Economy

US: Construction spending unexpectedly flat in Aug. With an increase in spending on public construction offset by a dip in spending on private construction, the Commerce Department released a report showing US construction spending came in flat in the month of Aug. The report said construction spending came in virtually unchanged at an annual rate of USD1.584trn in Aug after rising by 0.3% to a revised  rate of USD1.584trn in July. Economists had expected construction spending to increase by another 0.3%. Spending on private construction edged down by 0.1% to a rate of USD1.242trn in Aug from a revised rate of USD1.244trn in July. A 0.4% increase in residential construction spending was offset by a 1.0% slump in non residential construction spending. (RTT)

US: Manufacturing growth accelerates in Sept, but supply chain issues persist. A report released by the Institute for Supply Management showed an unexpected acceleration in the pace of growth in US manufacturing activity in the month of Sept. The ISM said is manufacturing PMI crept up to 61.1 in Sept from 59.9 in Aug, with a reading above 50 indicating growth in the manufacturing sector. The uptick surprised economists, who had expected the index to edge down to 59.6. Manufacturing performed well for the 16th straight month, with demand, consumption and inputs registering MoM growth. The report showed the new orders index came in unchanged from the previous month at 66.7, while the production index slipped to 59.4 in Sept. (RTT)

US: Consumer sentiment improves more than initially estimated in Sept. A report released by the University of Michigan showed consumer sentiment in the US improved by more than previously estimated in the month of Sept. The report said the consumer sentiment index for Sept was upwardly revised to 72.8 in Sept from a preliminary reading of 71.0. Economists had expected the consumer sentiment index to be unrevised from the preliminary reading, which was still slightly higher than the nearly ten-year low of 70.3 hit in Aug. The report showed the current economic conditions index edged up to 80.1 in Sept from 78.5 in Aug, while index of consumer expectations rose to 68.1 from 65.1. (RTT)

US: Personal income edges Up 0.2% In Aug, slightly less than expected. After reporting a sharp increase in US personal income in the previous month, the Commerce Department released a report showing personal income edged up by slightly less than expected in the month of Aug. The Commerce Department said personal spending crept up by 0.2% in Aug after jumping by 1.1% in July. Economists had expected income to rise by 0.3%. (RTT)

EU: Inflation hits highest level in 13 years as energy prices soar. Eurozone inflation hit its highest level in 13 years in Sept, as the bloc battles surging energy costs. Headline inflation came in at 3.4% last month, according to preliminary data from Europe’s statistics office Eurostat. This was the highest level since Sept 2008 when inflation stood at 3.6%. It comes after German consumer prices rose by 4.1% in Sept, the highest level in almost 30 years. The rise has been driven higher by surging energy prices, deepening concern among policymakers. The front-month gas price at the Dutch TTF hub has risen almost 400% since the start of the year. (CNBC)

EU: Manufacturing growth continues to ease in Sept. Eurozone manufacturing activity continued to ease in September as supply-side constraints dampened production, survey results from IHS Markit showed. The final manufacturing Purchasing Managers' Index fell to 58.6 in Sept from 61.4 in Aug. This was the lowest since Feb and below the 'flash' print of 58.7. The headline index logged its largest fall since Apr 2020. The headline IHS Markit/BME final manufacturing PMI came in at an eight-month low of 58.4 in Sept, down from 62.6 in Aug and the flash score of 58.5. The final factory PMI fell to 55.0 from 57.5 in Aug. The flash reading was 55.2. Italy's manufacturing upturn remained strong in Sept. (RTT)

EU: Germany retail sales rebound in Aug. Germany's retail sales rebounded in Aug but at a slower-than-expected pace, data published by Destatis showed. Retail sales grew 1.1% MoM in Aug, reversing a 4.5% fall in July. Economists had forecast a monthly growth of 1.5%. On a YoY basis, retail sales growth held steady at 0.4% in Aug. This was much slower than the expected growth of 1.9%. Sales of food, beverages and tobacco were down 6.6%, while non-food product sales advanced 4.9%. Retail turnover was up by 6.0% on the pre crisis month of Feb 2020. In nominal terms, retail sales increased 1.2% MoM and advanced 2.4% YoY in Aug. (RTT)

UK: Manufacturing upturn slows in Sept. The UK manufacturing sector upturn slowed in Sept as supply chain delays, slow new order growth and higher cost weighed on production, final data from IHS Markit showed. The final Chartered Institute of Procurement & Supply manufacturing Purchasing Managers' Index fell to a seven-month low of 57.1 in Sept from 60.3 in Aug. The flash reading was 56.3. Production increased at the slowest pace since Feb. Upturns at medium and large-scale producers were offset by a continued downturn among small firms. New orders also rose at the weakest pace since Feb as export orders contracted for the first time in eight months. Over 62% of companies forecast their output would increase during the coming twelve months. (RTT)

Japan: Consumer confidence highest since Feb last year. Japan's consumer confidence rose to the highest level in nineteen months in Sept, data from the Cabinet Office showed. On a seasonally adjusted basis, the consumer confidence index increased to 37.8 in Sept from 36.7 in Aug. The latest index was the highest since Feb last year when it was 38.4. Among the four sub-indexes of the consumer confidence index, the index for overall livelihood rose to 39.2 in Sept. The indicators measuring the income growth increased to 38.1 and employment grew to 36.1. The index reflecting households' willingness to buy durable consumer goods rose to 37.8. The latest survey was conducted on Sept 15 among 8,400 households. (RTT)

India: Manufacturing PMI expands at a faster pace in Sept. A gauge of activity across India’s manufacturing sector expanded at a faster pace in Sept than in the preceding month. The IHS Markit India Manufacturing Purchasing Managers’ Index stood at 53.7 in Sept against 52.3 in Aug, according to a media statement. A reading above 50 indicates economic expansion. Companies benefited from strengthening demand conditions amid the easing of Covid-19 restrictions, said IHS Markit. With sales rising at a stronger rate, firms scaled up production and purchased additional inputs. There was also a faster upturn in international sales and an improvement in business confidence. (Bloomberg)

Indonesia: Inflation stands at 1.60% in Sept as govt approves spending budget for 2022. Indonesia's Central Agency of Statistics (BPS) reported that the country's annual inflation rate stood at 1.60% in Sept 2021, higher than the 1.42% in Sept 2020. Last month's figure was also slightly higher than Aug's annual inflation rate of 1.59%. In another development, the Indonesian parliament had already approved the government's spending budget of IDR2,714.15trn (USD190bn) for 2022. The approved target is slightly higher than the earlier proposed budget of IDR2,708.68trn (USD189.60bn). Furthermore, the updated budget is also higher than this year's budget outlook of around IDR2,697trn (USD188.79bn). (StarBiz)

Markets

Serba Dinamik (Neutral, TP: RM0.31): Restructures, appoints Mohamed Ackiel as new deputy CEO. Serba Dinamik Holdings is implementing an internal restructuring exercise which entails the appointment of Dr Mohamed Ackiel Mohamed as deputy CEO. The company said the restructuring exercise also includes the appointment of a few key management personnel as heads of region where the global integrated oil and gas (O&G) service provider has a strong presence. (StarBiz)

KPJ (Neutral, TP: RM0.94): TPG, Johor Corp weigh taking KPJ Healthcare private — sources . US private equity firm TPG Capital and Malaysian state-owned investment company Johor Corp are considering a plan to take KPJ Healthcare private, according to people with knowledge of the matter. The San Francisco-based firm and the investment arm of the Johor state government are in talks with banks to finance the potential deal involving Malaysia’s largest private-hospital operator, said the people. (Bloomberg)

CTOS: Bank Negara temporarily suspends credit reporting agencies' access to CCRIS services . CTOS Digital said Bank Negara Malaysia (BNM) has temporarily suspended the Central Credit Reference Information System (CCRIS) services to credit reporting agencies. The group said its wholly-owned subsidiary CTOS Data Systems SB had received a letter/directive from the central bank regarding the temporary suspension of access, effective Oct 1. (The Edge)

Velesto: Secures USD12.4m contract from Petronas Carigali . Velesto Energy (VEB) has secured a USD12.4m contract from Petronas Carigali SB for the provision of jack-up drilling rig services. “The contract is for the provision of jack-up rig, namely NAGA 2, with an estimated contract value of USD12.4m,” VEB said. VEB said Velesto Drilling SB (VED), a wholly-owned subsidiary of Velesto Malaysian Ventures SB, which in turn is a wholly-owned subsidiary of VEB received the letter of award. (StarBiz)

T7 Global: Terminates MoU with Mitsui E&S to supply ships in Vietnam. T7 Global said the MoU it entered into with Japanese's Mitsui E&S Shipbuilding Co Ltd, under which the groups planned to collaborate and explore opportunities for the supply of ships in Vietnam, has been mutually terminated. (The Edge)

Landmarks: Sells lands in Indonesia’s Treasure Bay Bintan for RM195m to Singapore’s Blumont. Landmarks is selling its entire stakes in five of its subsidiaries to Singapore’s Blumont Group Ltd for a combined SGD63.4m (RM195.1m), which would be fully satisfied via the issuance of new shares in Blumont. Landmarks said these companies are involved in operations and/or own lands located in Chill Cove – a 52-hectare waterfront resort city located within Treasure Bay Bintan on the Indonesian island of Bintan, developed by Landmarks and its subsidiaries. (The Edge)

Hong Seng: To acquire 51% stake in Covid-19 antibody testing kit distributor . Hong Seng Consolidated announced that it will be acquiring a 51% stake in Covid-19 antibody testing kit distributor RZAC Immunesafe SB for RM20m. Hong Seng said its wholly-owned subsidiary HS Bio SB has entered into a shares sale agreement with Datuk Seri Shahril Mokhtar, Datuk Wan Khalik Wan Muhammad and RZAC Business SB to undertake the proposed acquisition. (The Edge)

Market Update

The FBM KLCI might open higher today as Wall Street charted a recovery on Friday after closing September with the worst monthly performance since the coronavirus-induced rout of March 2020. The S&P 500 rose 1.2% on Friday, although the gain was not enough to recoup losses on Tuesday and Thursday that left the blue-chip index down 2.2% for the week. The benchmark fell almost 5% last month, pushed lower by concerns about slowing economic growth and persistent inflation, at the same time policymakers signal they are ready to tighten policy. Meanwhile, the Dow Jones Industrial Average—which snapped a five-quarter winning streak Thursday—rose 482.54 points, or 1.4%, to 34326.46 and the technology-focused Nasdaq Composite Index rose 118.12 points, or 0.8%, to 14566.70. Surging energy prices and risks of a slowdown in China’s industrial and property sectors helped to propel the marketwide weakness. But data on Friday showed stronger-than-expected consumer spending in the US in August, helping to allay some concerns around the slowing expansion. Europe’s regional Stoxx 600 index, which rallied to a record in early September before losing 3.4% over the month, closed 0.4% lower while London’s FTSE 100 dropped 0.8%.

Source: PublicInvest Research - 4 Oct 2021