Economy

US: Job openings jump to fresh record high in April. US job openings surged by nearly one million to a new record high in April, while more people voluntarily left their employment, strengthening the view that a recent moderation in job growth was due to supply constraints. Job openings, a measure of labor demand, increased by 998,000 to 9.3m on the last day of April, the highest level since the series began in December 2000, the Labor Department said in its monthly Job Openings and Labor Turnover Survey (JOLTS) report. Hiring was little changed at 6.1m in April from 6.0m in the prior month. The government reported last Friday that job growth picked up in May, with employers raising wages. (Reuters)

US: Trade deficit narrows in April as imports fall. The US trade deficit retreated from a record high in April amid a decline in imports, suggesting domestic demand was starting to revert back to services from goods. With at least half of the American population fully vaccinated against Covid-19, authorities across the country are lifting virus-related restrictions on businesses, boosting demand for services like travel. Demand shifted towards goods, with Americans cooped up at home, at the height of the pandemic. (Reuters)

US: Small business optimism slips on hiring, inflation worries – NFIB. US small-business confidence edged lower last month, the first decline in four months, as a nationwide labor shortage and inflation worries weighed on business owners’ economic outlook, according to a survey released. The National Federation of Independent Business (NFIB) Optimism Index fell 0.2 point to a reading of 99.6 in May after three straight monthly increases. Five of the 10 index components improved, three declined and two were unchanged. (Reuters)

EU: GDP falls less than estimated in 1Q. The euro area economy shrank less than previously estimated in 1Q, revised data from Eurostat showed. GDP fell 0.3% sequentially in 1Q, following a 0.6% drop in 4Q. The decline for the 1Q was revised down from -0.6%. YoY, GDP declined 1.3% versus a 4.7% fall in the previous quarter. According to previous estimate, GDP was down 1.8%. The expenditure-side breakdown showed that household spending dropped 2.3% QoQ and government spending remained flat in 1Q. Meanwhile, gross fixed capital formation grew 0.2%. (RTT)

EU: German industrial production drops unexpectedly in April. Germany's industrial production logged an unexpected decline in April, data from Destatis revealed. Industrial output dropped 1% on a MoM basis in April, reversing a revised 2.2% rise in March. Economists had forecast an increase of 0.5%. On a YoY basis, the growth in industrial production surged to 26.4%. Compared with Feb 2020, the month before restrictions were imposed due to the corona pandemic, production was 5.6% lower in seasonally and calendar adjusted terms in April. (RTT)

EU: German investor morale falls but strong recovery still expected. Investor sentiment in Germany fell in June but remained at a high level and expectations for a strong economic recovery for the next six months are intact, a survey showed. The ZEW economic research institute said its survey of investors’ economic sentiment fell to 79.8 points from 84.4 in the previous month. A Reuters poll had forecast a rise to 86.0. A separate ZEW gauge of current conditions surged to -9.1 points from -40.1 the previous month. (Reuters)

UK: BRC retail sales increase in May. UK retail sales increased notably in May driven by the relaxation of restrictions related to the coronavirus pandemic, data from the British Retail Consortium, or BRC, showed. Total sales grew 10% YoY in May and like-for-like sales climbed 23.7%. "Retail sales were buoyant in May thanks to the reopening of hospitality, coupled with the afterglow of non-essential retail's own return," BRC said. Pent-up demand for the instore shopping experience, as well as the first signs of summer weather, helped retail to the strongest sales growth of the pandemic, BRC added. (RTT)

Taiwan: Inflation rises more than expected in May. Taiwan's consumer price inflation rose more than expected in May on higher fuel prices, data released by the Directorate General of Budget, Accounting & Statistics revealed. Consumer prices rose 2.48% YoY in May, faster than the 2.1% increase in April. This was faster than the 2.2% increase expected by economists. This was the fastest rate since February 2013, when prices rose 2.97%. The indices for fuels and lubricants surged 43.92% due to a relatively lower comparison base and the index for transportation fees rose 15.61%. (RTT)

Markets

KLK (Neutral, TP: RM25.51): Said to take over IJM Plantations via cash or share swap deal; both stocks suspended . IJM Plantations and Kuala Lumpur Kepong (KLK) have requested for suspension of trading of their shares, pending an announcement. It is learnt that KLK is making an offer to take over IJM Plantations. Shareholders of IJM Plantations will be given the option of either a cash offer or share swap. According to sources, the takeover deal is valuing IJM Plantations in the range of RM2.50 to RM2.70 per share. (The Edge)

Lay Hong: To buy balance 50% stake in poultry and mini market firm for RM28m . Lay Hong (LHB) has proposed to acquire the remaining 50% stake in Sri Tawau Farming Sdn Bhd (STF) it does not already own for RM28m in a related party deal. STF is involved in poultry farming and mini-market operations, LHB said. (The Edge)

See Hup: Bags RM91m ECRL job . See Hup Consolidated’s 51% owned unit, SH Moment Builder SB (SHM) has won a RM91.30m contract from China Communications Construction (ECRL) SB. The company said the contract entails the construction and completion of part of the subgrade works of Package 2, Section 4 for the East Coast Rail Link project. (Bernama)

Berjaya Corp: Disposes entire stake in Peugeot dealership to Bermaz, other shareholders . Berjaya Corp (BCorp) has disposed its entire 51% stake in Peogeot distributor Berjaya Auto Alliance SB (BAASB) for RM6.67m cash to other minority shareholders including Bermaz Auto. The deal will increase Bermaz's stake in BAASB to from 20% to 55%. (StarBiz)

Microlink: JV eyes overseas ICT projects . Microlink Solutions (Microlink) has formed a strategic JV with Danapuri SB, a member of the Dipon Group of Bangladesh, to pursue digital transformation projects in selected target territories. The company said the JV would leverage the extensive expertise of Danapuri and the wider Dipon Group in information and communications technology (ICT) project investment and management, eGovernment, eCommerce, ePayment and eFinancial services implementation. (Bernama)

BHIC: Inks MoU with Airbus Defence and Space on MRO facilities . Boustead Heavy Industries Corporation (BHIC) has inked a MoU with Airbus Defence and Space as the latter seeks to explore the joint development of military aircraft maintenance, repair and overhaul (MRO) capabilities in Malaysia. BHIC said under the partnership agreement, the two partners will collaboratively look into how to leverage their respective expertise to advance local MRO capabilities for military fixed wing aircraft platforms. (The Edge)

Yinson: Yinson and Singapore's SMRT co-invest in autonomous vehicle start-up MooVita . Yinson Holdings has entered into a deal with Singapore's SMRT Corp Ltd's corporate venture arm to co-invest an undisclosed amount in an autonomous vehicle start-up named MooVita Pte Ltd. Yinson said the co-investment with SMRT Ventures aims to accelerate the development, commercialisation and international expansion of MooVita's driverless solutions, beginning with the deployment of safe and comfortable driverless solutions for public transportation and the urban environment. (The Edge)

Market Update

The FBM KLCI might open higher today after the S&P 500 ended slightly higher Tuesday, pushing the index to its third-highest close on record, after a trading day marked by narrow swings between gains and losses. The broad benchmark index climbed 0.74 point, or less than 0.1%, to close at 4,227.26—putting it 0.1% away from a fresh record. The Nasdaq Composite also rallied, climbing 43.19 points, or 0.3%, to 13,924.91. That marked the index’s third consecutive session of gains thanks to a Tuesday rebound in technology and growth stocks including Amazon.com,Apple and PayPal. The Dow Jones Industrial Average, in contrast, fell 30.42 points, or 0.1%, to 34,599.82. Bitcoin prices also continued to slide. One factor behind the fall was a concern about stricter oversight and involvement by regulators in cryptocurrencies. In Europe, the pan-continental Stoxx Europe 600 rose 0.1%, settling at a fresh all-time high.

Back home, the FBM KLCI gained on selective buying support, in contrast to regional markets which closed lower. The index ended 9.51 points or 0.6% higher at 1,587.96, supported by gains in counters like Gentling Malaysia Bhd (GenM), CIMB Group Holdings Bhd and Hap Seng Consolidated Bhd. In the region, Hong Kong's Hang Seng Index fell 0.02%, the Shanghai Composite finished 0.54% lower at 3,580.11, Japan's Nikkei 225 declined 0.19% and Singapore's Straits Times Index closed 0.27% down at 3,167.20.

Source: PublicInvest Research - 9 Jun 2021