Global: Economy set for fastest recession recovery in 80 years, says World Bank. The global economy is set for the fastest recovery from recession for more than 80 years, but poor nations are at risk of falling further behind wealthy countries amid slow progress with the Covid-19 vaccine, the World Bank has said. In its half-yearly outlook report, it said the world economy was forecast to grow at 5.6% this year, in a sharp upgrade from previous estimates it made in January for growth of 4.1%. It said this would mark the fastest post-recession recovery in 80 years, fuelled by growth in a few major economies where rapid progress with the Covid-19 vaccine has enabled a faster return to relative normality. However, developing nations will continue struggling with the virus and its aftermath for longer, worsening divisions between rich and poor nations. (The Guardian)
US: Wholesale inventories rise solidly, supply constraints loom. US wholesale inventories increased strongly in April as businesses replenished stocks to meet pent-up demand, but supply constraints could make it harder to maintain the current pace of inventory rebuilding. The Commerce Department said that wholesale inventories rose 0.8% as estimated last month. Stocks at wholesalers advanced 1.2% in March. Wholesale inventories increased 5.2% YoY in April. Inventories are a key part of GDP. Manufacturers are battling shortages of raw materials and labor in the wake of pent-up demand unleashed by the reopening of the economy as vaccinations ease Covid-19’s intensity. The supply constraints are underscored by a global semiconductor shortage, which is undercutting motor vehicle production as well as output of electrical equipment, appliances and components, raising prices and hurting sales of these goods. (Reuters)
US: Mortgage applications decline with a drop in refinancing - MBA. US applications for home mortgages declined last week as refinancing dropped to its lowest level since February 2020 with fewer homeowners able to take advantage of lower rates during a holiday shortened week. The Mortgage Bankers Association (MBA) said its seasonally adjusted market index fell 3.1% in the week ending June 4 from a week earlier. This reflected a 5.1% decline in applications for refinancing and was 27% lower than the same week one year ago. The purchase index increased 0.3% from a week earlier. (Reuters)
EU: Germany exports growth slows more than expected. Germany's exports growth eased more-than-expected in April and imports dropped for the first time in three months, data released by Destatis revealed. Exports rose only 0.3% MoM in April, after a 1.3% rise in March. Economists had forecast a monthly growth of 0.5%. Meanwhile, imports declined 1.7% in April reversing a 7.1% rise in the previous month. This was bigger than the economists' forecast of - 1.1%. As a result, the trade surplus rose to EUR15.9bn in April from EUR14bn in March. (RTT)
China: Factory inflation at 2008 high adds to global pressures. Surging costs of imported commodities drove China’s factory-gate inflation to its highest level since 2008, raising the odds that exporters will begin passing on higher prices and boost inflationary pressures in the global economy. The producer price index climbed 9% YoY in May, driven by price increases for oil, metals and chemicals, the National Bureau of Statistics said. The median forecast in a Bloomberg survey of economists was for an 8.5% increase. Consumer inflation increased only 1.3% YoY. (Bloomberg)
South Korea: 1Q GDP up 1.7% from previous quarter, ticks up from earlier estimate. South Korea's economy expanded by a seasonally adjusted 1.7% in 1Q, revised central bank data showed, a notch above the 1.6% growth estimated in late April. Towing the growth were private consumption and facilities investment that grew 1% and 6.1% QoQ, respectively. 1Q growth for facilities investment was the sharpest in nine years. Construction investment was sharply revised up to 1.3% growth, from a 0.4% gain estimated earlier, while exports jumped 2.0%, better than a 1.9% rise reported earlier. From a year earlier, the economy grew a revised 1.9% during the period, better than the 1.8% expansion seen previously. (Reuters)
Australia: Consumer sentiment slugged by Victoria coronavirus shutdown. Australian consumer sentiment fell for a second month in June as a coronavirus lockdown in Victoria state darkened the mood despite signs of strength across the economy. The Westpac Melbourne Institute index of consumer sentiment released fell 5.2% in June, on top of a 4.8% drop the month before. That left the index up 14.5% on June last year when the country was emerging from a round of nationwide lockdowns. The index reading of 107.2 showed optimists still outnumbered pessimists, although the margin was narrowing. “The latest fall in June is almost certainly due to concerns around the two-week lockdown in Melbourne,” said Westpac chief economist Bill Evans. (Reuters)
Greatech (Outperform, TP: RM6.80): Earnings will not be affected by issues at Lordstown Motors . Greatech Technology said its earnings will not be affected by issues faced by its client Lordstown Motors Corp, which reportedly will not be able to commence full commercial production and there are doubts over whether it could continue as a going concern through the end of the year. Greatech ED and CEO Tan Eng Kee told theedgemarkets.com that the group will not be affected by the issues at the US-based electric truck start-up, adding that Greatech still expects to meet its targets for 2021 and 2022. He said that Greatech has communicated with Lordstown Motors, and that the latter said it would try to raise funds for commercial production. (The Edge)
Handal: Announces new contract wins . Handal Energy has announced two new contracts secured by its subsidiaries for the provision of services. Handal's 51%-owned subsidiary Borneo Seaoffshore Engineering SB has secured a contract from PTT Exploration and Production (PTTEP) for the provision of 2021 Sarawak turnaround management and coordination services. (StarBiz)
KAB: Secures RM11.4m solar photovoltaic systems projects in Thailand . Kejuruteraan Asastera Bhd's (KAB) indirect subsidiary Energy Optimization (Thailand) Co Ltd has secured four new projects in Thailand with a combined installed capacity of 3,912KW peak solar photovoltaic systems under the build-own-operate-transfer model. The group said in a statement that the contracts have a combined capex of about RM11.4m and are expected to be completed within a year from the signing of the respective contract's power purchase agreement. (StarBiz)
CGB: Unit signs MoU with Multi Scopes to set up JV for RM250m sewage treatment plant job . Central Global Bhd’s (CGB) construction arm Proventus Bina SB (PBSB) has inked a MoU with Multi Scopes Engineering SB to set up a joint venture to build an RM250m sewage treatment plant in Petaling Jaya, Selangor. CGB said the scope of the proposed JV would be the engineering, procurement, construction, commissioning, operation and handover of the plant to Kwasa Land SB, a wholly-owned subsidiary of the EPF. PBSB and Multi Scopes will have stakes of 70% and 30% respectively in the JV. (The Edge)
Tiong Nam: Buys warehouse in Johor for RM30m . Tiong Nam Logistics Holdings is acquiring VM Andaman SB (VN Andaman) for RM30m as part of its effort to expand its logistics warehousing capacity. The acquisition of VN Andaman included with its warehouse asset at Pelabuhan Tanjung Pelepas in Johor. Tiong Nam said the acquisition was expected to be completed by September 8 this year. (New Straits Times)
Fitters Diversified: Unit secures central purchase contract to supply PVC-O pipes . Fitters Diversified said its unit has bagged a central purchase contract to supply Hypro Oriented PVC (PVC-O) pipes. It said its subsidiary Molecor (SEA) SB (Molecor SEA) received a letter of acceptance of the contract from Pengurusan Aset Air Bhd (PAAB). It said Molecor SEA will supply Hypro PVC-O pipes over a period of 24 months with a provisional quantity of approximately 290 km to PAAB. (The Edge)
The FBM KLCI might open lower today after US stock markets were subdued on Wednesday. Both Wall Street’s S&P 500 index, which has traded in a tight range for weeks, and the technology focused Nasdaq Composite edged lower at the end of the trading day, closing 0.2% and 0.1% lower, respectively. In Europe, stocks linked to travel rallied on reports that the Biden administration had taken the first step towards relaxing coronavirus-related travel bans. The region-wide Stoxx Europe 600, which rose to all-time highs earlier this week, set a fresh record after climbing 0.1%.
Back home, the FBM KLCI posted a 6.48-point or 0.41% decline to close at its intraday low of 1,581.48 on profit taking and as Asian equity indices fell, while investors continued to weigh the impact of progress in Covid-19 vaccination to rejuvenate a pandemic-hit world economy. Across the region, the MSCI's broadest index of Asia-Pacific shares outside Japan ticked down 0.3%, while Japan's Nikkei average shed 0.4%. The Shanghai Composite Index ticked up 0.3%, while Hong Kong’s Hang Seng Index edged down 0.1%.
Source: PublicInvest Research - 10 Jun 2021
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CGBCreated by PublicInvest | Mar 21, 2024