Economy

US: Consumer sentiment plummets in early August to decade low . US consumer sentiment dropped sharply in early August to its lowest level in a decade, in a worrying sign for the economy as Americans gave faltering outlooks on everything from personal finances to inflation and employment, a survey showed. The unexpected reading could give Fed policymakers pause if it translates in the months ahead to a dent in economic activity. The central bank has been getting closer to a decision on when to begin pulling back the extraordinary stimulus it put in place to shield the economy from the Covid-19 pandemic. The University of Michigan said its preliminary consumer sentiment index fell to 70.2 in the first half of this month from a final reading of 81.2 in July. That was the lowest level since 2011, and there have been only two larger declines in the index over the past 50 years. (Reuters)

US: Import prices rise 0.3% in July . The Labor Department released a report showing US import prices increased by less than expected in the month of July. The report said import prices rose by 0.3% in July after surging up by a revised 1.1% in June. Economists had expected import prices to climb by 0.6% compared to the 1.0% jump originally reported for the previous month. Meanwhile, the Labor Department said export prices shot up by 1.3% in July following a 1.2% leap in the previous month. Export prices were expected to increase by 0.8%. (RTT)

EU: Trade surplus declines on weak exports . The Eurozone trade surplus declined in June driven by weak exports, data published by Eurostat showed. The trade surplus fell to a seasonally adjusted EUR12.4bn in June from EUR13.8bn in May. Exports dropped 0.7% in June, while imports remained stable from the previous month. On an unadjusted basis, the trade surplus decreased to EUR18.1bn from EUR20bon in the same period last year. Both exports and imports climbed 23.8% and 28.2% on year, respectively in June. (RTT)

EU: Exports to Britain rise in June as they fall to rest of the world . EU exports to Britain rose in June after a volatile start to the country's first year outside the single market, while the bloc's exports to the rest of the world dropped slightly in the same month. The EU statistics office Eurostat said seasonally adjusted exports to Britain increased by 4.7% in June on the month, whereas imports from the UK were "nearly unchanged" and the bloc's exports to other countries dropped 0.6%. The MoM rise in exports to Britain followed a plunge, surge and second drop earlier this year, which were also recorded in imports, as firms adapted to new trade requirements after Brexit. (Reuters)

China: Port shutdown raises fears of closures worldwide. A Covid outbreak that has partially shut one of the world’s busiest container ports is heightening concerns that the rapid spread of the delta variant will lead to a repeat of last year’s shipping nightmares. The Port of Los Angeles, which saw its volumes dip because of a June Covid outbreak at the Yantian port in China, is bracing for another potential decline because of the latest shutdown at the Ningbo-Zhoushan port in China, a spokesman said. Anton Posner, chief executive officer of supply-chain management company Mercury Resources, said that many companies chartering ships are already adding Covid contract clauses as insurance so they won’t have to pay for stranded ships. (Bloomberg)

Japan: Avoids double-dip recession as consumers bounce back. Japan’s economy returned to growth last quarter and avoided a double-dip recession, as consumer and business spending proved resilient in the face of continued restrictions to contain the coronavirus. Gross domestic product expanding an annualized 1.3% from the prior quarter in the three months through June, bouncing back after shrinking in the prior quarter, the Cabinet Office reported Monday. Economists had forecast 0.5% growth. Growth last quarter was fueled by renewed investment by businesses and a bounce back in spending by consumers, which makes up more than half the economy. The virus has spread far more widely in Japan since July, with a record Delta-driven wave in recent days pushing its daily caseload to more than double previous peaks, though deaths have stayed low due to high vaccination rates for seniors. (Bloomberg)

Taiwan: Expects fastest growth in a decade this year on export boom . Taiwan's economy will grow at its fastest pace in more than a decade in 2021, the statistics office said, upgrading its outlook on a strong rebound in exports for the tech heavyweight island. GDP is expected to rise 5.88% this year, the fastest pace since it expanded 10.25% in 2010, the Directorate General of Budget, Accounting and Statistics said, and up from a growth forecast of 5.46% made in June. Giving its first forecast for 2022, the office said it saw GDP growth reaching a more modest 3.69% next year. The revision came as the statistics office bumped up its export growth forecast for this year, with global demand for the island's technology products buoyed by a work from-home boom during the Covid-19 pandemic. (Reuters)

Hong Kong: Sees growth as much as 6.5% as spending recovers . Hong Kong raised its economic growth forecast for 2021 as the government slowly eases virus control measures and cash vouchers help to drive spending in a city hit by the pandemic and protests before that. The city now projects GDP growth of 5.5% to 6.5% this year, compared with an earlier range of 3.5% to 5.5%, the statistics department said. The government also raised its year-on-year GDP figure for the second quarter to 7.6% from an advanced reading of 7.5%. On a QoQ basis, a better reflection of growth momentum, GDP shrank 0.9%, the finalized data showed. Forecast for underlying inflation is maintained at 1%. (Bloomberg)

South Korea: Export prices climb 16.9% on year in July . Export prices in South Korea jumped 16.9% on year in July, the Bank of Korea said - accelerating from the 13.0% increase in June. Individually, export prices of agricultural, forestry and marine products gained 6.1% on year and manufacturing products jumped 17.0%. Import prices spiked an annual 19.2%, up from 14.4% in the previous month. Individually, import prices of raw materials skyrocketed 47.5% on year, while intermediate goods were up 16.6%, capital goods fell 2.9% and consumer goods rose 0.1%. On a monthly basis, export prices gained 3.5% and export prices rose 3.3%. (RTT)

Markets

Majuperak: Inks RM100m land swap deal with PKNP . Majuperak Holding (MHB) has proposed to dispose of four plots of land in Sungai Raya, Perak, for RM100m. MHB signed a land swap deal with Perbadanan Kemajuan Negeri Perak (PKNP) involving the disposal of 307.05ha of land in Mukim Hulu Kinta. In the same instance, MHB acquires three plots of land from PKNP located in Mukim Hulu Kinta, Kinta District, totalling 190.34ha for RM140m. (BTimes)

Paramount: Completes investment into P2P financing platform Fundaztic. Paramount Corp has completed its first fintech investment by acquiring a 30% stake in Omegaxis SB, the operator of peer-to-peer (P2P) financing platform Fundaztic. Paramount had signed a conditional share subscription agreement with P2P Venture SB and Omegaxis on April 15, for a 30% stake in Omegaxis for RM13.7m. (The Edge)

NWP: Banking on PropNest to connect property players, buyers and stakeholders . NWP Holdings is leveraging digital innovation through PropNest to streamline and connect processes across the real estate industry, including developers, buyers, sellers, agencies, lenders, and landlords. PropNest is a one-stop solution that offers integrated and comprehensive solutions to address the needs of the property industry from disruptive innovation such as financial technology solutions for property agencies. (BTimes)

KIP REIT: Plans private placement to raise up to RM81m for future acquisitions. KIP REIT plans to undertake a private placement to raise up to RM80.85m for the group’s future acquisitions. The private placement involves an issuance of up to 101.06m new units, representing up to 20% of the total number of 505.3m units issued to the independent investors to be identified at a later date. (The Edge)

Samaiden: Bags contracts to install rooftop solar systems for Malakoff. Samaiden Group has entered into four engineering, procurement, construction and commissioning (EPCC) agreements with a unit of Malakoff Corp to install rooftop solar photovoltaic systems at four locations. The projects are worth a combined RM22.8m. (StarBiz)

Catcha Digital: Bursa rejects regularisation plan amid non compliance with listing requirements . Bursa Securities has rejected Catcha Digital’s (formerly known as Rev Asia) proposed regularisation plan, as the regulator said the GN2 status company’s sponsor has not demonstrated the ability of the plan to comply with the ACE Market Listing Requirements. The company and sponsor had not satisfactorily addressed Bursa Securities’ concerns on the suitability of the iMedia Group to regularise the financial condition of the company. (The Edge)

MPay: In partnership to launch prepaid MasterCard, e-wallet . Managepay Systems (MPay) has entered into a partnership for the issuance of MPAY PanPay MasterCard Prepaid Card, MPAY Smartlink Wallet and MPAY Smartlink Online Wallet. Under the agreement, Smartlink will promote the products, while MPay will provide expertise and interface to the system for management of the products. (The Edge)

Market Update

The FBM KLCI might open with a cautious note today as US Treasury yields tumbled after the release of a survey showing a gloomier outlook from American consumers on issues including personal finances, the economic recovery and inflation. The University of Michigan index of consumer confidence fell 13.5% in the month to mid-August, dipping below the lows reached in April 2020 during the early days of the pandemic. The only other fall of this magnitude occurred during the depths of the global financial crisis in April 2008. Wall Street stocks reached new highs while European shares have now had their longest run of record closing highs in at least three decades, as strong earnings outweighed worries about the spread of the Delta variant. The S&P 500 index of blue-chip US stocks rose 0.2% to a further high on Friday, after entertainment group Disney released earnings that beat expectations. The tech-heavy Nasdaq Composite traded flat. In Europe, the regional Stoxx 600 index inched up 0.2% — the 10th consecutive session that it has eked out a record. The UK’s FTSE 100 gained 0.4% following solid second-quarter growth figures released on Thursday.

Back home, the FBM KLCI ended marginally higher as plantation stocks lifted, while investors digested domestic economic data and developments on Covid-19 cases in the country. The benchmark index ticked up just 3.14 points or 0.21% to settle at 1,505.11. Elsewhere in the region, China shares closed lower on Friday, as the country’s top chipmaker SMIC dragged semiconductor stocks. Hong Kong shares also fell as tech stocks weighed on the city’s benchmark index. The Shanghai Composite Index dipped 0.24% to close at 3,516.30, while Hong Kong’s Hang Seng Index fell 0.48% to 26,391.62.

Source: PublicInvest Research - 16 Aug 2021