US: Fed’s Jim Bullard sees first interest rate hike coming as soon as 2022. St. Louis Federal Reserve President James Bullard told CNBC that he sees an initial interest rate increase happening in late-2022 as inflation picks up faster than previous forecasts had anticipated. That estimate is even quicker than the outlook the broader Federal Open Market Committee released that caused a hit to financial markets. The committee’s median outlook was for up to two hikes in 2023, after indicating in March that saw no increases on the horizon. Bullard at several points described the Fed’s moves this week as “hawkish,” or in favor of tighter monetary policy than what has prevailed since the onset of the Covid-19 pandemic. “We’re expecting a good year, a good reopening. But this is a bigger year than we were expecting, more inflation than we were expecting,” the central bank official said on “Squawk Box.” “I think it’s natural that we’ve tilted a little bit more hawkish here to contain inflationary pressures.” The FOMC’s revised forecasts reflect that sentiment. (CNBC)
EU: Eurozone current account surplus rises in April . The euro area current account surplus increased in April, the European Central Bank reported. The current account surplus totalled EUR23bn in April versus EUR18bn surplus in the previous month. The visible trade surplus widened to EUR27bn from EUR24bn, while the surplus on services trade held steady at EUR8bn. Primary income showed a surplus of EUR1bn compared to a EUR2bon shortfall in March. The deficit on secondary income rose to EUR13bn from EUR12bn a month ago. (RTT)
EU: Germany producer price inflation highest since October 2008 . Germany's producer prices increased to the highest level in twelve-and-a-half years in May, Destatis reported. Producer prices increased 7.2% YoY in May, faster than the 0.8% rise seen in April. Economists had forecast an annual growth of 6.4%. This was the biggest growth since Oct 2008, when prices rose strongly before the financial crisis. The latest inflation was mainly due to higher prices of intermediate goods and energy, by 10.7% and 149%, respectively. Prices for durable goods increased 1.7%. Prices for capital goods and non-durable goods rose by 1.2% and 0.5%, respectively. On a monthly basis, producer price inflation rose to 1.5% from 0.8% in the previous month. Economists had expected a 0.7% rise. (RTT)
UK: Retail sales dip as consumers, freed from locked down, dine out . British retail sales fell unexpectedly last month as a lifting of lockdown restrictions encouraged spending in restaurants rather than shops, according to official data. Retail sales fell 1.4% between April and May, the Office for National Statistics said. Food stores suffered the biggest hit, with a 5.7% drop in sales. "Anecdotal evidence suggests the easing of hospitality restrictions had an impact on sales as people returned to eating and drinking at locations such as restaurants and bars," the ONS said. Most economists said the weak retail sales data was not necessarily suggestive of weaker consumer spending as the economy recovers from the COVID-19 pandemic, since hospitality businesses have reported booming trade. (Reuters)
UK: House prices show biggest seasonal rise since 2015 – Rightmove . Asking prices for British homes between mid-May and early June rose by 0.8% compared with a month before, the biggest rise for the time of year since 2015, as available housing remains in short supply, property website Rightmove said. The increase is less than the 1.8% recorded a month earlier but still takes asking prices 7.5% above their level in early March 2020, before Britain went into its first COVID lockdown. "Buyer demand remains very strong, though with an all-time low in the number of properties available for sale ... and new stock at higher-than-ever average prices, there are early signs of a slowing in the frenetic pace," Tim Bannister, Rightmove's director of property data, said. Rightmove, which says it advertises 95% of homes for sale in Britain, collected the data between May 9 and June 12. (Reuters)
Japan: Overall inflation eases 0.1% on year in May . Overall consumer prices in Japan were down 0.1% on year in May, the Ministry of Internal Affairs and Communications said - following the 0.4% contraction in April. On a monthly basis, inflation was up 0.3% after sinking 0.4% in the previous month. Individually, prices were higher annually for housing, furniture, clothing, education and recreation; they were lower for food, fuel, medical care and communications. Core consumer prices, which exclude volatile food costs, was up 0.1% on year after falling 0.1% a month earlier. Core CPI was up 0.2% on month. (RTT)
Japan: BoJ keeps stimulus unchanged; mulls funding plans to address climate change . The Bank of Japan maintained its massive monetary stimulus and announced the introduction of a new funding programme to support the efforts on climate change issues and also extended the deadline for Covid support programme. The board, governed by Haruhiko Kuroda, voted 7-1, with 1 abstention, to hold the interest rate at -0.1% on current accounts that financial institutions maintain at the central bank. The bank will continue to purchase a necessary amount of Japanese government bonds without setting an upper limit so that 10-year JGB yields will remain at around 0%. (RTT)
DNeX: Acquires an additional 60% stake in Ping for RM314.3m. Dagang NeXchange (DNeX) received shareholders’ approval for the acquisition of an additional 60% stake in Ping Petroleum Ltd for USD78m (RM314.3m). Upon completion of the exercise, DNeX will own a 90% in Ping. Ping had contributed positively to the company's earnings since acquiring a 30%stake in Ping back in 2016. (BTimes)
Kerjaya Prospek Property: To buy land in Selangor for RM82m. Kerjaya Prospek Property is buying a piece of leasehold land in Selangor for RM82m. It had entered into a sale and purchase agreement with Roset-BLG for the acquisition, which is expected to be completed by Jan 2022. The acquisition will enable the group to focus on its core business of property development and to expand its landbank size. (The Edge)
Ipmuda: Inks hydropower plant deals, proposes bonus issue and special dividends. Ipmuda is undertaking a series of corporate exercises in line with the company's growth plans. Ipmuda had signed heads of agreement to buy 70% stake and 100% of the redeemable preference shares of Telekosang Hydro One and Telekosang Hydro Two, as well as 100% of Telekosang Hydro One Asean green junior sukuk for RM163.3m. BTimes)
Pertama Digital : Experian Inks MoU to develop alternative credit scoring solutions. Pertama Digital (PDB) signed a memorandum of understanding with Experian Information Services (Malaysia) SB on a partnership to jointly develop alternative credit scoring solutions. Experian has 17,800 people operating across 44 countries and is listed on the London Stock Exchange and is a constituent of the FTSE 100 Index. (BTimes)
Kim Hin Joo: Revamps backend IT infrastructure to boost online sales. Kim Hin Joo (Malaysia) is launching a new and improved website by the end of this quarter before continuing its plans to revamp its backend IT infrastructure. While the pandemic has caused many disruptions to operations, including its digitalisation plans, Kim Hin Joo has seen strong growth in its online sales. (BTimes)
TDM: Indonesian authority revokes plantation licence in West Kalimantan. The Indonesian authority has revoked the plantation business licence issued to TDM's Indonesian subsidiary for its 10,000ha land located in the municipality of Melawi, West Kalimantan, which is expected to result in a financial impact amounting to RM3.5m. (The Edge)
Opcom: Plans second private placement this year to raise RM23m. Opcom Holdings plans to raise RM22.62m via a new private placement to fund its existing and future contracts, and for working capital. This marks its second cash call this year, after it completed in April a private placement involving up to 10% of its shares that raised RM9.27m. (The Edge)
Automotive (Neutral): New car sales nearly doubled to 46,663 units in May 2021. Malaysia's new vehicle sales surged nearly doubled to 46,663 units in May 2021 from 23,366 units registered in the same period last year, according to Malaysian Automotive Association. Most of the sales volume was from the passenger vehicles at 41,988 units. (BTimes)
The FBM KLCI might open lower today as stocks on Wall Street had their worst week in nearly four months after comments from Federal Reserve policymakers that signalled the US central bank was acutely aware of budding inflationary pressures. The benchmark S&P 500 slid 1.3% on Friday, taking its losses for the week to 1.9%. Roughly 90% of the stocks in the blue-chip index were lower on the day, including shares of big banks and US oil majors. The small-cap Russell 2000 index recorded its heaviest weekly loss since late January, falling more than 4%. The moves followed comments from Jay Powell, Fed chair, on Wednesday that investors took as a signal that the US central bank would act to tame inflation and that policymakers were not solely focused on aiding the country’s hard-hit labour market. Fed policymakers on Wednesday projected that interest rates would rise from record-low levels in 2023, from their earlier forecast of 2024. That view came into sharper focus following an interview James Bullard, president of the St Louis Fed, held with television network CNBC on Friday, where he said the first rate rise could come next year. Menwhile, the tech-heavy Nasdaq Composite was 0.9% lower on Friday, it ended the week down only 0.3%. Across the Atlantic, the pan continental Stoxx Europe 600 dropped 1.6% to 452.05.
Back home, the FBM KLCI rebounded on bargain hunting following the recent sell-off. The benchmark index closed 18.19 points or 1.16% higher at its intraday high of 1,589.05. Major indices in Asia closed on a mixed note. Hong Kong’s Hang Seng Index added almost 0.9% to 28801.27 and South Korea’s Kospi Composite index ticked up 0.1% to 3267.93. Japan’s Nikkei 225 closed down 0.2% to 28964.08 and China’s Shanghai Composite was relatively flat.
Source: PublicInvest Research - 21 Jun 2021
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HEXCAPCreated by PublicInvest | Mar 21, 2024