Economy

Global: IMF urges countries to shift from economic rescue to reforms. The IMF’s No. 2 official called on countries to pivot from saving their economies from collapse to reviving growth-oriented policy reforms to boost their recovery prospects and make them more sustainable. IMF First Deputy MD Geoffrey Okamoto said in a blog posting on the IMF website that the Covid-19 pandemic delayed and reversed some pro-growth reforms and restoring these can help make up for output lost during the pandemic. (Reuters)

US: Housing starts rise in June, while building permits fall sharply. US homebuilding increased more than expected in June, though expensive lumber, as well as shortages of labor and land, continued to constrain builders’ ability to fully take advantage of robust demand for housing. Housing starts rose 6.3% to a seasonally adjusted annual rate of 1.643m units last month, the Commerce Department said. (CNBC)

EU: Eurozone banks see rise in loan demand in 3Q: ECB Survey. Euro area banks expect net demand for loans to firms and households to increase further in the third quarter as both consumer and business confidence improve as the economic activity gains steam. In the 2Q, banks reported a moderate increase in firm's demand for loans or drawing of credit lines, results of the latest quarterly bank lending survey of the ECB showed. (RTT)

EU: Eurozone current account surplus declines in May. The euro area current account surplus declined in May, data from the ECB showed. The current account surplus dropped to a seasonally adjusted EUR12bn in May from EUR22bn in April. In the same period last year, the surplus totalled EUR6bn. The surplus on goods trade remained unchanged at EUR25bn, while the surplus on services trade dropped to EUR6bn from EUR9bn. (RTT)

China: Keeps loan prime rates unchanged. China left its benchmark lending rates unchanged after the central bank lowered its reserve requirement ratio last week. The one-year loan prime rate was maintained at 3.85% and the five-year loan prime rate 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. (RTT)

Taiwan: June export orders surge again, outlook bullish. Taiwan's export orders grew by more than expected in June and the government said the outlook for the island's tech goods remains strong on demand for high-end chips and ahead of the year-end holiday shopping season. Taiwan's export orders, a bellwether of global technology demand, jumped 31.1% from a year earlier to USD53.73bn in June, data from the Ministry of Economic Affairs showed. (Reuters)

Hong Kong: Jobless rate falls in June. Hong Kong's unemployment rate declined in June, the labor force statistics from the Census and Statistics Department showed. The unemployment rate fell to a seasonally adjusted 5.5% in three months to June from 6.0% in three months to May. The underemployment rate decreased to 2.5% from 2.8% in the preceding period. The number of unemployed persons decreased by around 20,000 to 213,100 in April to June. (RTT)

Markets

MR DIY: To feature in Touch n’ Go eWallet. Mr DIY Group (M) and Touch ‘n Go Group have teamed up to enhance customer experience by providing more benefits and convenience as well as greater personalisation of their offers. The strategic collaboration will see MR DIY being a prominent feature in the Touch ‘n Go eWallet, powered by the eWallet’s Mini Programme platform. (StarBiz)

BHIC: Gets one-year extension for Mindef submarine service support for RM159m. Boustead Heavy Industries Corp (BHIC) said it has received a one-year contract extension for the provision of In-Service Support for Prime Minister's Class Submarines for the Royal Malaysian Navy for RM159.15m. The contract extension was awarded by the Ministry of Defence (Mindef) to BHIC's 60%-indirect unit Boustead DCNS Naval Corp SB. (The Edge)

GCap: Buys remaining stake in Perak Hydro. G Capital (GCap) has signed a term sheet with MB Inc (Perak) for the proposed acquisition of the remaining 40% stake in Perak Hydro Renewable Energy Corp SB that it does not currently own. In a statement, GCap said the purchase consideration will potentially be satisfied via a combination of RM50m of new ordinary shares in GCap and the remaining balance via the issuance of redeemable and convertible preference shares (RCPS) at an issue price of RM0.50 per RCPS. (SunBiz)

Latitude Tree: Suspends operations in Malaysia and Vietnam due to Covid-19. Latitude Tree Holdings said it has temporarily halted operations at its manufacturing facilities in Malaysia and Vietnam due to Covid-19. Two of its Vietnamese subsidiaries Latitude Tree Vietnam Joint Stock Company and RK Resources Co Ltd are partially suspending their operations from 19 to 24 July. This is to comply with a Vietnam government directive to contain the outbreak of the virus in 16 southern states. (The Edge)

Tan Chong, Konsortium Transnasional: Court orders Tan Chong to return repossessed buses to Konsortium Transnasional, pay over RM23m. Konsortium Transnational and six other companies linked to the group have succeeded in their lawsuit to get Tan Chong Motor Holdings to return all buses repossessed from them and to repay a sum of RM22.68m. (The Edge)

MUH, Muda Holdings: MUH sells cement assets to Muda Holdings for RM12.5m. Multi-Usage Holdings’ (MUH) will sell its fixed assets for RM12.5m to Muda Holdings. The fixed assets, which include three plots of land in Penang, plant, machinery and motor vehicles, will help rationalise the company’s asset holdings, as it has ceased operations in the manufacturing of cement products due to the coronavirus impact. (The Edge)

Kanger: Enters deal to buy five million doses of Sinopharm Covid-19 vaccines. Kanger International unit has entered a deal for the purchase of five million doses of Sinopharm Covid-19 vaccines for distribution in Malaysia. The heads of agreement (HoA) was entered between its wholly-owned subsidiary Kanger Medical International SB and Sparmak Medical Equipment Trading LLC. (The Edge)

MARKET UPDATE

The FBM KLCI might nudge higher at opening today as Wall Street stocks clawed back losses after a global rout a day earlier as investors dialled down caution over the spread of the Delta coronavirus variant to focus instead on economic growth. The S&P 500 index erased most of Monday’s losses, climbing 1.5%, having fallen by roughly the same margin to start the week, which was the benchmark’s biggest daily drop in two months. The tech-focused Nasdaq Composite closed 1.6% higher while Europe’s continentwide Stoxx 600 index closed 0.5% higher. Monday’s pullback in global stocks snapped a long period of tranquillity in which equities have drifted higher, spurred by Covid-19 vaccines, central banks’ monetary stimulus and multitrillion-dollar spending plans signed off by US President Joe Biden. The sell-off came after the highly transmissible Delta strain led to renewed social restrictions in AsiaPacific countries that had appeared to have had the virus under control alongside increased anxiety about slowing vaccination rates in the US. In the region, most major benchmarks extended Monday’s declines. The Shanghai Composite Index lost 0.1% and Hong Kong’s Hang Seng tumbled 0.8%.

Source: PublicInvest Research - 21 Jul 2021