Economy

US: Consumer confidence slumps more than expected in Feb. Consumer confidence in the US saw a substantial deterioration in the month of Aug. The Conference Board said its consumer confidence index tumbled to 113.8 in Aug from a downwardly revised 125.1 in July. Economists had expected the consumer confidence index to drop to 123.0 from the 129.1 originally reported for the previous month. (RTT)

US: Homebuyers sign fewer contracts in July, as high prices chill the summer market. Signed contracts to purchase previously owned homes fell 1.8% in July from June, according to the National Association of Realtors. Sky-high home prices have caused affordability to drop dramatically in the last several months. The median price of an existing home was up 18% in July, according to the Realtors. (CNBC)

EU: Euro zone inflation surges to 10-year high, in big headache for ECB. Euro zone inflation surged to a 10-year-high this month with further rises still likely to come, challenging the ECB’s benign view on price growth and its commitment to look past what it deems a transient increase. Consumer prices in the 19 countries sharing the euro rose by 3% this month, after increasing by 2.2% in July, far above expectations for 2.7% and moving well clear of the ECB’s 2% target. (Reuters)

EU: German unemployment falls further in Aug as recovery continues. German unemployment fell more than expected in Aug, as a recovery continues in Europe’s largest economy despite rising COVID-19 figures. The Labour Office said the number of people out of work fell by 53,000 in seasonally adjusted terms to 2.538m. A Reuters poll had forecast a fall of 40,000. (Reuters)

China: Economy under pressure as factory activity slows in Aug, services contract. China’s businesses and the broader economy came under increasing pressure last month as factory activity expanded at a slower pace while the services sector slumped into contraction, hurt by coronavirus-related restrictions and high raw material prices. (Reuters)

Japan: July factory output slips as COVID-19 hits car production. Japan’s industrial output shrank in July as car production took a hit from a coronavirus resurgence in Asia that has cast doubt over the recovery in the world’s third-largest economy. Factory output dropped 1.5% in July from the previous month, hit by a decline in the production of autos, including passenger cars and small buses. (Reuters)

Markets

Scientex: Expands Klang Valley footprint with 251-acre land purchase. Scientex has entered into a sale and purchase agreement with Seriemas Development SB, a wholly owned subsidiary of Permodalan Nasional Bhd, to acquire five pieces of freehold land totalling 250.8 acres in Jenjarom, Selangor for RM207.6m. It plans to launch a mixed development project on the land, with its GDV yet to be determined (SunBiz)

Ireka: Inks deal to be Wanland Metro's main contractor. Ireka Corp has signed a joint venture agreement (JVA) with Wanland Metro SB to be the main contractor for the latter's construction jobs. Under the JVA, Ireka shall inject and provide seed capital of RM5m to part-finance working capital to carry out and undertake pre-development related costs and expenses and overheads in the development and construction works. (BTimes)

MCE: Bags contracts to supply mechanical parts for Perodua. MCE Holdings has secured contracts to supply various mechanical parts for new Perodua car models. The projects are expected to generate total revenue of approximately RM17.59m for MCE, while the estimated total investment cost is RM1.83m. Supply of the auto parts is expected to commence in the 2QFY23 for a duration of six years. (The Edge)

Vizione: Secures RM116m hotel construction contract. Vizione Holdings has secured a contract from Inspirasi Langkawi SB worth RM116m. The contract involved the main building works for the proposed construction of a four-star 14 levels hotel building in Langkawi, Kedah. The project is expected to commence in Sept and to complete in two years. (BTimes)

Global Oriental: To jointly develop RM170m GDV project in Ipoh. Global Oriental has teamed up with Perak State Secretary Inc (SSI) to jointly develop a 15.28-acre parcel of land in Ipoh, Perak into a residential development with an estimated GDV of RM170. The land has good development potential due to its location and the JV is expected to contribute positively to the group's earnings in the future. (The Edge)

TFP Solutions: To undertake RM2.75bn 5G-enabled FTTH, with first phase in Langkawi. TFP Solutions will participate in the nationwide 5G-enabled fibre-to-the-home (FTTH) roll-out via a special purpose vehicle that has an estimated gross enterprise value of RM2.75bn. It has signed a memorandum of understanding with Landasan Salam SB for the project with the initial phase to commence in Langkawi. (BTimes)

Pestech: Proposes two-for-eight bonus issue of shares, one-for-eight bonus issue of warrants. Pestech International has proposed to undertake a bonus issue of 191.07m new shares based on 2 bonus shares for every 8 existing shares held on an entitlement date to be determined later. Concurrently, it is proposing a bonus issue of up to 95.54m warrants on the basis of one warrant for every eight existing shares. (The Edge)

Kanger: Ventures into manufacturing, sales of surgical face masks. Kanger International has ventured into the distribution and sale of high-quality 4-ply surgical face masks under the brand CommonMask. The first range of CommonMask premium 4-ply surgical face masks are not only designed to provide better comfort and protection but also comes in four colours that allow their wearers to make a unique fashion statement. (BTimes)

Market Update

US markets eased off overnight though still finished higher for the month of August with investor caution over the delta variant spread and Federal Reserve’s Jackson Hole largely brushed off. All eyes will now be on the US non-farm payrolls data which is scheduled to be released later this week, for insight into the possible path of FED monetary policy. Consumer confidence slipped to a 6-month low, suggesting that Americans are now being less inclined to purchase big-ticket items. On the day, both the Dow Jones Industrial Average and S&P 500 slipped 0.1% as the Nasdaq Composite ended largely unchanged. Over in Europe, markets also ended lower as inflation numbers posting a seventh straight month of gains brought back rate hike fears. Inflation is also now at its highest level in 10 years. Germany’s DAX and UK’s FTSE 100 slipped 0.3% and 0.4% while France’s CAC 40 fell 0.1%. Asian markets were mostly higher even as data showed Chinese factory activity slowing down in August. Japan’s Nikkei 225 rose 1.1%, while the Shanghai Composite and Hang Seng indices added on 0.5% and 1.3% respectively on the day. The local bourse was closed overnight for Merdeka Day, though gaining another 0.7% on Monday.

Source: PublicInvest Research - 1 Sept 2021