Economy

US: GDP spikes 6.7% in 2Q, slightly more than previously estimated. Economic growth in the US accelerated by slightly more than previously estimated in 2Q, the Commerce Department revealed in revised data released. The Commerce Department said real GDP shot up by 6.7% in 2Q compared to the previously reported 6.6% spike. Economists had expected the jump in GDP to be unrevised. The upwardly revised GDP growth in the 2Q reflects a modest acceleration from the 6.3% surge seen in 1Q. The slightly stronger than previously estimated growth reflected upward revisions to consumer spending, exports, and private inventory investment. Meanwhile, the upside was limited by an upward revision to imports, which are a subtraction in the calculation of GDP. (RTT)

US: California muddies US weekly jobless claims; labor market recovering. California announced on Sept. 17 that about 340,000 people on the Pandemic Emergency Unemployment Compensation (PEUC) program, which expired on Sept. 4, had been transferred to the Federal State Extended Duration program that remained in effect until Sept. 11. Initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 362,000 for the week ended Sept. 25. That was the third straight weekly increase. Claims in California increased 17,978 last week, adding to the 17,218 rise in the prior week. (Reuters)

EU: Jobless rate falls marginally in Aug. The euro area unemployment rate dropped marginally in Aug, data from Eurostat revealed. The jobless rate fell to 7.5% in Aug, in line with expectations, from 7.6% in July. In the same period last year, the unemployment rate was 8.6%. The number of people out of work decreased 261,000 to 12.162m in Aug. Compared to last year, unemployment was down 1.861m. The youth unemployment rate came in at 16.4% in Aug versus 16.7% in July. The overall unemployment rate in the EU dropped to 6.8% in Aug from 6.9% in July. (RTT)

EU: German unemployment falls in Sept despite supply bottlenecks. German unemployment fell in Sept, official figures showed, suggesting that supply chain bottlenecks hitting industrial firms have not yet taken toll on recovery in Europe’s biggest economy. The Labour Office said the number of people out of work fell by 30,000 in seasonally adjusted terms to 2.508 million. A Reuters poll had forecast a fall of 33,000. The seasonally-adjusted jobless rate remained unchanged at 5.5%. The labour market continues with its positive development. Unemployment and underemployment are both falling significantly. (Reuters)

EU: French producer price inflation accelerates. France's producer price inflation accelerated further in Aug, mainly driven by surging prices of coke and refined petroleum products, preliminary data from the statistical office INSEE showed. The total producer price index rose 9.5% YoY following an 8.4% increase in July. Producer prices for coke and refined petroleum products jumped 63.7% YoY. Manufactured product prices rose 7.2%. Producer price inflation in the home market climbed to 10.0% from 9.0% in the previous month. Prices in the foreign market increased 8.4% annually after a 7.1% increase in the previous month. (RTT)

EU: Italy inflation increases in Sept. Italy's consumer price inflation increased in Sept, preliminary estimates from the statistical office Istat showed. Consumer prices increased 2.6% YoY in Sept, following a 2.0% rise in Aug. Economists had forecast a rise of 2.4%. On a MoM basis, consumer prices fell 0.1% in Sept. Economists had expected a 0.3% decline. The core inflation rose to 1.1% in Sept, following a 0.6% gain in the prior month. Inflation, based on the harmonized index of consumer prices, rose to 3.0% in Sept from 2.5% in the previous month. Economists had forecast a rise of 3.0%. (RTT)

UK: Economy bounced back by more than estimated in 2Q before slowdown. UK's economy grew by more than previously thought in the Apr-June period before what looks like a sharp slowdown more recently as post-lockdown bottlenecks, including a shortage of truck drivers, mount. GDP increased by 5.5% in the 2Q, the Office for National Statistics said, stronger than its preliminary estimate of growth of 4.8%. The ONS said the data had been adjusted to take account of more complete data from the health sector as well as an update of its sources and methodology for calculating output. The revision means UK is no longer the worst-performing economy among Group of Seven developed countries. (Reuters)

UK: Car production declines on chip shortage. UK car production declined sharply in Aug largely due to the global shortage of semiconductors, data published by the Society of Motor Manufacturers and Traders, or SMMT, showed. Car output declined 27% YoY in Aug. This was the second consecutive fall in production. The lobby said global chip shortage as well as some extended summer factory shutdowns dented overall performance. Production for domestic market grew 3.3%, while that for foreign market was down 32.5%. About 29,200 cars were shipped overseas, with the decline driven by falling exports to faraway markets including Australia, the US and China. Production in the YTD remained up, by 13.8%, to 589,607 cars, driven by exports with 83.2% of everything made heading for markets abroad. (RTT)

Japan: Housing starts growth eases in Aug. Japan's housing starts increased at a softer pace in Aug, data from the Ministry of Land, Infrastructure, Transport and Tourism showed. Housing starts increased 7.5% YoY in Aug, after a 9.9% rise in July. Economists had forecast an annual 9.5% rise. Annualized housing starts decreased to 855,000 in Aug from 926,000 in the previous month. Data also showed that construction orders received by big 50 contractors declined 2.0% YoY in Aug, following a 3.4% decrease in July. (RTT)

Markets

Solarvest: Unit bags RM22.2m rooftop solar contract in Kedah. Solarvest Holdings wholly-owned unit Solarvest Energy SB (SESB) has secured a contract from NEFIN Solar Asset 2 SB worth RM22.2m. SESB has been appointed as the sub contractor for the provision of engineering, procurement, construction, and commissioning of a rooftop solar photovoltaic energy generating facility for XSD International Paper located at Kulim Hi-Tech Park in Kedah. (The Edge)

NPC Resources sells 2,105 acres of oil palm land in Sabah to Kretam for RM53m. NPC Resources is proposing to dispose of a total of 2,105 acres of oil palm land in Sabah to Kretam Holdings for RM52.72m. Its subsidiaries Seraya Plantation SB and Bonus Indah SB have received acceptance offers from Kretam’s unit Syarikat Kretam Plantations SB. (The Edge)

BP Plastics: Announces 1-for-2 bonus issue, free warrants. BP Plastics has proposed a bonus issue of one new share for every two held. The group also announced free bonus warrants on the basis of one warrant for every five shares held. The entitlement dates for the two issues will be determined later. The proposals, which are subject to shareholders' approval, could involve the issuance of 93.84m bonus shares, and up to 37.53m warrants. (The Edge)

Kanger: To sell buildings, land in China for RM258.9m. Kanger International is selling its two commercial buildings and land in Ganzhou city, China for RM258.9m. Its subsidiary Ganzhou Kanger Industrial Co Ltd had entered into a letter of intent (LOI) with Huizhou ZhongNeng Construction Ecological Resources Technology Co Ltd for the disposal. (BTimes)

Marine & General: KPMG flags material uncertainty for its ability to continue as going concern. Marine & General's (M&G) external auditor has issued an unqualified opinion with material uncertainty related to its ability to continue as a going concern. Messrs KPMG PLT drew attention to the marine logistics services provider’s net loss of RM218.88m for the FYE 30 April 2021, when the current liabilities of the group and company exceeded its current assets by RM18.64m and RM56.48m respectively. (The Edge)

Subur Tiasa: Independent advisor DWA Advisory tells Subur Tiasa shareholders to reject takeover offer. The unconditional mandatory takeover offer of Subur Tiasa Holdings by Tiong Toh Siong Enterprises SB (TTSE) has been deemed “not fair and not reasonable” by the independent advisor DWA Advisory SB. DWA Advisory said the offer price represents a discount of RM3.66 to RM3.84 or approximately 84.92% to 85.52% to the estimated value of each Subur Tiasa share of between RM4.31 and RM4.49 based on the sum-of-parts valuation method. As such, the offer is not fair, it said. (The Edge)

Ta Win: Terminates MoU with RR One Capital after unable to conclude JV talks. Ta Win Holdings has called off the memorandum of understanding (MoU) with RR One Capital, after parties were unable to conclude the discussions with details and terms of the joint venture (JV). (The Edge)

Market Update

The FBM KLCI might open lower today after Wall Street ended the day lower, closing its worst month since March last year. The S&P 500 index closed down 1.2% and was 4.8% lower for the month. The technology-heavy Nasdaq Composite fell 0.4%, taking its losses for the month to 5.3%. Europe’s Stoxx 600 index market ended September 3.4% lower, after falling 0.1% on Thursday, although some investors said they remained optimistic. Brent crude, the international oil benchmark, settled at USD78.52 a barrel, down 0.2%, after breaching the USD80 mark for the first time in almost three years earlier this week.

Back home, Bursa Malaysia ended lower on Thursday due to continued selling activities in telecommunications, media, industrial products and services counters, amidst cautious sentiments in the regional markets. At 5pm, the benchmark FBM KLCI shed 9.85 points or 0.64% to 1,537.80 from Wednesday’s close of 1,547.65. Key regional markets closed mixed as the energy crunch in China has hit industrial production, weighing on sentiment, while concerns about Chinese property giant Evergrande’s default risk eased after it reported plans to settle debt with a Chinese bank. China’s Shanghai Composite added 0.9% for the day and notched a 0.7% gain for the month. Hong Kong’s Hang Seng declined 0.4% in daily trading, extending its monthly losses to 5%. Concerns over Chinese growth and the resilience of its property sector have weighed on global sentiment this quarter.

Source: PublicInvest Research - 1 Oct 2021