Economy

US: Durable goods orders jump 1.8% in Aug, much more than expected. New orders for US manufactured durable goods increased by much more than expected in the month of Aug, according to a report released the Commerce Department. The report said durable goods orders jumped by 1.8% in Aug after rising by a revised 0.5% in July. Economists had expected durable goods orders to increase by 0.6% compared to the 0.1% dip that had been reported for the previous month. The bigger than expected increase in durable goods orders was largely due to a spike in orders for transportation equipment, which shot up by 5.5% in Aug after dipping by 0.4% in July. Orders for non-defense aircraft and parts led the way higher, soaring by 77.9% in Aug after plunging by 36.3% in July. (RTT)

EU: Eurozone M3 growth rises; credit to private sector rises at slower pace. Eurozone money supply growth accelerated in Aug, while credit to the private sector slowed further, data published by the ECB showed. The broad money supply M3 grew 7.9% YoY in Aug, following July's 7.6% increase. M3 was forecast to advance 7.8%. Likewise, growth in the narrow measure M1 increased to 11.1% from 11% a month ago. As regards the dynamics of credit, data showed that credit to the private sector logged an annual growth of 3.1%, slower than the 3.4% increase in July. Adjusted loans to the private sector also grew at a slower pace of 2.9% after climbing 3% in July. (RTT)

EU: Germany inflation to rise up to 5% temporarily. Germany's inflation is likely to rise sharply from the current level due to the VAT reduction in the previous year, Bundesbank said in its monthly report. From today's perspective, rates between 4% and 5% are temporarily possible from Sept until the end of the year, the bank said. However, economists expect inflation to fall noticeably at the beginning of next year, but will remain above 2% by the middle of the year. The central bank said the German economy continued the recovery that began in the spring at a faster pace. Overall, economic output is likely to grow more strongly in the third quarter than in the spring, the experts noted. (RTT)

EU: Italy non-EU trade surplus falls in Aug. Italy's surplus in the merchandise trade with countries outside the EU decreased in Aug, preliminary data from ISTAT showed. The non-EU foreign trade surplus fell to EUR 1.583bn in Aug from EUR 3.581bn in the same month last year. In July, the trade surplus was EUR 6.848 bn. Exports rose 15.7% YoY in Aug, after a 17.4% growth in July. Imports gained 39.9% in Aug, following 24.4% rise in the previous month. Compared to the previous month, exports fell a seasonally adjusted 5.0% and imports grew 6.5% in Aug. (RTT)

Japan: BoJ to persistently continue powerful easing to achieve price stability. The Bank of Japan will persistently continue with powerful monetary easing in order to achieve price stability target sustainably, Governor Kuroda Haruhiko said. In longer-term, even though the inflation rate will gradually rise toward fiscal 2023, the end of the current projection period, it will not reach the price stability target of 2%, he told business leaders in Osaka. Further, he said the mechanism for the economy to pick up has continued to work despite the successive waves of Covid-19. In a report released earlier, the BoJ said services producer price inflation eased marginally to 1% in Aug from 1.1% in July. On a monthly basis, services prices dropped 0.1%, in contrast to the 0.3% increase in the prior month. (RTT)

Japan: Leading index decreases as estimated in July. Japan's leading index decreased in July as initially estimated, final data from the Cabinet Office showed. The leading index, which measures the future economic activity, fell to 104.1 in July from 104.6 in June, as initially estimated. The coincident index decreased to 94.4 in July from 94.6 in the previous month. In the initial estimate, reading was 94.5. The lagging index declined to 95.3 in July from 94.2 in the prior month. According to the initial estimate, the reading was 93.8. (RTT)

Taiwan: Industrial production growth eases in Aug. Taiwan's industrial production increased at a softer pace in Aug, data from the Ministry of Economic Affairs showed. Industrial output grew 13.69% YoY in Aug, following a 14.36% increase July. The annual growth in manufacturing output eased to 14.62% from 15.52% in the previous month. Electricity, gas and water supply output rose 4.39%. Meanwhile, mining and quarrying declined 7.41% and water supply output decreased 0.36%. On a MoM basis, industrial production decreased 0.98% in Aug, following a 1.32% fall in the prior month. Separate data from the statistical office showed that the retail sales declined 4.28% yearly in Aug, following a 9.63% fall in July. (RTT)

Markets

Hextar Global (Outperform, TP: RM1.42): Executes RM50m financing facility to fund Nobel Group buy for its specialty chemicals' venture. Hextar Global has executed an RM50m financing facility from HSBC Amanah Malaysia to finance its purchase of Nobel Synthetic Polymer SB and Nobel Scientific SB, collectively known as the Nobel Group, which manufactures and supplies chemical derivatives, coating, and related products. (The Edge)

MRCB, George Kent: MRCB gets RM2.3m final award on costs in LRT3 project funding dispute with George Kent. Malaysian Resources Corp (MRCB) has received the final award on costs from the Asian International Arbitration Centre (AIAC), which mediated in the MRCB-George Kent (M) (MRCBGK) dispute involving both companies' shareholders’ agreement dated June 8, 2015. In the final award on costs, the arbitrator has ruled that George Kent (M) will pay MRCB RM2.08m, plus SGD70,458.50 (about RM217,935). (The Edge)

Straits Energy: And Seashore Tech team up, eye 4G and 5G deals. Straits Energy Resources has entered into a heads of agreement (HOA) with Seashore Technologies (Seashore Networks) to collaborate and participate in the growing wireless network communication business as part of the 4G and 5G rollout, and the digital transformation of the oil and gas industry (O&G) through the Internet of Things (IoT) in Malaysia and regionally. (SunBiz)

Dolomite: Applies for judicial management. Dolomite Corp has applied for a judicial management order which will enable the company to undertake a financial restructuring scheme in a bid to prevent it from being wound up. The application comes after it was served with a notice by the solicitors of Maybank International Labuan Branch over debts amounting to USD38.19m (RM160m) together with cost awarded by the court amounting to RM13,520. (The Edge)

Handal Energy: Bags another five-year contract from ExxonMobil. Handal Energy has bagged a five-year contract from ExxonMobil Exploration and Production Malaysia Inc to provide crane overhaul, repair, and refurbishment services. This is the second contract it has bagged from ExxonMobil in three months. On June 24, it had secured a five-year contract to provide crane operation and maintenance services. (The Edge)c

Seni Jaya: Gets shareholders' nod for bonus warrants issue. Shareholders of outdoor advertising services provider Seni Jaya Corp have approved the issuance of 24.3m bonus warrants on the basis of one bonus warrant for every two existing Seni Jaya shares at its extraordinary general meeting held. The exercise price of the warrants will be determined later. (The Edge)

Aemulus: Secures new orders worth RM4.5m. Aemulus Holdings said its wholly-owned subsidiary Aemulus Corporation SB (ACSB) has clinched new orders with a cumulative amount of approximately RM4.5m. The new orders were given by a customer in Malaysia for the delivery of test systems for the enterprise storage market, but the name of the customer was not specified. (The Edge)

Market Update

The FBM KLCI might open lower today after stock markets on Wall Street and in Europe wavered, despite an oil price rally lifting energy shares. The UK’s energy-heavy FTSE 100 index climbed 0.2%, but the Europe-wide Stoxx 600 slipped 0.2% as declines in technology and healthcare stocks offset gains in its energy subsector. Wall Street’s S&P 500 blue-chip share index closed down 0.3%, while the tech-heavy Nasdaq Composite fell 0.5%. Shares of small-cap companies in the Russell 2000 index shot 1.5% higher, while the Dow Jones Transportation Average — seen as an economic bellwether — also rose 0.9%. Both benefited as economic activity began to accelerate last year, but lost momentum as growth expectations were dialled back. The shift by central bank governors and the jolt higher in bond yields has helped to reignite the trade.

Back home, late buying in selected heavyweights lifted Bursa Malaysia out of negative territory to end slightly higher on Monday as investors digested the 12th Malaysia Plan (12MP) 2021-2025. At 5pm, the benchmark FBM KLCI rose 0.99 of-a-point or 0.06% to 1,533.05, from Friday’s close of 1,532.06. In the region, major benchmarks were mixed Monday. The Shanghai Composite Index slipped 0.8%, while Hong Kong’s Hang Seng Index edged up less than 0.1%.

Source: PublicInvest Research - 28 Sept 2021