Economy

US: Weekly jobless claims edge slightly higher. First-time claims for US unemployment benefits edged slightly higher in the week ended August 21st, according to a report released by the Labor Department. The initial jobless claims inched up to 353,000, an increase of 4,000 from the previous week's revised level of 349,000. Economists had expected jobless claims to tick up to 350,000 from the 348,000 originally reported for the previous week. Meanwhile, the Labor Department said the less volatile four-week moving average fell to 366,500, a decrease of 11,500 from the previous week's revised average of 378,000. (RTT)

EU: M3 growth slows in July. Annual growth in the euro area money supply and lending to the private sector slowed in July, figures from the European Central Bank showed. The annual growth rate of the broad monetary aggregate M3 fell to 7.6% from 8.3% in June. The average for the three months to July was 8.1%. The narrower aggregate M1 grew 11.0% YoY after an 11.8% increase in June. The annual growth rate of credit to the private sector decreased to 3.4% in July from 3.6% in June. The annual growth rate of adjusted loans to the private sector was 3.0% in July, unchanged from the previous month. (RTT)

EU: German consumer morale drops heading into Sept - GfK. The mood among German consumers darkened heading into Sept as accelerating inflation and rising COVID-19 cases made them more hesitant to buy, a survey showed. The consumer sentiment index, based on a survey of around 2,000 Germans, dropped to -1.2 points for Sept, from a revised -0.4 points a month earlier. The reading compared with a forecast for -0.7. (Reuters)

EU: Italy industrial turnover increases in June. Italy's industrial turnover increased in June after falling in the previous month, data from the statistical office Istat showed. Industrial turnover grew 3.1% MoM in June, after 0.9 percent decrease in May. Domestic turnover rose 2.1% in June, after a 1.7% fall in May. Foreign turnover growth accelerated to 4.7% from 0.3%. Turnover of capital goods and energy grew 0.3% and 6.0% respectively. Intermediate goods turnover rose 5.0% and consumer goods turnover increased 2.6%. On a yearly basis, industrial turnover rose 28.4% in June, after 40.1% increase in the previous month. (RTT)

UK: Car output falls to lowest July level since 1950s. British car output fell to its lowest July level since 1956 as a global shortage of semi-conductor chips and staff having to self-isolate due to COVID-19 hit the sector, a trade industry body said. Volumes dropped by an annual 37.6% to 53,438 vehicles last month, according to the Society of Motor Manufacturers and Traders (SMMT), which also blamed the timing of summer factory shutdowns. (Reuters) 

Japan: Keeps economic view intact, bleaker on outlook due to COVID. Japan’s government maintained its economic assessment for a fourth straight month in Aug but offered a slightly bleaker view on the outlook than in July, as a resurgence in COVID-19 infections weighted on consumer spending. The economy continues to pick up but showing some weaknesses as conditions remain severe due to the coronavirus pandemic, the government said in its monthly economic report released. (Reuters)

Japan: Service prices sustain rise as demand weathers COVID hit. The prices Japanese companies charge each other for services rose for a fifth straight month in July, data showed, a sign the economy was holding up despite the hit from a resurgence in COVID19 cases and curbs to combat the pandemic. But the annual pace of increase slowed for two straight months and paled in comparison to a recent jump in wholesale inflation, underscoring the pain the pandemic has inflicted on the country’s service sector. (Reuters)

South Korea: Lifts interest rates from record low as debt threats grow. The Bank of Korea raised its policy rate for the first time in almost three years, becoming the first major Asian central bank to shift away from pandemic-era monetary settings as ballooning consumer debt created new threats for the economy. (Reuters)

Markets

IGB Commercial REIT (Neutral, TP: 1.72): Book-building indicative price set at 83 sen, versus ROFS price of RM1. IGB Commercial REIT, which is tentatively slated to debut on the Main Market on Sept 20, has set the indicative price for the institutional portion of its initial public offering (IPO) at 83 sen apiece. That marks a 17% discount to the RM1 per unit it offered under its restricted offer for sale (ROFS), according to its supplementary prospectus for the listing dated July 28. Based on the term sheet sighted by The Edge, the book building process will begin on Aug 30 and close on Sept 2. The lower indicative price for the share placement is an indicator of possible lower price for IGB's shareholders to subscribe to the ROFS. (The Edge)

Top Glove: Still keen on HK listing, to resubmit application after lapse. Top Glove Corp, which has seen a delay in its proposed RM4.17bn initial public offering (IPO) in Hong Kong, said it is still pursuing the plan. The glove maker reaffirmed its intention today after announcing that its application for listing on the Hong Kong stock exchange had lapsed after six months under the listing rules at the exchange. Top Glove, which is also listed in Singapore, announced the IPO proposal in February with an initial target of raising RM7.7bn. (The Edge)

Pharmaniaga: Eyes overseas expansion for Sinovac vaccine. Pharmaniaga is looking at expanding its presence in the Southeast Asia and the African markets by supplying Sinovac Covid-19 finished vaccine manufactured by its own high-tech plant. Pharmaniaga group MD Datuk Zulkarnain Md Eusope said with more than 700m population in SEA and 1.3bn in Africa, the markets had tremendous potential for growth and would be its focus areas to supply the vaccine. (BTimes)

Green Packet: Subsidiary gets Labuan conditional investment bank licence. Green Packet’s wholly owned subsidiary Oasis Capital Investment Bank (OCIB) has received a conditional investment bank licence from the Labuan Financial Services Authority (LFSA). The conditional investment bank licence is a greenlight by LFSA for OCIB to begin fulfilling operational conditions such as setting up the required processes and technology platforms in accordance with regulatory requirements. A full operating licence will be awarded by LFSA upon fulfilment of these operationalisation activities. (SunBiz)

LYC: Plans to list healthcare business on SGX-ST. LYC Healthcare is planning to list its healthcare business on the Catalist board of the Singapore Exchange Securities Trading Ltd. Prior to completion of the proposed listing, LYC intends to undertake a reorganisation of some of its subsidiaries involved in the healthcare business for the purpose of forming a listing group vehicle. (The Edge)

Reservoir Link: Secures contract from Roc Oil. Reservoir Link Energy has secured a contract from Roc Oil (Sarawak) SB for the provision of perforation services for drilling and production phase in 2021 and 2022. Reservoir Link said its wholly owned subsidiary, Reservoir Link SB (RLSB) had on Aug 13 received a letter of award from Roc Oil in relation to provision of perforation services for D35, D21 and J4 drilling and production phase (2021-2022). (StarBiz)

Market Update

The FBM KLCI might open lower today after global stocks wavered on Thursday ahead of Friday’s Jackson Hole speech from Federal Reserve chair Jay Powell. The blue-chip S&P 500 index closed down 0.6%, with four-fifths of the stocks in the benchmark declining, its first losing day in a week. The technology-heavy Nasdaq Composite also slipped 0.6% and the global stock barometer FTSE All-World index fell 0.5%. Investors will be watching on Friday for clues from central bank policymakers as to when the Fed may begin removing its crisis-era stimulus measures as the US economy and labour market rebound from the pandemic. The virtual meeting of central bankers sponsored by the Kansas City Federal Reserve — normally hosted in Jackson Hole, Wyoming — will be headlined with a speech on Friday morning by Powell. While most investors do not expect Powell to announce that the Fed will begin tapering its USD120bn-a-month asset purchase programme, some central bank officials made hawkish statements on Thursday that gave markets a pause. In Europe, the region-wide Stoxx 600 closed down 0.3%, while the UK’s FTSE 100 and Germany’s Dax declined 0.4%. France’s CAC 40 slipped 0.2% by the end of trading.

Back home, the FBM KLCI continued to hover at a two-month-high level on Thursday, with the benchmark composite index rallying to the 1,585-level. At 5pm, the FBM KLCI rose 15.94 points to 1,585.74 from Wednesday’s close of 1,569.80. The regional markets remained under pressure, with Hong Kong’s Hang Seng index trading down 1.1%. Short-video platform Kuaishou, a Chinese group listed in Hong Kong, tumbled 9.2% after weaker than expected second-quarter earnings. Meanwhile, South Korea became the first big Asian economy to raise interest rates since the start of the pandemic. South Korea’s Kospi Index slid 0.6%.Most other equity markets in the region were flat or lower as investors braced for a more hawkish stance from central banks around the world following the BOK's move to raise interest rates.

Source: PublicInvest Research - 27 Aug 2021