Economy

US: Consumer sentiment rises as wealthy households improve outlook. US consumer sentiment ticked up in June, driven by an improving economic outlook among affluent households, a survey released showed. The University of Michigan's Consumer Sentiment Index rose to a final reading of 85.5 from May's final level of 82.9, though it was below June's preliminary reading of 86.4. That was below the median forecast of 86.5 among economists polled by Reuters. "All of the June gain was among households with incomes above USD100k and mainly in the way they judged future economic prospects," survey director Richard Curtin said. Also, a record 56% of respondents expect a drop in unemployment in the year ahead. (Reuters)

US: Personal income sees further downside in May. After reporting a sharp pullback in US personal income in the previous month, the Commerce Department released a report showing personal income saw further downside in May. The Commerce Department said personal income slumped by 2.0% in May after plunging by 13.1% in April. Economists had expected personal income to tumble by 2.5%. Disposable personal income, or personal income less personal current taxes, also slid by 2.3% in May after plummeting by 14.6% in April. (RTT)

EU: German consumer confidence to improve in July - GfK. German consumer confidence is set to improve in July as the country eases the lockdown restrictions, monthly survey results from GfK showed. The forward-looking consumer sentiment index rose morethan-expected to -0.3 in July from revised -6.9 in June. The reading was the highest since August 2020. The expected score was -4.0. In June, the economic and income expectations increased significantly and the propensity to buy showed moderate growth. (RTT)

UK: Consumer confidence remains stable in June - GfK. UK consumer sentiment remained unchanged in June, survey results from market research group GfK showed. The consumer confidence index held steady at -9.0 in June, while it was forecast to rise to -7.0. "A repetition of last month's score doesn't mean confidence is about to nose-dive," GfK said. The upwards trajectory for the Index since the dark days at the start of the pandemic is currently still on track, GkK said. However, forecasts for rising retail price inflation could weaken consumer confidence quickly. Four measures of the index were up in comparison to the previous month. (RTT)

UK: BoE sees inflation exceeding 3% temporarily. The Bank of England (BoE) expects inflation to exceed 3% temporarily, and to fall back once the impact of rising commodity prices prove transitory. At the Monetary Policy Committee (MPC) meeting, policymakers repeated their forward guidance and kept the policy unchanged, as widely expected. The MPC said it did not intend to tighten monetary policy at least until there was clear evidence that significant progress was being made in eliminating spare capacity and achieving the 2% inflation target sustainably. (RTT)

China: Industrial profit growth slows amid high raw material prices. Profit growth at China’s industrial firms slowed again in May as surging raw material prices squeezed margins and weighed on factory activity. Profits at China’s industrial firms rose 36.4% YoY in May to CNY829.92bn (USD128.58bn) official data showed. That was a slowdown from the 57% surge reported in April, according to National Bureau of Statistics. China has largely recovered from disruptions caused by Covid-19, but it faces new challenges such as elevated raw material costs and global supply chain crunches. Officials warn that China’s recovery remains uneven. (Reuters)

Singapore: Industrial production accelerates in May. Singapore's industrial production accelerated in May, data from the Economic Development Board showed. Industrial output surged 30.0% YoY in May, following a 2.3% rise in March. Production was forecast to increase 23.6%. Excluding biomedical manufacturing, industrial production grew 29.0% yearly in May, following a 11.3% rise in the preceding month. On a monthly basis, industrial production rose 7.2% in May, after a 0.4% decline in the previous month. Economists had expected a 0.9% fall. Precision engineering output accelerated 58.6% annually in May and transport engineering gained 44.0%. (RTT)

Markets

MyEG: Signs LOI to buy 10m doses of Anhui Zhifei Covid- 19 vaccine . My E.G. Services has signed a letter of intent (LOI) to purchase 10m doses of Anhui Zhifei Biopharmaceutical Co Ltd’s COVID-19 vaccine, ensuring that the corresponding quantity of its recombinant protein subunit vaccine is reserved for delivery as early as Aug. MYEG said it holds three-year rights to exclusively distribute the vaccine in Malaysia while through a separate partnership, the group has two-year exclusive distribution rights to the vaccine in the Philippines and is presently in discussions to distribute in other countries. (StarBiz)

HB Global: Shareholders give nod to acquisition of 5G infrastructure firm and diversification plan . HB Global Ltd said it has received its shareholders' approval for the proposed acquisition of a 60% stake in 5G infrastructure firm Forward Resources and Construction SB worth RM66m. The group also said its shareholders have approved the proposed diversification into construction and engineering solution services which offer a new revenue and income stream for the group and provide a sustainable long-term earnings growth potential. (The Edge)

Hong Seng: To lease land and invest RM1.5bn in nitrile butadiene latex plant . Hong Seng has entered into an agreement with Northern Corridor Implementation Authority (NCIA) to sublease an industrial land located in the Kedah Rubber City (KRC), Padang Terap, Kedah for RM44.69m. “The agreement will allow the company to lease the 503.31 hectares of industrial land in KRC for a period of 60 years, with an option to renew for a further 30 years,” Hong Seng said. “HSI wants to build and operate a nitrile butadiene latex (NBL) manufacturing plant with a planned capacity of 480 kilo-tonnes per annum,” it said. (The Edge)

Leong Hup International: To expand Baker’s Cottage to 280 outlets by end-2023 . Leong Hup International (LHI) is ramping up its business-to-consumer channel via Baker’s Cottage in Malaysia and it targets to have 280 by end-2023 while it also expands its downstream operations in Southeast Asia. LHI’s ED and group CEO Tan Sri Francis Lau Tuang Nguang said that 136 outlets have opened to-date. Complementing the group’s downstream focus, a new poultry processing plant in West Java, Indonesia is being constructed and slated to complete by end of this year. (StarBiz)

MyNews: Posts biggest quarterly loss in 2QFY21 amid lockdown . MyNews Holdings’ net loss widened further to RM10.32m in the 2Q ended April 30, 2021 — the largest quarterly loss since it was listed in 2016 due to the ongoing Covid-19 impact, compared with RM8.94m in the preceding quarter. Quarterly revenue, however, increased 5.37% to RM103.94m against RM98.65m. (The Edge)

Yinson: 1Q net profit more than doubles to RM112m. Yinson Holdings’ net profit for the 1Q ended April 30, 2021 more than doubled to RM112m, from RM47m a year ago, mainly on contribution from its engineering, procurement, construction, installation and commission (EPCIC) business activities. These activities, the group said, were related to floating production storage and offloading (FPSO) units Anna Nery and AbigailJoseph. (The Edge)

Market Update

The FBM KLCI might open higher today after US stocks moved further into record territory on Friday to secure their strongest weekly performance since February, as enthusiasm for President Joe Biden’s infrastructure spending deal outweighed concern over the highest US inflation reading in 29 years. The S&P 500 rose 0.3% on the session, ending the week up 2.7%. The tech-focused Nasdaq Composite closed fractionally down from its record close on Thursday. US stock markets hit highs after Biden last week secured an infrastructure spending deal worth about $1tn, boosting industrial, energy and financial stocks. In Europe, the Stoxx 600 index closed up 0.1%, leaving the continent-wide benchmark up 1.2% for the week.

Back home, the FBM KLCI ended 0.255% higher, in line with regional bourses, which tracked Wall Street gains on US President Joe Biden's infrastructure deal. Most Asian bourses were also in the green, boosted by the US overnight rally. South Korean shares ended at a record high with the KOSPI closing up 0.51% at 3,302.84, while Japanese shares also finished higher with the Nikkei Stock Average rising 0.66% to 29,066.18.China’s Shanghai Composite Index, meanwhile, ended 1.15% higher at 3,607.56.

Source: PublicInvest Research - 28 Jun 2021