local creative industry suffering huge losses in revenue every year. Astro has estimated the industry’s revenue loss at RM3bn annually due to piracy. Although we believe this is a step in the right direction, enforcement remains a concern. We maintain our Neutral call on the media sector.

Bioalpha: Inks deal to supply health products to 201 Felda's D'Mart stores. Bioalpha Holdings signed a joint venture (JV) agreement with RS Unggul SB (RSU) for the issuance of 4.9m new ordinary shares in RS Bio SB (RBSB). Upon completion of the allotment of new RBSB shares, Bioalpha shall hold 51% stake. (BTimes)

Pimpinan Ehsan: Buys renewable energy firm for RM373m. Pimpinan Ehsan is acquiring the entire stake in renewable energy company, reNIKOLA Holdings SB for RM373m. The proposed acquisition provided the company an immediate entry point into the renewable energy industry given the expansive track record and large-scale solar assets. (BTimes)

MyEG: To offer Covid-19 breath test product. MY EG Services (MyEG) has formed a partnership with Singapore's Breathonix Pte Ltd to introduce a rapid breath test system for the screening of the Covid-19 virus in Malaysia. Upon completing, MyEG will be appointed as Breathonix's exclusive distribution partner to undertake the commercial sale and marketing of its technology and associated systems in Malaysia. (BTimes)

KNM: Proposes private placement to raise RM168m to repay borrowings. KNM Group has proposed a private placement of up to 987.52m new shares, representing 30% of its share capital, to raise RM167.9m in proceeds for the purpose of repaying its bank borrowings. Up to 493.75m or 50% of the placement shares will be placed out to its executive vice chairman and major shareholder, Gan Siew Liat. (The Edge)

KPower: Seeks RM100m via private placement to fund its solar and mini hydro projects. KPower has proposed a private placement of RM100m as the group seeks funding for its recently secured solar power and mini hydro power projects. The shares will be placed to third party investors at an issue price that will be fixed later. (The Edge)

Nylex: To dispose of terminal assets for RM25.7m. Perusahaan Kimia Gemilang (Vietnam) Co Ltd which is a wholly owned unit of Nylex (Malaysia) has entered into a sale and purchase agreement of assets with TOP Solvent (Vietnam) LLC (TSV) for the disposal of terminal assets currently owned by PKGV for USD6.25m (RM25.7m). (Bernama)

Market Update

The FBM KLCI might open with a positive note today as Wall Street looked past last week’s crypto currency jitters to send stocks higher on Monday, led by the technology sector. Tech shares were the top performers on the S&P 500, propelling the blue-chip benchmark to close 1% higher, while the tech-focused Nasdaq Composite index gained 1.4%. Energy stocks also climbed after Goldman Sachs forecast Brent crude, which leapt 3%to $68.45 a barrel on Monday, would reach $80 this year as economies recovered from the pandemic. Wall Street was rattled last week by the prospect that a crypto currency rout could ripple into other asset classes. In Europe, the pan-continental Stoxx Europe 600 ticked up 0.1%.

Back home, the FBM KLCI staged a relief rally, breaking a three day losing streak. The benchmark index climbed 9.65 points or 0.62% to close at 1,571.82, as investors look for oversold counters following the recent sell-down. Elsewhere in region, Japan's Nikkei 225 rose 0.17%, South Korea's Kospi fell 0.38%. In China, Hong Kong’s Hang Seng Index inched down 0.16% and the Shanghai Stock Exchange Composite Index closed up 0.31%.

Source: PublicInvest Research - 25 May 2021