Economy

US: Weekly jobless claims total 351,000, worse than expected. First-time filings for unemployment benefits jumped last week, hitting the highest level in a month, the Labor Department reported. Initial claims for the week ended Sept. 18 on a seasonally adjusted basis totaled 351,000, an increase from the previous week’s upwardly revised 335,000 and well ahead of the 320,000 Dow Jones estimate. The total was the highest since the week of Aug 21. (CNBC)

US: Business borrowing for equipment rises 21% in Aug – ELFA. Borrowings by US companies for capital investments rose 21% in Aug from a year earlier, the Equipment Leasing and Finance Association (ELFA) said. The companies signed up for USD8.5bn in new loans, leases and lines of credit last month, up from USD7bn a year earlier. However, borrowings fell 14% from the previous month. Aug data show some softness in equipment demand resulting from a mix of summer doldrums, continued supply chain disruptions and lingering pandemic-related woes. (Reuters)

EU: German private sector growth slows sharply in Sept. Germany's manufacturing sector expanded at the slowest pace in eight months in Sept, due to ongoing supply disruptions and rising prices, while the service sector growth lost steam after a strong rebound as economic activity recovered after the Covid-19 pandemic, results of a survey showed. The flash purchasing managers' index for the factory sector fell to 58.5 from 62.6 in Aug, preliminary results of the latest Purchasing Mangers' survey by IHS Markit showed. (RTT)

EU: French manufacturing sentiment weakens in Sept. Sentiment among French manufacturers weakened in Sept due the marked deterioration in the assessment of past production, foreign orders and personal production expectations, survey results from the statistical office Insee showed. The business confidence index fell to 106 in September from 110 in August. The index was forecast to fall marginally to 109. (RTT)

UK: BOE sees inflation above 4%, hints at tightening ahead. The Bank of England left its key interest rate at a record low and quantitative easing unchanged, but markets are pricing a rate hike next year after the bank warned that inflation is set to peak above 4% this winter. The latest statement from the Bank of England suggested that policy tightening is nearing. (RTT)

UK: BOE holds rate; QE. The BOE maintained its key interest rate at a record low and quantitative easing, as widely expected. The Monetary Policy Committee (MPC) unanimously decided to leave the key interest rate unchanged at 0.10%. The MPC also retained the existing stock of corporate bond purchases at GBP20bn and the government bond purchases target at GBP875bn, taking the size of total quantitative easing to GBP895bn. (RTT)

UK: Private sector logs weakest growth in 7 months. The UK private sector grew at the slowest pace in seven months in Sept as the shortage of materials and labour constrained business activity and pushed up inflationary pressures, flash survey data from IHS Markit showed. The Chartered Institute of Procurement & Supply composite output index fell to 54.1 from 54.8 in Aug. The score was also below economists' forecast of 54.5. (RTT)

Japan: August consumer prices flat YoY – govt. Japan’s core consumer prices were flat in Aug, ending a decline for the first time in 13 months, data by the Ministry of Internal Affairs and Communications showed. The so-called core-core inflation index, which excludes food and energy prices and is similar to the core index used in the US, fell 0.5% in Aug YoY. The core consumer price index data, which excludes volatile fresh foods but includes oil products, matched a median market forecast for a flat reading, following the prior month’s 0.2% decline, far below the Bank of Japan’s 2% inflation target. (Reuters)

India: Sept edible oil imports seen rising 59% YoY - industry official. India’s edible oil imports in Sept could jump as much as 59% from a year ago to 1.65m tonnes as refiners raised purchases after the government slashed import duty ahead of key festivals, the head of an industry body said. The world’s biggest edible oil importer could make purchases of as much as 1.4m tonnes in Oct, said Atul Chaturvedi, president of the Solvent Extractors Association of India. (Reuters)

Singapore: Inflation slows slightly in Aug. Singapore consumer price inflation moderated slightly in Aug reflecting lower private transport price growth, data published by the Monetary Authority of Singapore and the Ministry of Trade and Industry showed. CPI slowed to 2.4% from 2.5%. The rate came in line with economists' expectations. The moderation reflected lower private transport inflation, which more than offset the rise in core inflation. Private transport costs rose at a slower pace of 10.8%, largely due to the smaller increase in car prices and the decline in other private transport services costs. (RTT)

Thailand: Car sales slump to 15-month low in Aug on outbreak curbs. Thailand’s domestic car sales tumbled 38.8% in Aug from a year earlier as stricter coronavirus containment measures hit economic activity, the Federation of Thai Industries (FTI) said. However, the curbs, imposed in July and Aug, have been eased here from this month, which the FTI said should boost car sales later this year. In Aug, sales dropped to 42,176 vehicles, the lowest level in 15 months, after July’s 11.6% YoY fall to 52,442 units, the FTI said. (Reuters)

Markets

AirAsia (Neutral, TP: RM0.86): Expects strong recovery for air travel soon. AirAsia expects a strong recovery for air travel in all key domestic destinations and for international flights to resume in the near future, complemented by stringent health and safety protocols that the airline has put in place. (The Edge)

DNeX: Completes acquisition of remaining 50% stake in UK based greenfield asset. Dagang NeXchange (DNeX), via its 90% owned subsidiary Ping Petroleum Ltd, has announced the completion of the acquisition of the remaining 50% interest in the UK North Sea Block. (The Edge)

Pan Malaysia Corporation: MUI Group's PMC to buy 51% stake in A&W Malaysia. Pan Malaysia Corporation (PMC) has proposed to acquire a 51% share in A&W (Malaysia) SB from Inter Mark Resources SB for RM21.04m to expand into the rapidly growing quick-service restaurant (QSR) business. (StarBiz)

Radiant Globaltech: Expands offerings to include omnichannel commerce automation. Radiant Globaltech is expanding its retail technology solutions offering to include offline-to-online omnichannel commerce automation following its 70% stake acquisition in World Pos SB for RM1.1m cash. The deal comes with a profit guarantee of RM350,000 for 15 months until Dec 31, 2022. (Sunbiz)

ARB: Launches self-developed cloud-based company secretary platform. ARB has launched its self-developed cloud company secretary platform “ARB Cloud Cosec” to fully automate the existing company secretary services. (Sunbiz)

Latitude Tree: Posts record revenue for FY21 on higher demand for furniture in the US. Latitude Tree Holdings’ profit surged by more than six times to RM2.57m in 4QFY21, from RM407,000 a year ago. (The Edge)

United Malacca: 1Q net profit jumps five-fold, Indonesia ops break even. United Malacca posted a more than five-fold jump in net profit to RM20.85m in 1QFY22, from RM3.55m a year earlier, as higher crude palm oil (CPO) and palm kernel prices saw its Indonesian operations break. (The Edge)

KPower: Posts RM37.4m net profit in FY21, despite Covid-19 setbacks. KPower’s earnings slipped in 4QFY21 due to the Covid-19 pandemic, but the group is optimistic that its businesses will pick up pace in the coming year. (Starbiz)

Yinson: Reports third straight quarterly earnings growth. Yinson made net profit in 2QFY22 climbed 26% to RM126m from RM100m made a year ago, boosted by higher contribution from its engineering business. Revenue was up to RM1.05bn compared with RM995m previously. (Starbiz)

Central Global: Anticipates drop in export, domestic sales in upcoming quarters. Central Global posted a wider net loss of RM516,000 in 2QFY22 from RM184,000 net loss a year ago. (BTimes)

Market Update

The FBM KLCI might open higher today after the Dow Jones Industrial Average broke out of its September slump with its biggest two-day rally in more than six months, lifted by investors’ growing confidence the economy can withstand the end of pandemic stimulus measures and troubles in Chinese property markets. Bank stocks and shares of energy companies surged. Brent crude, the international gauge of oil prices, hit a nearly three year high at more than $77 a barrel. Benchmark government bond yields, which tend to rise when investors expect growth and inflation, posted their biggest one-day climb since March. The blue-chip index added 506.50 points, or 1.5%, to 34764.82 in its largest one-day surge since July. The S&P 500 gained 53.34 points, or 1.2%, to end at 4448.98, while the Nasdaq Composite Index added 155.40, or 1%, to 15052.24 points. All three indexes are now higher on the week. European markets ended mixed with the DAX higher by 0.06%, while the CAC 40 and the FTSE 100 down 0.43% and 0.07% respectively.

Back home, the benchmark FBM KLCI jumped 10.32 points, or 0.67%, to 1,539.34, from Wednesday’s close of 1,529.02. The index, which opened 3.31 points higher at 1,532.33, moved between 1,531.18 and 1,539.73 throughout the day. Key regional markets are also in the green following positive signs overnight from Wall Street’s performance and easing concerns about the impact of Evergrande Group's debt issue. Hong Kong-listed shares of Evergrande jumped nearly 18%, though remained down more than 80% for the year. Hong Kong’s Hang Seng Index, which bore the brunt of the selling pressure at the start of the week, climbed 1.2% to end the day. China’s Shanghai Composite Index rose 0.4%.

Source: PublicInvest Research - 24 Sept 2021