Economy

US: Consumer sentiment steadies in Sept after Aug plunge – UMich. US consumer sentiment steadied in early Sept after plunging the month before to its lowest level in nearly a decade, but consumers continue to have a bleak view of the outlook amid a stiff bout of inflation. The University of Michigan said its consumer sentiment index edged up to 71 in the first half of Sept from 70.3 in Aug - the lowest since Dec 2011. Economists polled by Reuters had forecast a reading of 72. (Reuters)

EU: Eurozone inflation accelerates as estimated in Aug. Eurozone inflation accelerated as initially estimated in Aug to a near decade high, final data from Eurostat showed. Inflation rose to 3% in Aug from 2.2% in July. This was the highest since Nov 2011 and also exceeded the ECB's 2% target. Rising costs - from shipping to energy - are likely to push euro-zone inflation up even further in the coming months. (RTT)

EU: Eurozone construction output grows in July. Eurozone's construction output grew for the first time in four months in July, data from Eurostat showed. The construction output gained 0.1% MoM in July, after a 0.6% decrease in June. Production in building construction increased 0.4% monthly in July, while output in civil engineering declined 1.7%. On a YoY basis, the construction output gained 3.3% in July, after a 4.1% growth in the prior month. (RTT)

UK: Retailers extend losing streak in Aug. British retail sales unexpectedly fell again last month in what is now a record streak of monthly declines, adding to concerns about economic recovery although sales volumes remain well above pre-pandemic levels. Sales have fallen steadily since a peak in April shortly after COVID-19 restrictions were lifted on shops. (Reuters)

UK: Inflation expectations rise in August: BoE/Kantar Survey. Britons' inflation expectations for the coming year increased in Aug, the latest Bank of England/Kantar Inflation Attitudes Survey showed. Inflation for the coming year was seen at 2.7% versus 2.4% in May. Inflation expectations for the twelve months after that climbed to 2.2% from 1.9% in the prior survey period. (RTT)

China: Seen holding benchmark rate in Sept, some expect more liquidity support. China is set to leave its benchmark lending rate steady for the 17th month at its Sept fixing, a Reuters survey showed, but market participants expect more targeted liquidity measures as the economy grapples with the fallout of the Delta variant. Nineteen traders and analysts, or 95% of 20 participants, in the snap poll predicted no change in either the one-year Loan Prime Rate (LPR) or the five-year tenor after the PBOC kept the interest rate on its medium-term loans steady this week. (Reuters)

Markets

AirAsia X (Underperform, TP: RM0.01): Recapitalisation discussions progressing well. AirAsia X has made “substantial progress” in months-long talks with creditors as it aims to convene meetings with them to vote on a restructuring scheme by the end of October. Negotiations and discussions with lessors, planemaker Airbus SE and service providers have progressed, but declined to detail what had been agreed. (StarBiz)

Gadang: Bags Central Spine road subcontract worth RM100m. Gadang Holdings, has secured a RM100.34m subcontract works for Central Spine Road Package 2 from Binary Vista SB. It would be the subcontractor to undertake demolition, site clearance, earthwork and access bridge to Kuala Berang, Terengganu. (StarBiz)

Ni Hsin: To explore partnership in EV bike development. Ni Hsin Grouphas teamed up with Dongguan Tailing Motor Vehicle Co Ltd to explore opportunities in the electric vehicles (EV) space in Malaysia and Asean for commercial purposes. (StarBiz)

Handal: Secures contract from Tanjung Offshore for provision of portable crane equipment. Handal Energy has secured a new contract from Tanjung Offshore Services SB for the provision of portable crane equipment and services package. The contract commenced on July 2 and the estimated completion date is in Dec 2021. (The Edge)

Southern Cable: Receives a nod from Bursa Malaysia to transfer listing. Southern Cable Group (SCG) received approval from the Securities Commission Malaysia to transfer its listing status to the primary market of Bursa Malaysia which is expected in the 4Q of 2021. (BTimes)

Hup Seng: Temporarily suspends operation of Johor plant's packaging machine for disinfection. Hup Seng Industries has temporarily suspended the operation of its Johor plant's packaging machine for disinfection purposes to curb the spread of Covid-19. (The Edge)

Bioalpha: Forms joint-venture for commercialisation of proprietary herbal products in China. Bioalpha Holdings has signed an agreement with Suzhou Medicalsystem Technology Co Ltd (MEDIC) for the commercialisation of Biolapha’s proprietary herbal formulations and products in China in the near future. (The Edge)

Perdana Petroleum: 2Q net loss widens to RM39.12m due mainly to asset impairment. Perdana Petroleum's net loss for the 2Q ended June 30, 2021 widened to RM39.12m from RM2.88m recorded a year ago, on the back of a nearly 36% drop in quarterly revenue at RM38.56m. (The Edge)

Revenue Group: 4Q net profit down 66% QoQ on lower EDC terminal sales. Revenue Group saw its net profit for its 4QFY21 fall 65.5% to RM1.28m from RM3.71m in 3QFY21 on lower sales of electronic data capture (EDC) terminals. although rental and maintenance returns rose. This is on the back of a 39.6% QoQ decline in revenue to RM17.55m. (The Edge)

Market Update

The FBM KLCI might open lower today after US stocks fell on Friday to their lowest level in almost a month while Treasuries were knocked, as investors grappled with signs of slowing global economic growth and the implications for monetary policy. The S&P 500 index fell by 0.9% on Friday, its lowest point in four weeks, having lost about 2% in September so far. The technology focused Nasdaq Composite also shed 0.9% on the day, with both indices falling for the second consecutive week. In Europe, the Stoxx 600 equity gauge fell 0.9%, finishing the week down 1%. The yield on the 10-year US Treasury note added 0.03 percentage points to 1.36% ahead of the Federal Reserve’s meeting this week, at which it is expected to offer clues about when it will reduce its USD120bn a month of crisis-era bond purchases. In Europe, the Stoxx 600 index had spent most of Friday in the black before turning lower to reflect the cautious mood on Wall Street. The pan continental Stoxx Europe 600 fell 0.9% to 461.84. European travel shares rallied throughout Friday as UK media reports suggested the government would ease restrictions and quarantine rules in time for the school half-term break.

Back home, Bursa Malaysia ended the week in the red, dragged down by selling of selected heavyweight counters, led by Top Glove Corp Bhd and IOI Corp Bhd. At 5pm, the benchmark FBM KLCI closed 6.75 points lower at 1,548.51 from Wednesday’s close at 1,555.26. In the region, most major benchmarks rose. The Shanghai Composite Index edged up 0.2%, while Hong Kong’s Hang Seng closed up 1%. The mainland China benchmark fell 2.4% for the week after a range of Chinese economic indicators signaled a pullback in growth and giant property developer Evergrande’s debt problems weighed on sentiment.

Source: PublicInvest Research - 20 Sept 2021