Economy

US: Core consumer prices slow sharply in Aug. Underlying US consumer prices increased at their slowest pace in six months in Aug, suggesting that inflation had probably peaked, though it could remain high for a while amid persistent supply constraints. The Consumer Price Index excluding the volatile food and energy components edged up 0.1% last month. That was the smallest gain since Feb and followed a 0.3% rise in July. (Reuters)

US: Government aid helped reduce poverty in 2020, Census data shows. Direct cash payments to households and generous unemployment benefits helped to keep millions of Americans out of poverty after the coronavirus pandemic severely disrupted the US economy and pushed people out of work, according to a government survey released. The poverty rate dropped to 9.1% in 2020 from 11.8% in 2019, according to a measure that considers government support offered through programs such as food assistance and the stimulus checks. (Reuters)

UK: Unemployment drops, job vacancies at record high. The UK unemployment rate decreased in three months to July and job vacancies exceeded one million for the first time on record, data published by the Office for National Statistics showed. The unemployment rate dropped 0.3 percentage points from the previous quarter to 4.6% in three months to July. The rate came in line with economists' expectations. At the same time, the employment rate rose 0.5 percentage points to 75.2%. The number of employed persons increased 183,000 from the previous quarter to 32.35m. (RTT)

Japan: Industrial production falls as estimated. Japan's industrial production declined in July, as initially estimated, data from the Ministry of Economy, Trade and Industry said. Industrial production fell a seasonally adjusted 1.5% monthly in July, as estimated. Shipments decreased 0.3% on month in July and inventories fell 0.7% in. Meanwhile, the inventory ratio grew 1.0%. On a yearly basis, industrial production accelerated 11.6% in July, as initially estimated. Capacity utilization declined 3.4% monthly in July and gained 14.1% from a year ago. (RTT)

Japan: Manufacturers' sentiment weakens in Sept - Reuters Tankan. Japanese manufacturers' confidence fell to a five-month low in September, the Reuters Tankan poll found, as export-reliant firms such as carmakers suffered from a global chip shortage. The Reuters Tankan index readings are derived by subtracting the percentage of respondents who say conditions are poor from those who say they are good. A negative reading means that pessimists outnumber optimists. (Reuters)

India: Wholesale inflation accelerates unexpectedly. India's wholesale price inflation accelerated unexpectedly in Aug, after slowing in the previous month, preliminary data from the Ministry of Commerce & Industry showed. The wholesale price index rose 11.39% YoY following an 11.16% increase in July. Economists had forecast 10.75% inflation. The food index rose 3.43% annually in Aug following a 4.46% climb in the previous month. The manufactured products index rose 11.39% after an 11.20% increase in July. (RTT)

Australia: RBA Chief seeks to damp market expectations for early rate hike. RBA Governor Philip Lowe said the conditions required to lift the key cash rate would not be met before 2024 and market expectations for an early rate hike is out of place. While policy rates might be increased in other countries over this timeframe, the wage and inflation experience is quite different. Given that the recovery has been delayed, it would be appropriate to delay any consideration of a further taper in bond purchases until next year. (RTT)

Indonesia: Govt, key parliamentary body set 2022 GDP growth target at 5.2%. The Indonesian parliament’s budget committee and the government have agreed to set a 2022 economic growth target of 5.2%, roughly the midpoint of President Joko Widodo’s proposal for 5.0%-5.5%, the committee’s chair said. The committee and the government also tentatively agreed to raise the 2022 spending plans to IDR2,714.2trn (USD190.31bn). That is up slightly from the president’s proposal in Aug of IDR2,708.7trn, assuming a similar increase in revenues. The budget deficit target remains set at 4.85% of GDP. (Reuters)

Markets

AirAsia (Neutral, TP: RM0.86): Seen strong demand for travel to Langkawi. AirAsia has seen strong uptake of seats to Langkawi following the government’s announcement of the island’s travel bubble standard operating procedure last week. Airline sales were reaching 200,000 tickets for the route with the reopening of the island to vaccinated domestic tourists from Sept 16. (The Star)

OpenSys: Partners Fundaztic to launch Go-Green Financing Program on its buySolar platform. OpenSys (M)’s subsidiary OpenSys Technologies SB has partnered with the market operator of peer-to-peer (P2P) financing platform Fundaztic, Peoplender SB, to become the first P2P financier on OpenSys Technologies’ buySolar platform. (The Edge)

Kelington: Bags RM420m construction job in Sarawak. Kelington Group’s wholly-owned subsidiary, Kelington Technologies SB (KTSB) has bagged a construction contract worth RM420m from a manufacturing company in Kuching, Sarawak. (The Star)

GHL: Partners Atome to add buy-now-pay-later option to its payment touchpoints across ASEAN region. GHL Systems' payment touchpoints across Malaysia, Thailand, the Philippines and Indonesia will now be able to offer Buy-Now-Pay-Later (BNPL) option to consumers, as GHL partners with BNPL platform Atome to expand its payment offerings across the region. (The Edge)

Techna-X: Bags RM50.8m tech support contract. Techna-X's subsidiary, TouchPoint International SB and a technology solutions company have bagged a two-year technology development and support contract for RM50.8m from SHT Engineering SB (SHT). (Business Times)

Kejuruteraan Asastera : Enters into agreement to form JV for robotics distribution business. Kejuruteraan Asastera has entered into a term sheet agreement with YL Global Ventures SB (YLGV) to venture into robotics distribution business through the formation of a joint venture (JV). (The Edge)

HIL Industries: 2Q profit doubles on-year, boosted by stronger contribution from its manufacturing segment. HIL Industries’ net profit for the second quarter ended June 30, 2021 (2QFY21) nearly doubled to RM4.28m from RM2.15m in the same period last year, boosted by stronger contributions from its manufacturing segment. (The Edge)

Amcorp Properties: Sinks deeper into the red in 1Q despite higher revenue. Amcorp Properties sank into a deeper net loss of RM7.34m for the first quarter ended June 30, 2021 (1QFY22) from RM867,000 a year ago. This came despite revenue increasing 25.4% to RM26.17m for 1QFY22 from RM20.87m in the previous year. (The Edge)

Market Update

The FBM KLCI might open lower today after US government bonds rallied while bank shares weighed on major stock markets on Tuesday, as moderating US inflation warmed investors to the view that the Federal Reserve would have more time to remove crisis-era stimulus. Data released on Tuesday showed headline US consumer prices rose 5.3% in the year to August, a slight moderation from the 5.4% rate of inflation recorded in July. The S&P 500 closed the New York session down 0.6%, with financials the worst performing sector on the blue-chip index. The technology-focused Nasdaq Composite slid 0.4%. Across the Atlantic, the continent-wide Stoxx Europe 600 index closed roughly unchanged, while Germany’s Dax closed up 0.1%. The UK’s FTSE 100 closed 0.5% lower.

Back home, the FBM KLCI fell for the third straight day to close 14.62 points or 0.93% lower at 1,555.51, dragged by decline in banking stocks and as investors gauged the possibility of a windfall tax being levied on corporate Malaysia. Elsewhere in the region, Hong Kong's Hang Seng Index fell 1.21%, while Japan’s Nikkei 225 rose 0.73%, Singapore’s STI added 0.22% and the Jakarta Composite Index tacked on 0.67%.

Source: PublicInvest Research - 15 Sept 2021