Economy

Global: IMF cuts its global growth forecast, citing supply disruptions and the pandemic. The International Monetary Fund is now less optimistic about the global economy for 2021, but still sees reasonable growth over the medium term. In its World Economic Outlook, published, the Fund said it expects global gross domestic product to grow by 5.9% this year — 0.1 percentage point lower than its July estimate. For next year, the IMF has kept its global growth projection at 4.9%. (CNBC)

US: A record 4.3m workers quit their jobs in Aug, led by food and retail industries. Workers left their jobs at a record pace in Aug, with bar and restaurant employees as well as retail staff quitting in droves, the Labor Department reported. Quits hit a new series high going back to Dec 2000, as 4.3m workers left their jobs. The quits rate rose to 2.9%, an increase of 242,000 from the previous month, which saw a rate of 2.7%, according to the department’s Job Openings and Labor Turnover Survey. (CNBC)

EU: German ZEW economic sentiment at 19-month low. German economic confidence deteriorated for the fifth consecutive month to hit the lowest since March 2020 amid supply bottleneck and higher input prices, survey results from the ZEW - Leibniz Centre for European Economic Research showed. The ZEW Indicator of Economic Sentiment dropped to 22.3 in Oct from 26.5 in Sept. The reading was below the economists' forecast of 24.0 and was the lowest since March 2020, when the score was -49.5. The indicator for the current economic situation declined 10.3 points to 21.6 in Oct. This was the first time that the indicator has recorded a decline after its continuous increase between Feb and Sept 2021. (RTT)

UK: Employment at record high. The UK payroll employment as well as job vacancies reached record levels at the end of the 3Q as the economy recovers from the pandemic-driven downturn. The number of payroll employees showed a monthly increase of 207,000 to reach a record 29.2m in Sept, the Office for National Statistics reported. In three months to Sept, job vacancies hit a record high of 1,102,000, with the majority of industries growing on the quarter. The rate of quarterly growth was highest in transport and storage. (RTT)

UK: BRC retail sales grow at slower pace in Sept. UK retail sales growth eased sharply in Sept as fuel shortages and wetter weather weighed on consumer confidence, data published by the British Retail Consortium and KPMG showed. Retail sales grew only 0.6% on a yearly basis in Sept after rising 3% in Aug. At the same time, like-for like sales fell 0.6% annually. An uncertain backdrop and slower growth means the 4Q is looks challenging as the economic recovery is dependent on strong retail sales during the festive season. (RTT)

China: Liberalises coal-fired power pricing to tackle energy crisis. China will allow coal-fired power plants to charge some customers market-driven prices for electricity, as a worsening energy crisis persuaded authorities to rush through their boldest reform of the power sector in decades. Responding to shortfalls in power generation brought on by shortages and record high prices for coal, the government has taken a range of steps to boost coal production and manage electricity demand at industrial plants. (Reuters)

Japan: Factory mood hits lowest since April on virus drag - Reuters Tankan. Japanese manufacturers were least optimistic in six months in Oct as they suffered from the impact of the coronavirus pandemic and automakers' output cuts, the Reuters Tankan poll showed. The Reuters Tankan index readings are derived by subtracting the percentage of respondents who say conditions are poor from those who say they are good. A negative reading means that pessimists outnumber optimists. (Reuters)

India: Inflation slows more than expected. India's consumer price inflation slowed more than expected in Sept, while industrial production grew in line with expectations in Aug, official data showed. The consumer price index rose 4.35% YoY following a 5.30% in Aug. Economists had forecast a 4.50% increase. The food price inflation eased to 0.68% from 3.11% in the previous month. (RTT)

Korea: Bank of Korea retains key rate; signals rate hike in Nov. Bank of Korea maintained its key interest rate but signaled a rate hike as early as in Nov to rein in high inflation and household debt. The Monetary Policy Board of the Bank of Korea decided to leave its base rate unchanged at 0.75%. The bank had raised its rate by a quarter point in Aug. Governor Lee Ju-yeol said the bank can consider hiking key rate at the next meeting should the economic recovery proceed as expected. (RTT)

Markets

Genting Malaysia (Neutral, TP: RM3.25): To inject another USD150m into Empire Resorts. Genting Malaysia (GenM) is injecting another USD150m (RM625m) into its US-based unit Empire Resorts Inc mainly for the repayment of short-term debts. It entered into an agreement to subscribe for up to USD150m of additional Series L Preferred Stock of Empire. (The Edge)

Ni Hsin: Partners MNA Energy to develop battery technology for EV motorcycles. Ni Hsin Group has partnered with MNA Energy SB (MNAE) to develop battery technology for electric motorcycles (EV two wheelers). It has entered into a head of agreement with MNAE for such collaboration that also includes participation in the latter’s business and growth. (The Edge)

MyEG: Inks blockchain backbone, supernodes deal with China's CAICT. MY E.G. Services signed a MoU with the Institute of Industrial Internet & IoT, China Academy of Information and Communications Technology (CAICT) of China on blockchain technology. The MoU is for the international extension of China's national blockchain network, Xinghuo Blockchain Infrastructure and Facility. (BTimes)

Lion Industries: Sells Antara Steel for RM664m. Lion Industries Corp is selling its 100% stake in Antara Steel Mills SB to Esteel Enterprise Pte Ltd for USD158.82m or about RM663.85m under an all-cash deal. It had entered into a conditional sale and purchase agreement for the proposed disposal of its entire 218m shares and 30m redeemable preference shares in Antara. (BTimes)

Bintulu Port: Bags RM25m maintenance dredging work contract. Bintulu Port Holdings has bagged a 5-year contract from See Song & Sons SB for maintenance dredging works at Samalaju Industrial Port in Bintulu, Sarawak, worth RM25.29m. Bintulu Port said its subsidiary Samalaju Industrial Port SB has issued the letter of acceptance for the contract. (The Edge)

Tan Chong: Terminates MoU to exclusively distribute microbus in Vietnam. Tan Chong Motor Holdings and Chinese firm Xiamen King Long United Automotive Industry Co Ltd have mutually agreed to terminate a MoU signed within relation to the exclusive rights to distribute the latter's Kinggo microbus model in Vietnam in both completely built-up and completely knocked-down forms. (The Edge)

Ramssol: In regional pact with AI firm Laiye. Ramssol Group has partnered with artificial intelligence robotic process automation (AI-RPA) firm, Laiye for intelligent automation technology across Southeast Asia. Through the partnership, Ramssol was tapping into the automation training business by providing RPA skills training to equip employees or jobseekers with a broad range of AI- RPA knowledge, concept and functionality. (BTimes)

Jade Marvel: Plans private placement to raise funds for frozen food processing and money lending businesses. Jade Marvel Group has proposed a private placement of up to 20% of its issued shares to raise as much as RM22.42m mainly for its frozen food processing and money lending businesses. The placement may involve the issuance of up to 43.11m new Jade Marvel shares. (The Edge)

Market Update

The FBM KLCI might open lower today after Wall Street’s blue-chip S&P 500 index closed down 0.2%, following a choppy session on Monday where an initial boost for energy stocks faded as questions about economic growth came to the fore. The technology-focused Nasdaq Composite was down 0.1%. Communications stocks led losses among the S&P 500’s 11 sectors, declining more than 1%. Google parent Alphabet Inc. slid USD49.30, or 1.8%, to USD2,728.98 and Facebook Inc. fell USD1.68, or 0.5%, to USD323.77. Steeply rising bond yields and regulation issues have dragged down tech shares in recent sessions. Europe’s Stoxx 600 benchmark was volatile on Tuesday, dropping 1.2% in early dealings to fall about 5% below its all-time high reached in mid-August, before closing the session 0.1% lower. London’s FTSE 100 index closed down 0.2%.

Back home, Bursa Malaysia’s barometer index ended the day above the 1,580 level, thanks to gains in bank as well as telecommunication counters. At the closing bell, the FBM KLCI ended at its intra-day high of 1,583.91, by adding 13.09 points compared with 1,570.82 at Monday’s close. In the region, China’s CSI 300 fell 1.1%, with the stocks of utilities dropping the most amid an electricity shortage driven by a lack of adequate coal supplies. Tokyo’s Nikkei 225 lost 0.9% as utilities’ shares fell along with highly valued technology stocks that are vulnerable to the prospect of US interest rates rising.

Source: PublicInvest Research - 13 Oct 2021