Economy

Global: FDI flows to recover 10-15% this year: UNCTAD . Global foreign direct investment flows are set to pick up this year after a severe slump in 2020 as economic activity across the world was impacted by the coronavirus pandemic, a UN report showed. FDI flows are expected to bottom out this year and recover some lost ground with an increase of 10-15%, the UNCTAD's latest World Investment Report said. (RTT)

UK: Households' optimism towards future finances improve in 2Q . British households' optimism about their finances over the next twelve months reached its highest level in five years in the 2Q, survey results from IHS Markit showed. The headline Scottish Widows household finance index, which measures households' overall perceptions of financial wellbeing, rose to 44.7 in the 2Q from 42.0 in the 1Q. The indicator signaled the weakest deterioration in UK household finances since the Covid-19 pandemic began. The reduced financial strain also supported sentiment towards household finances over the coming year. For the first time since the first quarter of 2016, British households expect their financial wellbeing to improve over the coming year, with 18-34-year-olds particularly upbeat about their financial outlook. (RTT)

China: Keeps benchmark lending rates unchanged . China kept its benchmark lending rates unchanged, as widely expected. The one year loan prime rate was maintained at 3.85% and the five-year loan prime rate was retained at 4.65%. The one-year and five-year loan prime rates were last lowered in April 2020. The one-year loan prime rate was cut by 20 basis points and five-year rate by 10 basis points in April 2020. As the PBOC had kept the rate on its medium-term lending facility unchanged early this month, markets widely expected the rates to remain on hold today. (RTT)

Taiwan: Sizzling export order pace slows, but demand still strong . Taiwan's May export orders grew less sharply than expected but the government said the outlook for the island's tech goods remains strong on sustained demand for telecommuting products during lockdowns worldwide to contain the Covid-19 pandemic. Demand for smartphones from technology firms such as Apple Inc also fuelled orders, but was not as strong as had been expected. Taiwan's export orders, a bellwether of global technology demand, jumped 34.5% from a year earlier to USD52.29bn in May, data from the Ministry of Economic Affairs showed. The ministry attributed the strong performance to robust demand for smartphones, tablets and electronics parts for the automotive sector, which has been suffering from a global shortage of chips. (Reuters)

South Korea: In good sign for global economy, South Korea's exports post early double-digit gains . South Korea’s exports are set to climb by double digits again in June as the global economy shakes off the effects of the pandemic, though a slower pace from recent months suggests the days of outsize gains may have passed. Exports rose 29.5% in the first 20 days of the month from a year earlier, the customs office reported. Adjusted for calendar effects, average daily shipments increased 33.7% in the period, which had half a business day less compared with last year. As vaccinations speed up and lockdowns ease across the world, Korea has seen overseas demand grow beyond memory chips to cars, smartphones and other consumer goods. (Bloomberg)

Australia: Retail sales rise 0.1% in May . The total value of retail sales in Australia was up a seasonally adjusted 0.1% on month in May, the Australian Bureau of Statistics said - coming in at AUD31.069bn. That missed expectations for an increase of 0.5% following the 1.1% increase in April. Food retailing (1.5%) led the rises, but this was offset by falls in Household goods (-1.0%), and clothing, footwear and personal accessory retailing (-1.5%). On a yearly basis, retail trade was up 7.4% after surging 25.0% in April. (RTT)

Markets

IHH Healthcare (Outperform, TP: RM6.30): Associate Parkway Life REIT to expand into third key market. IHH Healthcare’s 35.25%-owned associate Parkway Life REIT, which already has a foothold in two key markets in Singapore and Japan, plans to build a third key market which can enhance the property trust’s growth in the mid to long term. (The Edge)

MAHB: Submits Subang Airport long-term regeneration plan to government. Malaysia Airports Holdings (MAHB) has submitted a comprehensive strategic plan for the long-term development of Lapangan Terbang Sultan Abdul Aziz Shah (LTSAAS) to the government. The plan had been verified through extensive benchmarking and stakeholder engagements, and further validated by independent parties. (BTimes)

Rubberex: Proposes 10% private placement to fund new production lines. Rubberex Corp (M) has proposed a private placement of up to 83.23m shares or 10% of its share capital to raise RM78.65m. From the proceeds to be raised based on an indicative issue price of 94.5sen per placement share, some RM69.13m will be used to acquire 28 double-formers nitrile disposable glove production lines. (The Edge)

Focus Dynamics: Acquires 19.37% stake in Saudee. Focus Dynamics Group has acquired a substantial stake of 19.37% in Saudee Group after taking a subscription of the latter's 138.05m rights issue share. The investment is under the previous MOU signed in Oct 2020 between the companies to roll out a robotics based manufacturing facility and develop robotic burger kiosks. (BTimes)

LTKM: Seeks RM11.7m via private placement. LTKM has proposed to undertake a private placement of to raise up to RM11.71m for working capital. Comprising up to 13.01m shares or 10% of its issued shares, the shares will be placed to independent investors at a price to be fixed later. The private placement is a first step forward to enable the group to meet the public spread requirement. (The Edge)

Comfort Gloves: Reports 13-fold rise in 1Q net profit to RM219m, declares four sen dividend. Comfort Gloves's net profit for the 1QFY22 surged by more than 13 times to RM219.13m, from RM16.34m a year earlier, on higher sales volume and average selling prices (ASPs), as well as better economies of scale. (The Edge)

George Kent: Reports two-month net profit of RM11.34m on robust sales of water meters. George Kent (Malaysia) achieved a net profit of RM11.34m for the two months ended March 31, 2021, on revenue of RM34.62m. The group also reported a net profit of RM48.75m on revenue of RM310.83m for the 14-month period (FY21). (The Edge)

IPO: Nestcon sees 57.13 times oversubscription for IPO shares. Nestcon received 22,673 applications for 1.87bn new shares, valued at RM523.97m, representing an overall oversubscription rate of 57.13 times the 32.19m initial public offering (IPO) shares made available for the Malaysian public. (The Edge)

Market Update

The FBM KLCI might open higher today as US stocks bounced back and government bonds softened on Monday, reversing some of the tumultuous moves last week that followed a Federal Reserve meeting where officials took a more hawkish tone on interest rates and inflation. The S&P 500 closed higher by 1.4%, a resurgence that came after it posted its worst performance in almost four months last week. The technology-focused Nasdaq Composite index was also up, gaining 0.8% on the day. The Russell 2000 index of smaller US companies, whose fortunes are more closely tied to US economic growth, rose 2%. In Europe, the Stoxx 600 share index climbed 0.7%, with materials stocks at the top of its leaderboard.

Back home, the FBM KLCI fell 1.06%, in line with declines in Wall Street overnight and regional markets, following hawkish comments from the US Federal Reserves (Fed). The benchmark index, which opened 8.54 points lower at 1,580.51, closed at 1,572.24 — down 16.81 points from last Friday's close. The regional bourses were tracking Wall Street’s sell-off last week, triggered by fresh comments from a Fed official that the US central bank might raise interest rates sooner than expected. The Nikkei 225 average lost 3.29% in its biggest percentage fall since Feb 26, to close at 28,010.93. South Korea’s Kospi also closed 0.83% lower at 3,240.79, the sharpest decline since June 9, while Hong Kong’s Hang Seng dropped 1.08% to 28,489.

Source: PublicInvest Research - 22 Jun 2021