Economy

US: Aug budget deficit falls as revenues recover. The US government posted a USD171bn budget deficit for August, 15% lower than the USD200bn gap a year ago, as recovery-driven tax receipts grew faster than outlays for COVID-19 pandemic relief programs, the Treasury Department said. The Aug deficit was USD2bn less than forecast. The August budget results would not alter the department’s estimates for when Treasury’s extraordinary financing measures to avoid breaching the USD28.4trn debt limit would be exhausted. Receipts in Aug rose 20% from the year-earlier period to USD268bn while outlays in the month were up 4% to USD439bn. (RTT)

US: Consumers' inflation expectations highest in 8 years, NY Fed says. US consumers’ expectations for how much inflation will change over the next year and the coming three years rose last month to the highest levels since 2013, according to a survey released by the New York Federal Reserve. Year-ahead inflation expectations increased for the 10th straight month to a median of 5.2% in Aug. (Reuters)

EU: Key gauge of euro zone inflation expectations at highest since mid-2015. A key market gauge of eurozone inflation expectations rose to its highest level since mid-2015, a further sign that investor perceptions over the direction of future inflation are shifting. Eurozone bond yields were broadly steady, although relief over a slowdown in the pace of European Central Bank purchases appeared to be in the past. (Reuters)

EU: German recovery will gain momentum in third quarter - economy ministry. The German economy will pick up steam in the 3Q, but business activity will cool again in the final three months of the year, the economy ministry said. Europe’s largest economy grew by 1.6% on the quarter from April to June, a weaker rebound than in many other European countries, as supply shortages for semiconductors and other intermediate goods held back the recovery from the pandemic. (Reuters)

EU: Germany wholesale price inflation strongest since 1974. Germany wholesale prices grew at the fastest pace since 1974 in August amid sharp increases in raw material and intermediate product prices, Destatis reported. Wholesale prices increased 12.3% on a yearly basis, following July's 11.3% in July. This was the strongest growth since October 1974, when prices were up 13.2% in the wake of the first oil crisis. On a monthly basis, wholesale price inflation slowed to 0.5% in August from 1.1% in July. (RTT)

Japan: Producer prices unchanged on month in August. Producer prices in Japan were flat on month in August, the Bank of Japan said, shy of expectations for an increase of 0.2% and down from 1.1% in July. On a yearly basis, producer prices gained 5.5%, beneath forecasts for a gain of 5.6%, which would have been unchanged from the previous month. Export prices were down 0.2% on month and up 10.9% on year, the bank said, while import prices rose 1.8% on month and surged 29.2% on year. (RTT)

Japan: Large companies' business sentiment turns positive. Confidence among Japanese larger companies turned positive in the third quarter, survey data from the Ministry of Finance showed. The Business Survey Index, or BSI, of larger companies climbed to +3.3 in the September quarter from -4.7 in the June quarter. The confidence index for the fourth quarter is forecast to rise to 6.8. The confidence index of manufacturers came in at 7.0 versus -1.4 a quarter ago. Likewise, sentiment among non-manufacturers improved to 1.5 from - 6.2 in the 3Q. (RTT)

India: Inflation slows in August. India's inflation slowed in Aug, defying expectations for stability, preliminary data from the statistics ministry showed. The consumer price index rose 5.30% YoY following a 5.59% climb in July. Economists had forecast 5.60% inflation. In the same month of 2020, inflation was 6.69%. The consumer food price index rose 3.11% annually after a 3.96% increase in the previous month. Compared to the previous month, the CPI rose 0.25%, while the CFPI decreased 0.12%. (RTT)

South Korea: Export prices jump 18.6% on year. Export prices in South Korea were up 18.6% on year in August, the Bank of Korea said, following the 17.4% increase in July. Export prices for manufacturing products advanced 18.6% on year and export prices for agricultural, forestry and marine products gained 9.6%. (RTT

Markets

Sunway: Sunway-Hoi Hup consortium wins Singapore's Flynn Park bid with RM1.15bn offer. Sunway Property and Hoi Hup intended to redevelop the site into modern private residential condominiums. It is sited on an elevated 1.94-hectare freehold plot of land and is located 350 metres from the Pasir Panjang MRT station on the Circle Line. Sunway Property's landbank to date stands at 1,351.24 ha with a potential gross development value of RM54.4bn. (Business Times)

Signature International: To sell land it bought for expansion in Bandar Baru Enstek for RM54.6m. Signature International plans to sell three contiguous plots of vacant freehold land in Bandar Baru Enstek, Negeri Sembilan for RM54.6m, cash. Of the proceeds, it plans to use RM34.1m to repay its bank borrowings and another RM18.9m to purchase raw materials for its existing and new projects. It also expects to realise an estimated disposal gain of RM13.6m from the sale. (The Edge)

Scientex: In RM345m takeover of subsidiary Daibochi. Scientex has proposed to launch a takeover of its subsidiary Daibochi 's remaining shares and warrants that it does not already own, at an offer price of RM2.70 per share and 32 sen per warrant, for a total of RM345.3m. (StarBiz)

Guan Chong: In talks to sell stake to Singapore-listed Olam International. Guan Chong has attracted the interest of Singapore-listed food and agri-business player Olam International Ltd. According to sources, Olam is looking to acquire a stake in Guan Chong to tap into its expanding cocoa grinding capacity globally. (The Edge)

OM Holdings: JV commences drilling in Bryah Basin. OM Holdings Ltd's joint venture with Bryah Resources Ltd has commenced drilling for manganese in the Bryah Basin, 150km north of the central Western Australian town of Meekatharra.the 2,000m drilling programme is planned to test some of the potentially concealed manganese targets identified by a geophysical survey in the vicinity of the Brumby Creek Prospect. (StarBiz)

UMW: Aug automotive sales leap 352% from July following resumption of operations. UMW Holdings posted a 351.9% leap in automotive sales to 9,512 units in August, from 2,105 units in July, after operations resumed following the easing of the Full Movement Control Order (FMCO) restrictions. UMWT delivered 2,524 units in Aug, 74% higher than the 1,450 units registered in July. (The Edge)

Pecca: Closes FY21 with a more than twofold jump in net profit, despite a weak 4Q. Pecca Group closed its financial year ended June 30, 2021 (FY21) with a more than twofold increase in net profit to RM19.23m, though its fourth quarter's (4QFY21) earnings fell to just RM26,000 from RM8.05m in 3QFY21. (The Edge)

Carimin: Posts RM2.1m profit in 2Q. Carimin posted a net profit of RM2.1m for the three-month ended June 30 compared with with a loss of RM4.4m made a year ago. Revenue, however, dropped by a third to RM40.7m from RM60.9m previously. The disruptions caused by the lockdown due to the pandemic at the project sites resulted in deferment of our onshore/offshore activities. (StarBiz

Market Update

The FBM KLCI might open softer today after US equities wavered on Monday, rallying back from earlier losses to break a five-day losing streak. The S&P 500 finished the day 0.2% higher. The technology-heavy Nasdaq Composite failed to regain positive territory, closing 0.1% lower. Last week was the worst for the S&P since June, although it remains close to the all-time high reached earlier this month, as investors fretted about the US Federal Reserve cutting its USD120bn a month of bond purchases designed to boost lending and spending during the pandemic. Comments in recent days from Fed officials, however, have suggested that potential tapering by the central bank meant policymakers thought the US economy was through the worst of the coronavirus crisis. Alongside energy, financials was among the top-performing sectors in the S&P 500 index on Monday, up by 1.1%. This helped the region-wide Stoxx Europe 600 benchmark close up 0.3%, ending five sessions of back-to-back falls. London’s FTSE 100, which has a heavy leaning towards oil and gas groups, advanced 0.6%, as did Frankfurt’s Xetra Dax.

Back home,

the FBM KLCI finished 0.37% lower, weighed down by selling in selected heavyweights led by Top Glove Corp Bhd. At 5pm, the benchmark FBM KLCI fell 5.84 points to 1,570.13 from Friday’s close of 1,575.97. Elsewhere, Japan’s Nikkei 225 added 0.2%, while Hong Kong’s Hang Seng Index fell 1.5%

Source: PublicInvest Research - 14 Sept 2021