Economy

US: Homebuilder confidence edges up in Sept, survey shows. Confidence among US single-family homebuilders edged up in Sept, reversing a three-month decline as elevated costs for some building materials including softwood lumber eased, a survey showed. The National Association of Home Builders/Wells Fargo Housing Market Index rose one point to 76 last month. A reading above 50 indicates that more builders view conditions as good than poor. Builder sentiment hit an all-time high of 90 last November as the COVID-19 pandemic fuelled a housing market boom, with more people forced to work from home. (Reuters)

EU: Germany's Jan-July oil imports fall 7.9%, bill rises 29.7%. German crude oil import volumes fell 7.9% in the first seven months of 2021 YoY as the COVID-19 pandemic and related lockdowns hit industry, but the bill was up by nearly a third due to higher prices, official data showed. Oil volumes in Jan through July fell to 44.9m tonnes from 48.7m in the same months of 2020, statistics from the BAFA foreign trade office showed. Russia accounted for 33.6% of  Germany’s oil imports in the period, followed by 19.1% from the British and Norwegian North Sea, while imports from members of the OPEC contributed 16.0%. (Reuters)

EU: Germany producer price inflation fastest since 1974. Germany's producer prices increased in Aug at the fastest pace since 1974, data from Destatis revealed. Producer price inflation rose to 12% in Aug from 10.4% in July. This was the biggest growth since Dec 1974, when prices were up 12.4% amid the first oil crisis. On a monthly basis, producer prices advanced 1.5%, but slower than the 1.9% increase seen in July. Excluding energy, producer prices grew 8.3%. The annual growth was largely driven by the 24% increase in energy prices. Intermediate goods prices climbed 17.1%. (RTT)

UK: House prices at all-time high in Sept: Rightmove. The average price of property coming to the UK housing market hits a new all-time high in Sept despite the traditional summer holiday lull, data from property website Rightmove showed. The average asking price was GBP338,462. Nonetheless, Rightmove said this new record high was only GBP15 higher than the previous record set in July, a sign that prices are now stabilizing. Fierce competition continued among buyers for the record low number of available properties for sale. (RTT)

UK: Set for most widespread pay rises in over a decade – CBI. More British employers are planning pay rises than at any time since the global financial crisis as they struggle to recruit staff following the coronavirus pandemic and Brexit, data from the Confederation of British Industry showed. The CBI said 44% of businesses intended to raise pay in line with inflation and 24% planned above-inflation pay rises, the highest combined percentage since it started surveying businesses about this in 2009. (Reuters)

Hong Kong: Economy expands as estimated in Q2. The Hong Kong economy grew as initially estimated in the 2Q, the Census and Statistics Department said. GDP increased 7.6% in real terms in the 2Q over a year earlier, compared with the 8.0% expansion in the 1Q. The rate came in line with the estimate published on Aug 13. On a quarterly basis, GDP was down 0.9% in the 2Q, as initially estimated, following first quarter's 5.5% increase. The Hong Kong economy remained on track for recovery in the 2Q alongside the improving global economic conditions and receding local epidemic, the agency said. (RTT)

Hong Kong: Inflation slows in Aug. Hong Kong's consumer price inflation eased in Aug, data from the Census and Statistics Department showed. The composite consumer price index rose 1.6% YoY in Aug, after a 3.7% increase in July. Excluding the effects of all government one-off relief measures, the composite consumer price index increased 1.2% yearly in Aug, following a 1.0% rise in the previous month. (RTT)

Indian: Mills hold off on signing new sugar export deals as local prices jump. Indian mills are holding off on signing new sugar export contracts for the upcoming season as a rally in domestic prices to a 4- year high widened the gap between local and global rates, industry officials told Reuters. Lower shipments from India could support global prices, as supplies from top producer Brazil are expected to decline, and traders were banking on India to compensate for the shortfall. (Reuters)

Markets

Sime Darby Property (Outperform, TP: RM0.79): Reopens sales galleries, projects resume. Sime Darby Property which has set a RM2.4bn sales target for FY21, announced it has reopened its sales galleries and resumes operations at all project sites. (StarBiz)

Techna-X: Temporarily cease metallurgical coke business. Techna-Xwill temporarily cease its loss-making metallurgical coke business operations by 4QCY21. The coke business, which has been classified as “discontinuing operation”, remained in dire situation, as it recorded a cumulative net loss of about RM59.1 million for the six-months period ending June 30, 2021. (Bernama)

GFM: Inks JV to upgrade highway rest area in Melaka. GFM Services is partnering Amzass (M) SB to upgrade the northbound and southbound Bemban lay-bys in Melaka located along the PLUS Malaysia Bhd North-South Expressway into Rest and Service Areas (RSA). (The Edge)

Hup Seng: Estimates 3% production volume loss on operations suspension. Hup Seng Industries (HSIB) said the Covid-19-driven temporary suspension of the operations is expected to result in production volume loss of about 3% of annual output volume. (The Edge)

Kejuruteraan Asastera: In pact with YL Global Ventures to enter robotics solutions business. Kejuruteraan Asastera ( KAB) executed a term sheet with YL Global Ventures SB (YLGV) to commence a new venture into the robotics solutions business. (Sunbiz)

MAHB: Istanbul airport’s passenger traffic rebounds to 90% of pre-pandemic level. Malaysia Airports Holdings’ (MAHB) Turkish asset Istanbul Sabiha Gokcen International Airport (ISG) registered 3.2m passenger movements last month, equivalent to 90% of pre-pandemic volume of Aug 2019. (BTimes)

Hong Leong Industries: Profit jumps in FY21. Hong Leong Industries recorded a higher net profit of RM291.88m in FY21 from RM169.32m in FY20. Revenue edged up to RM2.63bn from RM2.31bn previously contributed by higher sales across all product segments and improved operational efficiencies which reduced cost. (StarBiz)

Kimlun: Returns to the black in 2Q from a year ago, but profit drops QoQ on FMCO effect. Kimlun Corp's net profit fell 74% to RM2.38m in 2QFY21 from RM9.12m in the immediate preceding quarter of 1QFY21. (The Edge)

MUI Properties: Declares first dividend in 10 years after weathering challenging FY21. MUI Properties announced an interim dividend of 0.45sen per share, payable on Sept 22 despite construction delays. The group, which is developing Bandar Springhill in Negeri Sembilan, posted a net profit of RM7.67m or 1.04 sen per share for FY21. (The Edge)

Market Update

The FBM KLCI might open lower today after Wall Street added to the global fall in equities on Monday as the liquidity crisis at Chinese property developer Evergrande shook stock markets in Asia, Europe and the US. The S&P 500 fell 1.7%, marking its worst day of trading since May. It dropped as much as 2.9% earlier on Monday, but recovered some of its losses in late afternoon trading. The sell-off hit the entire market, with just 50 stocks in the benchmark index finishing the day in the green. Energy stocks were the worst hit, along with financial groups and companies that produce basic materials. The technology-heavy Nasdaq Composite slid 2.2%. Shares in Evergrande, the world’s most indebted property developer, closed 10% lower in Hong Kong to hit their weakest level since May 2010. Concerns about the broader health of China’s real estate sector triggered a wider sell-off, sending the Hang Seng Property index, which tracks a dozen listed developers, down almost 7% to its lowest point since 2016. At 24,099 points, Hong Kong’s broader Hang Seng index closed at its lowest level since October last year. The Hang Seng Index in Hong Kong fell 3.3% to its lowest close since last October, while the Stoxx Europe 600 dropped 1.7%.

Back home, the FBM KLCI ended Monday in red for the seventh consecutive session despite foreign investors returning to the market, pushed down by the selling of selected heavyweight counters led by Sime Darby Plantation Bhd and Top Glove Corp Bhd. At 5pm, the benchmark FBM KLCI lost 20.62 points or 1.33% to 1,527.89 from Friday’s close of 1,548.51. Exchanges in mainland China and Japan were closed for a public holiday.

Source: PublicInvest Research - 21 Sept 2021