Economy

US: Weekly jobless claims unexpectedly inch up from pandemicera low. After reporting first-time claims for US unemployment benefits at their lowest level in over a year in the previous week, the Labor Department released a report showing initial jobless claims unexpectedly inched higher in the week ended July 3rd. The Labor Department said initial jobless claims crept up to 373,000, an increase of 2,000 from the previous week's revised level of 371,000. (RTT)

US: Fed minutes hint at patience regarding tapering asset purchases. With officials still seeing risks to the economic outlook, the minutes of the Federal Reserve's latest monetary policy meeting suggest the central bank will not be in a hurry to begin scaling back its asset purchase program. The Fed has repeatedly said it plans to continue to its asset purchases at a rate of at least USD120bn per month until "substantial further progress" has been made toward its goals of maximum employment and price stability. (RTT)

EU: ECB unveils higher inflation goal that tolerates overshoot. The ECB raised its inflation goal and said it’s willing to tolerate a limited overshoot of the target, the outcome of a strategy revamp aimed at bolstering the economy after years of lackluster prices and growth. In the culmination of an 18-month review published, policy makers agreed to seek consumer-price growth of 2% over the medium-term with a “symmetric” aim that could “imply a transitory period in which inflation is moderately above target.” (Bloomberg)

EU: German exports log marginal growth; imports recover. Germany's exports expanded at a marginal pace in May, while imports grew after falling in April, data from Destatis revealed. Exports grew only 0.3% month-on-month in May, following a 0.2% rise in April. Economists had forecast an increase of 0.6%. At the same time, imports advanced 3.4%, reversing a 1.4% drop in the previous month. Exports were forecast to grow 0.4%. (RTT)

UK: House prices rise by most since 1988, but activity begins to cool- RICS. British house prices saw their most widespread rises since 1988 last month, but fewer homes were put up for sale and buyer demand grew less fast ahead of the end of a tax break on property purchases, an industry survey showed. (Reuters)

China: Dovish switch ignites fears over global recovery trade. China’s authorities signaled they may soon unleash more support for the economy, an unexpected shift in tone that suggests the world’s fastest pandemic recovery may be weaker than it appears. Investor reaction in China provided a clue for markets elsewhere counting on accelerating global growth: the CSI 300 Index of stocks slid as much as 1.2% on Thursday, after Beijing hinted companies may need fresh funding, while the yuan dropped and bond futures rose the most in a year. (Bloomberg)

Thailand: Consumer confidence hits record low in June amid virus outbreak. Thai consumer confidence dropped to a record low in June, dented by the country's biggest coronavirus outbreak up to date, a survey showed. The outbreak has seen the most infections and deaths so far and the Southeast Asian country reported on Thursday a daily record of 75 new fatalities and 7,058 cases. (Reuters)

Markets

TM (Outperform, TP: RM6.90): Unifi TV looks to partner with OTT media service providers. Telekom Malaysia (TM) unifi TV is looking to partner with over-the-top (OTT) media service providers to offer a variety of content in the future. TM chief commercial officer Anand Vijayan said unifi TV is working on a few things in this area (potential partnerships with OTT platforms. (The Edge)

FGV (Neutral, TP: RM1.56): Felda to make fresh takeover offer for FGV. Felda is confident of taking FGV private by the end of the year, after failing with its previous offer about four months ago. Felda chairman Datuk Seri Idris Jusoh said it was in talks with certain state governments, which hold a combined 9% stake in FGV, over a fresh privatisation attempt. (BTimes)

MAA, Turiya: Turiya’s largest shareholder gets injunction to block MAA from pursuing takeover offer. MAA Group, which is seeking to make a takeover offer for all the remaining shares in Turiya after its proposed acquisition of a 57.78% stake in the company, applied for an extension of time to despatch the offer document to the SC Malaysia. (The Edge)

Pelikan: Sells Germany logistics centre for RM399.3m, plans special cash distribution. Pelikan International Corp has disposed of its logistics centre in Germany for a cash consideration of EUR81m (equivalent to RM399.33m). The group also said part of the disposal proceeds will be used to reward the shareholders through special cash distribution. (The Edge)

Hong Seng: To form JV with LiGNO for innovative products. Hong Seng Consolidated has entered into an agreement with LiGNO Holding SB to market and distribute the latter's nutritional supplement product in Malaysia. (BTimes)

T7 Global: Subsidiary appointed Malaysia distributor of NZbased Atrax's products. T7 Global has been appointed Malaysia distributor for New Zealand-based Atrax Group NZ Ltd's weighing and measurement products, which are catered to the airport and logistics sectors. (The Edge)

Enra: Buys selected assets for RM60m from MTU Services for leaseback deal, plans MRO collaboration. Enra Group has proposed to acquire four properties and selected assets such as plant, equipment, inventories and machinery from MTU Services (Malaysia) SB for RM60m. Enra said RM33m of the consideration will be satisfied in cash, while the remainder will be satisfied via the issuance of 27m new shares. (The Edge)

Green Packet: Partners with MIDF to provide solutions to digitalise SMEs. Green Packet is partnering with Malaysian Industrial Development Finance (MIDF) to provide financing solutions to small and medium enterprises (SMEs) looking to digitalise their businesses. Under the MoU, MIDF will provide financing advisory services and financing facilities. (The Edge)

IPO: CTOS retail portion oversubscribed by 27.57 times. CTOS Digital said the shares offered to the public under its initial public offering (IPO) was oversubscribed by 27.57 times. The group received 51,494 applications seeking 1.26bn shares for the 44m shares made available. The Bumiputera portion was oversubscribed by 14.37 times. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after stock markets dropped on Thursday on rising concerns about prospects for the global economy, following days of sharp moves in government bonds that hinted at slower growth and inflation than previously expected. Equities fell first in Asia before the negative mood spread into Europe and then to Wall Street — a move analysts blamed on expectations that US economic growth is about to peak at the same time as signs emerge of a slowdown in China. The US S&P 500 index closed lower by 0.9%, while the technologyfocused Nasdaq Composite slipped 0.7%. Both indices had set records in recent days. In Europe, the continent-wide Stoxx Europe 600 lost 2%.

Back home, the FBM KLCI closed 1.4% or 21.44 points lower at 1,508.71, marking a one-year low for the headline index. Markets in China were also down as well. Hong Kong's Hang Seng finished 2.89% or 807.49 points lower at 27,153.13, while the Shanghai Composite was 0.79% or 28.21 points lower at 3,525.5. The Nikkei 225 in Japan closed 0.88% or 248.92 points lower at 28,118.03.

Source: PublicInvest Research - 9 Jul 2021