Economy

US: Services index indicates modestly faster growth in Sept. Activity in the US service sector unexpectedly grew at a slightly faster pace in the month of Sept, according to a report released by the Institute for Supply Management. The PMI inched up to 61.9 in Sept from 61.7 in Aug. Economists had expected the index to edge down to 60.0. The uptick by the services PMI came as the business activity index climbed to 62.3 in Sept from 60.1 in Aug. (RTT)

US: Trade deficit widens to record USD73.3bn in Aug. A report released by the Commerce Department showed the US trade deficit widened by much more than expected in the month of Aug. The trade deficit widened to a record USD73.3bn in Aug from a revised USD70.3bn in July. Economists had expected the trade deficit to increase to USD70.5bn. The wider trade deficit came amid a jump in the value of imports, which surged up by 1.4% to USD287.0bn. (RTT)

EU: Business growth hurt by supply issues, pricing in Sept - PMIs. Business growth across Europe remained strong last month but elevated inflationary pressures put a dent in demand while ongoing supply issues constrained activity. HIS Markit's final composite Purchasing Managers' Index (PMI), seen as a good guide to economic health, sank to 56.2 last month from Aug's 59.0. A PMI for the services sector fell to 56.4 from 59.0. (Reuters)

EU: Producer price inflation accelerates in Aug. Eurozone producer price inflation accelerated in Aug driven by higher energy prices, data from Eurostat showed. Producer price inflation advanced to 13.4% from 12.4% in the previous month. Economists had forecast an annual rate of 13.5%. Excluding energy, producer price inflation rose to 7.4% from 6.8% in July. Energy prices grew sharply by 32% from the last year. Among other components, intermediate goods prices moved up 14.2%. (Reuters)

UK: Factories plan most widespread price hikes since 1980s - survey. More British manufacturers plan to raise their prices than at any other point in the past three decades, according to a survey that added to signs of growing inflationary pressure in the world’s fifth biggest economy. The net balance of factory firms expecting to hike their prices rose to +60% in the latest quarterly survey by the British Chambers of Commerce, up from +57% in the 2Q and the highest since the survey began in 1989. (Reuters)

UK: Car market logs weakest September since 1998. The UK car market registered its weakest Sept since 1998 ahead of the introduction of the two-plate system in 1999. Car sales were down sharply by 34.4% in Sept from last year, when pandemic restrictions were significantly curtailing economic activity. Registration of BEV surged 49.4% on a yearly basis. In the year to date period, new car registrations advanced 5.9% to 1.31m. (RTT)

India: Services growth slows in Sept. India's service sector grew at a softer pace in Sept, survey data from IHS Markit showed. The services Purchasing Managers' Index fell to 55.2 in Sept from 56.7 in Aug. Economists had forecast the index to rise to 57.0. New business inflow increased in Sept and employment growth ended in a nine month sequence of job shedding. Outstanding business declined for the second straight month in Sept. (RTT)

South Korea: Inflation slows to 2.5% on year in Sept. Overall consumer prices in South Korea were up 2.5% on year in Sept, Statistics Korea said. That was down from 2.6% on year in Aug, although it did beat forecasts for 2.25%. Core CPI, which excludes volatile food prices, rose 1.5%, accelerating from 1.3% in the previous month. Core CPI was down 0.1% on month after rising 0.3% in Aug. (RTT)

Singapore: Retail sales drop in Aug. Singapore retail sales dropped in Aug, data from the Department of Statistics showed. Retail sales fell 2.8% YoY in Aug, after a 0.2% rise in July. Motor vehicle sales declined 17.5% annually in Aug, following a 9.8% fall in the previous month. Excluding motor vehicles, retail sales remained unchanged yearly in Aug, after a 2.0% rise in the preceding month. (RTT)

Thailand: Sept CPI beats forecast as state subsidies end. Thailand’s headline CPI rose more than expected in Sept as government utility subsidies ended and energy prices increased. The CPI rose 1.68% in Sept YoY, the most in four months, compared with a forecast for a rise of 0.70% in a poll. It followed Aug’s 0.02% dip. Oct’s CPI is expected to be similar to Sept’s pace. (Reuters)

Markets

Solarvest Holdings: Bags RM46.75m solar PV installation deal from TNB Engineering. Solarvest Holdings has been appointed by TNB Engineering Corp SB to install a large-scale solar photovoltaic plant for RM46.75m. The solar farm will be situated at Bukit Selambau, Kedah and the project involves the installation of about 136,890 pieces of solar PV panels which are capable of generating up to 50-megawatt (MWac) of green energy. It is scheduled to reach commercial operation by the 1Q of 2023. (BTimes)

Caely: To boost fabric mask production. Caely Holdings is ramping up its fabric mask production and has allocated about RM5m as working capital for product diversification. Moving forward, Caely will be launching more new products to boost sales in the coming months with the hope to end the year on a high note under the new management. (The Edge)

Lien Hoe: Receives Johor PTG's approvals for a 27.93 hectares land in Masai. Lien Hoe Corporation has obtained Planning Permission Layout and Surrender Back and Re alienation approvals from Johor Land and Mines Department for a 27.93-hectare land that formed part of a larger mixed development located within Bandar Seri Alam in Masai, Johor. (The Edge)

SC Estate Builder: Inks MoU to acquire land from Kedah royalty for 100MW solar power plant or ESG project. SC Estate Builder inked a memorandum of understanding with Kedah royalty to acquire a piece of land measuring 104.62 hectares in Kedah. The company proposed to build a 100MW solar power plant or environment, social and governance (ESG) initiative projects in Kedah (The Edge)

Kelington: Bags RM40m job to build gas systems distribution works for Singapore fab. Kelington Group has bagged a contract worth RM40m to build specialty gas systems distribution works for a new fab in Singapore. It said the works shall commence in mid-Oct 2021 and are expected to be completed by Dec 2022. (The Edge)

Federal International: Sells land, buildings to accelerate push into renewable energy. Federal International Holdings has entered into a sale and purchase agreement with Filtermation (Mfg) SB for the disposal of all leasehold industrial land together with a single-storey furniture factory with an annexed double storey office building and other ancillary buildings for RM24.5m cash. (SunBiz)

Muar Ban Lee: Plans private placement to raise up to RM25.69m to repay bank borrowings. Muar Ban Lee Group has proposed to undertake a private placement of up to 20% of its total number of issued shares to raise up to RM25.69m to repay bank borrowings. (The Edge)

Oil & Gas (Overweight): Petronas in deal with Sarawak Petchem. Petroleum Nasional (Petronas) has entered into an agreement with Sarawak Petchem SB to provide advisory and technical support services for Sarawak’s first mega methanol plant. (Starbiz)

Market Update

The FBM KLCI might open higher today as surging energy prices intensified inflationary pressures on Tuesday, sending the yield on the 10-year Treasury note higher, while US equities rebounded after a global downturn at the start of the week. US oil prices hit a seven-year high on Tuesday after OPEC stuck to its crude production plans, snubbing calls from the White House to increase output to help tackle a growing global energy crunch. Brent crude hit a three-year high while US natural gas futures surged, settling at their highest level since 2008. The rise in energy prices helped to push one measure of inflation expectations in the US to the highest level since June. The 10-year break-even inflation rate rose to 2.46%, pulling the 10-year Treasury yield up with it. The S&P 500 stock index closed 1.1% higher on Tuesday, reversing losses tallied on Monday when the benchmark closed at its lowest level since late July. The technology-heavy Nasdaq Composite, which fell on Monday as higher government bond yields and a temporary outage across Facebook’s platforms knocked richly valued growth stocks, advanced 1.3%. Across the Atlantic, Europe’s Stoxx 600 closed up 1.2%, led by tech and banking stocks. London’s FTSE 100 closed the day up 0.9%.

Back home, the benchmark FBM KLCI on Bursa Malaysia ended at an intraday high on Tuesday, spurred by bargain hunting in selected heavyweights. At 5pm, the key index rose 7.95 points to end the day at 1,530.42 from Monday’s close of 1,522.47. The index, which opened 0.23 of-a-point lower at 1,522.24, moved to as low as 1,515.54 during the day. In the region, Hong Kong’s Hang Seng index earlier closed up 0.3%, while the Nikkei lost 2.2%.

Source: PublicInvest Research - 6 Oct 2021