Economy

US: Business inventory accumulation slows in July. US business inventory accumulation slowed in July as motor vehicle retailers struggled to restock amid an ongoing global semiconductor shortage, which is forcing automobile manufacturers to scale back production. Business inventories rose 0.5% after increasing 0.9% in June, the Commerce Department said. Inventories are a key component of GDP. Inventories rose 7.2% on a YoY basis in July. (Reuters)

US: Retail sales surprise to upside in strong boost to economy. US retail sales unexpectedly increased in Aug, likely boosted by back- to-school shopping and child tax credit payments from the government, which could temper expectations for a sharp slowdown in economic growth in the 3Q. The surprise rebound in retail sales reported by the Commerce Department defied slumping consumer confidence. (Reuters)

US: Weekly jobless claims rebound from pandemic-era low. First time claims for US unemployment benefits rebounded by slightly more than expected in the week ended Sept 11th, according to a report released by the Labor Department. The initial jobless claims climbed to 332,000, an increase of 20,000 from the previous week's revised level of 312,000. (RTT)

EU: Trade surplus rises on higher exports. The euro area trade surplus increased in July on higher shipments, first estimate from Eurostat revealed. The trade surplus increased to a seasonally adjusted EUR13.4bn from EUR11.9bn in June. Exports increased 1% MoM, while imports grew only 0.3%. On an unadjusted basis, exports of goods registered an annual growth of 11.4% and imports posted 17.1% expansion. (RTT)

UK: Over 40% of larger businesses struggling to recruit. British businesses have reported a sharp rise in recruitment difficulties within the space of just a few weeks, partly as a result of a continued lack of European Union workers, official figures showed. Some 41% of companies with 10 or more staff reported greater than usual recruitment challenges in the two weeks to Sept. 5. (Reuters)

UK: Slower growth, high inflation make awkward reading for Bank of England. Bank of England rate-setters who may be tempted to vote next week for an early end to their COVID-19 stimulus plans are likely to hold off for now, with a slowing economy but surging inflation making for a tricky backdrop. While the BoE has said it expects inflation to rise to around 4% around the end of the year before fading away, the rise in prices has put officials under more pressure. (Reuters)

China: Jan-Aug FDI up 22.3% YoY in yuan terms. Foreign direct investment (FDI) into China in the first eight months of the year jumped 22.3% from the same period last year to CNY758.05bn (USD117.7bn), China’s commerce ministry said. Non-financial outbound direct investment (ODI) for January-August period dropped 1.3% from a year earlier to CNY459.11bn. (Reuters)

India: Coal-fired power output falls 1.5%, renewables jumps in Sept. India’s coal-fired electricity generation so far this month fell 1.5% from year earlier, while power output from renewable energy jumped 53.6%, government data showed. The slowdown in coal-fired power output and a pickup in renewable energy generation could provide relief to utilities across the countries which are struggling with a coal shortage. (Reuters)

Japan: Downgrades economic view. Japan's government downgraded its economic assessment amid rising downside risks from the current domestic and overseas infections and negative effects through the supply chains. The Japanese economy remains in picking up, although the pace has weakened in a severe situation due to the Novel Coronavirus. The government lowered its assessment of both private spending and industrial production. (RTT)

Japan: Has JPY635.4bn trade deficit in Aug. Japan posted a merchandise trade deficit of JPY635.4bn in Aug, the Ministry of Finance said. That was well shy of expectations for a shortfall of JPY47.7bn following the downwardly revised JPY439.4bn surplus in July (originally JPY441bn). Exports were up 26.2% on year, missing expectations for an increase of 34.0% and down from the 37.0% gain in the previous month. Imports surged an annual 44.7%. (RTT)

Markets

Yong Tai (Neutral, TP: RM0.31): Gets backing from new China partners to expedite 100-acre land development at Impression City, Melaka. Yong Tai has received backing from its new partners from China to resume development of its 100-acre land “Impression City” in Melaka, following a delay due to the Covid-19 pandemic. (The Edge)

Tropicana Corp: Issues RM270m perpetual sukuk. Tropicana Corp has successfully issued RM270m worth of perpetual sukuk that was given AIS rating and a stable outlook by the Malaysian Rating Corporation (MARC). The sukuk will be used to refinance existing debt obligations and to finance the group’s expenditures including working capital, investments or capital expenditure. (The Edge)

Pasukhas: Secures RM77m building and external work contract at Jalan Tun Razak. Pasukhas Group has secured a building and external work contract worth RM77m from Focus Dynamics’ subsidiary Famous Ambience SB to complete the construction of a commercial smart building at Jalan Tun Razak, Kuala Lumpur. The three-storey building will have two basement levels and a banquet hall. (The Edge)

MSM: Johor refinery expected to be profitable by early 2022. MSM Holdings is expecting its Johor refinery to turn profitable in 2022 once the utilisation factor breaches 50%. Currently, the Johor sugar refinery’s utilisation factor stands at 30% with a production volume of 300,000 tonnes. (The Edge)

QES Group: Acquires industrial land in Penang for RM4.79m. QES Group's (QGB) signed a conditional sale and purchase agreement (SPA) with Penang Development Corporation to acquire an industrial land in Penang for RM4.79m. The purchase price is based on the land value within the Batu Kawan Industrial Park vicinity at RM55 psf. (BTimes)

SHL: Property development spurs SHL. SHL Consolidated’s net profit for its 1Q ended June 30, 2021, rose to RM9.74m from RM1.53m in the previous corresponding period, mainly due to higher revenue generated by its property development segment. Revenue in the 1Q grew to RM33.61m from RM7.13m a year earlier. (StarBiz)

Subur Tiasa: Posts RM19.4m net profit in 4Q. Subur Tiasa Holdings posted its highest quarterly profit in more than 10 years, as palm oil prices jumped to multiple-year highs. The group's timber operations also reported improved results due to increased sales volume. Net profit in the three-month ended July 31 was RM19.4m compared with a loss of RM26.7m made a year ago. Revenue rose to RM106m from RM72m previously. (StarBiz)

Airlines (Underweight): Domestic air travel on path of strong rebound. Both AirAsia and Malaysia Airlines’ maiden flights from Kuala Lumpur to Langkawi saw a full flight load, signifying a strong rebound for domestic air travel. AirAsia Malaysia CEO Riad Asmat said in less than a week, it has sold over 200,000 seats to Langkawi. It also ready to scale up our operations to meet overwhelming demand. (SunBiz)

Market Update

The FBM KLCI might open lower today as US stocks and government bonds slipped on Thursday after stronger than expected data on American retail sales raised expectations that the Federal Reserve would soon begin reining in its stimulus efforts. Wall Street’s blue-chip S&P 500 and Dow Jones indices both closed down 0.2% in New York. The technology-heavy Nasdaq Composite index retraced its earlier move lower and ended the day up 0.1%. US Treasury prices were also under pressure, pushing the yield on the benchmark 10-year note up 0.04 percentage points to 1.34%. The soft session came after a report from the commerce department showed US retail sales climbed 0.7% in August compared with July, widely topping economists’ expectations for a 0.8% decline. The positive data bolster Fed chair Jay Powell’s signal in August that the world’s most influential central bank could begin slowing its USD120bn-a month asset purchase programme this year. The Fed meets next week, when traders will watch closely for any update on plans to “taper” its bond-buying programme.

Stocks in Europe fared better than those on Wall Street, with the region-wide Stoxx 600 benchmark closing up 0.4%, buoyed by the continent’s travel and leisure sector that jumped 3.4% after the Irish low-cost carrier Ryanair raised its traffic growth outlook. In Asia, Hong Kong’s Hang Seng index lost 1.5% after Beijing’s intensifying focus on sectors spanning gambling to education knocked investor sentiment. The casino group Sands China was among the biggest fallers for the second day in a slide triggered by efforts from Macau’s government to tighten oversight of the industry. The Hang Seng gauge has shed almost 6% this week, leaving it on track for its worst run since the market tumult in March last year.

Source: PublicInvest Research - 17 Sept 2021