Global: Capex booms as companies prepare for post-pandemic era. Global companies from noodle makers to semiconductor giants are spending on new plants and machinery in ways they haven’t done for years. On the supply side, blockages brought on by the Covid-19 pandemic are forcing businesses to invest in new production facilities, calls for a cleaner environment are spurring spending on electric vehicles, batteries and alternative energy; and the big semiconductor crunch has prompted a wave of investment. On the demand side, pent up consumer spending is convincing executives that capital is worth outlaying, a sign that business is buying into the world’s economic recovery prospects even as the delta strain casts a shadow. (Bloomberg)
US: Wholesale inventories increase in line with estimates in July. A report showed wholesale inventories in the US increased in line with economist estimates in the month of July. The wholesale inventories rose by 0.6% in July after jumping by 1.2% in June. The increase matched expectations as well as the preliminary estimate. Inventories of durable goods shot up by 1.0% during the month, more than offsetting a 0.1% dip in inventories of non-durable goods. The wholesale sales surged up by 2.0% in July after spiking by 2.3% in June. The report showed sales of durable goods jumped by 1.1%, while sales of non-durable goods soared by 2.8%. (RTT)
US: Strained supply chains keep producer prices hot. US producer prices increased solidly in Aug, leading to the biggest annual gain in nearly 11 years, suggesting that high inflation is likely to persist for a while as the unrelenting COVID-19 pandemic continues to pressure supply chains. Strong demand and supply constraints were underscored by other data showing the pace of inventory accumulation at wholesalers slowed in July. (Reuters)
EU: Germany consumer price inflation highest since 1993. Germany consumer price inflation accelerated to the highest level since late 1993, final data from Destatis showed. Consumer price inflation rose marginally to 3.9% in Aug from 3.8% in July. A higher inflation rate was last measured in Dec 1993. Inflation is fast approaching the 4% mark. The statistical office confirmed the flash estimate published on August 30. Destatis said there were a number of reasons for the increase in the inflation rate since July 2021, which include base effects due to low prices in 2020. (Reuters)
EU: Italy industrial production growth eases in July. Italy's industrial production rose at a softer pace in July, data published by the statistical office Istat showed. Industrial output rose 0.8% monthly in July, after a 1.1% growth in June. Economists had expected a 0.1% rise. Capital output grew 1.9% and intermediate goods output increased 1.4%. Consumer goods rose 0.9%, while energy goods declined 1.5%. On a yearly basis, industrial production growth eased to 7% in July from 13.8% in the previous month. (RTT)
UK: Economy logs weak growth in July. The UK economy logged weak growth in July as the output remained flat in services, and contracted further in construction on supply shortages, data from the Office for National Statistics showed. GDP expanded 0.1% in July from June, when the economy grew 1%. This was also slower than the 0.6% growth economists had forecast. Although the economy expanded for the sixth consecutive month, output remained 2.1% below its pre-coronavirus pandemic level. In three months to July, GDP grew 3.6%, largely because of the performance of the services sector. (RTT)
UK: Business warns tax hikes risk strangling economic growth. UK Prime Minister Boris Johnson risks strangling growth with higher taxes on business to fix the public finances in the wake of the coronavirus pandemic. Raising business taxes too far has always been self-defeating as it stymies further investment. Companies are also concerned about labor shortages and supply chain delays in the wake of Brexit, and have long sought reforms to business rates levied on shops. Johnson will attempt to reach out to business by announcing plans to support 425,000 jobs a year over the next four years, as part of a previously-announced GBP650bn (USD900bn) package of private and public investment in infrastructure projects over the next decade. (Bloomberg)
China: Bank lending rises less than expected. China's bank lending increased less than expected in Aug, reports said citing data from the People's Bank of China. New yuan loan increased to CNY1.22trn from CNY1.08trn in July. The expected level was CNY1.3trn. At the same time, total social financing rose to CNY2.96trn in Aug, well above the forecast of CNY2.75trn. M2 money supply expanded 8.2% annually, weaker than the expected rate of 8.4%. With the PBoC now shifting gears to a slightly more supportive stance, credit growth may level off in the coming quarters. (RTT)
India: Industrial production grows more than expected. India's industrial production grew faster than expected in July, preliminary data from the statistics ministry showed. Industrial production grew 11.5% YoY, which was faster than the 10.7% increase economists had expected. In the same month of 2020, production had shrunk 10.5% as the lockdown to limit the spread of the coronavirus pandemic hurt economic activity severely. Manufacturing output grew 10.5%, mining production grew 19.5% and electricity output climbed 11.1%. In the April to July period, production surged 34.1% from the same period last year. (RTT)
Top Glove (Neutral: TP: RM4.40): Gets US nod to resume exports. Top Glove has received the go-ahead to resume exporting and selling gloves to the US, following modification of the finding by US Customs and Border Protection (CBP). (Bursa) Comments : We are of the view that the resumption is untimely given COVID-19 vaccine rollout is now gathering pace globally. The ban imposed had been dragging on for such a long time that the glove ASPs have begun to fall as more new capacity is available in the market from new and existing players. This is despite the demand for gloves remains relatively fair as the world continues to fight new variants of COVID-19. While this development would bring back additional c.15% of sales volume to the Group, we reckon that the recovery will take some time as some of the US customers may have already allocated the orders to other suppliers. No change to our earnings forecast as we have assumed this in our sales projection in FY22.
Greatech (Outperform, TP: RM7.70): Buys industrial land from Penang Development Corp worth RM16.8m for capacity expansion . Greatech Technology is buying a plot of leasehold land worth RM16.8m in Penang as part of its capacity expansion plan. The purchase is being undertaken via its wholly owned Greatech Integration (M) SB, who inked a sale and purchase agreement with Penang Development Corp. The land, which is presently vested in the State Authority of Penang, measures about 7.01 acres and located in Batu Kawan Industrial Park. (The Edge)
Kerjaya Prospek: Secures RM126.1m building works job . Kerjaya Prospek has accepted a contract worth RM126.1m from UEM Sunrise Bhd's subsidiary Sunrise Alliance SB to undertake building works for a proposed residential development project in Bandar Putra Permai in Petaling, Selangor. It said that the job entails two blocks of apartment with a seven-storey podium carpark including one level of common area and facilities. Works are expected to commence on Dec 15, 2021. (StarBiz)
SCIB: Clinches RM16.28m EPCC contract in Johor . Sarawak Consolidated Industries (SCIB) has clinched an engineering, procurement, construction and commissioning contract worth RM16.28m from Satria Kasturi (M) SB. The group said the contract spans 96 weeks from Oct 2021 to Aug 2023 and it entails the development of a solid waste transfer station in Pontian, Johor. (The Edge)
Ibraco: Plans private placement to raise up to RM23m for property development . Ibraco has proposed to undertake a private placement of up to 10% of its issued shares to raise up to RM23.33m to part finance an existing property development project. A maximum number of 49.64m new shares will be placed out to third party investors at an issue price to be determined later. (The Edge)
LYC Healthcare: Forms new unit to explore data centre related projects . LYC Healthcare has formed a new subsidiary to be used as a vehicle to explore data centre related projects in Malaysia. Known as Juniper DC SB, the subsidiary will provide infrastructure for hosting, data processing services and related activities, data processing activities, and research and development on information and communications technology. (The Edge)
The FBM KLCI might open lower today after US equities capped off their worst week in nearly three months on Friday as renewed concerns about inflation dented optimism over continued central bank support for financial markets. The S&P 500 closed down 0.8% while the tech-focused Nasdaq Composite fell 0.9%, representing weekly falls of 1.7% and 1.6%, respectively — their worst performances since mid-June. Investor confidence was knocked on Friday when data showed US factory gate prices rose 0.7% month on month in August, which exceeded economists’ expectations for a 0.6% increase. European stocks also ended the week weaker, with the region-wide Stoxx 600 benchmark closing down 0.3% for a weekly fall of 1.2%, its steepest slide since mid August.
Back home, the FBM KLCI bucked the regional market trend to end the week lower on the selling of selected heavyweights such as Kuala Lumpur Kepong Bhd (KLK), Hong Leong Financial Group Bhd, and Nestle (Malaysia) Bhd. At 5pm, the barometer index retreated 2.92 points to finish at 1,575.97 from Thursday’s close of 1,578.89. Regionally, Japan’s Nikkei 225 rose 1.25% to 30,381.84, Hong Kong’s Hang Seng Index increased 1.91% to 26,205.91, South Korea’s Kospi gained 0.36% to 3,125.76 and Singapore’s Straits Times Index advanced 1% to 3,102.54.
Source: PublicInvest Research - 13 Sept 2021
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TOPGLOVCreated by PublicInvest | Mar 21, 2024