Economy

US: Retail sales unexpectedly rise in Sept as consumers keep spending. Consumers spent at a much faster pace than expected in Sept, defying expectations for a pullback amid pervasive supply chain problems, the Census Bureau reported. Retail sales for the month increased by 0.7%, against the Dow Jones estimate for a decline of 0.2%. Excluding auto-related sales, the number rose 0.8%, better than the 0.5% forecast. Compared with a year ago, sales were up 13.9% on the headline number and 15.6% excluding autos. The increase came during a month when the government ended the enhanced benefits it had been providing during the Covid-19 pandemic and against forecasts that growth would slow in the third quarter due to the delta variant spread and a perceived pullback in consumer activity. (CNBC)

US: Consumer sentiment unexpectedly edges lower in Oct. Preliminary data released by the University of Michigan unexpectedly showed a modest deterioration in US consumer sentiment in the month of Oct. The report showed the consumer sentiment index slipped to 71.4 in Oct from 72.8 in Sept. The dip surprised economists, who had expected the index to inch up to 73.1. "Consumer sentiment has remained for the past three months at the lows first recorded in response to last year's shutdown of the economy," said Surveys of Consumers chief economist Richard Curtin. He added, "The Delta variant, supply chain shortages, and reduced labor force participation rates will continue to dim the pace of consumer spending into 2022." (RTT)

US: Business inventories increase in line with estimates in Aug. A report released by the Commerce Department showed US business inventories increased in line with economist estimates in the month of Aug. The Commerce Department said business inventories climbed by 0.6% in Aug, matching the increase seen in the previous month as well as economist expectations. Wholesale inventories led the way higher, jumping by 1.2%, while manufacturing inventories rose by 0.6% and retail inventories inched up by 0.1%. Meanwhile, the report showed business sales edged down by 0.1% in Aug after rising by 0.5% in July. (RTT)

EU: Eurozone Aug trade surplus falls. Eurozone visible trade surplus for Aug decreased from a year ago, defying expectations for an improvement, preliminary data from Eurostat showed. The goods trade surplus in Aug was EUR4.8bn versus EUR14bn in the same period last year. Economists had forecast a surplus of EUR16.1bn. Exports rose 18.2% YoY and imports grew 26.6%. In the Jan to Aug period, the trade surplus was EUR126.9bn versus EUR126.8bn in the same period last year. Exports grew 15.2% and imports rose 16.8%. On a seasonally adjusted basis, euro area trade balance was EUR11.1bn compared to EUR13.5bn in July. Exports rose 0.3% and imports increased 1.6% from the previous month. (RTT)

China: Chinese central bank official sees liquidity balanced, no big swings in 4Q . Liquidity in China's banking system will be basically balanced in the 4Q, with no big fluctuations, a central bank official said. The PBOC will stick to normal monetary policy, which will be flexible, targeted, and appropriate, Sun Guofeng, head of the central bank's monetary policy department, told a briefing. The PBOC will use various tools to keep liquidity reasonably ample and enhance stability of total credit growth, he said. "In the fourth quarter, supply and demand of liquidity in the banking system will continue to be basically balanced and there won't be any big fluctuations," Sun said. (Reuters)

Japan: Tertiary activity falls for second month . Japan's tertiary activity declined for the second straight month in August, data from the Ministry of Economy, Trade and Industry showed. The tertiary activity index fell 1.7% month-on-month in Aug, following a 0.6% decrease in July. Among the individual components, living and amusement-related services, transport and postal activities, retail trade, wholesale trade, medical, health care and welfare, electricity, gas, heat supply and water, and goods rental and leasing increased in Aug. Meanwhile, business-related services, real estate, finance and insurance, and information and communications increased. (RTT)

Indonesia: Trade surplus rises in Sept . Indonesia's trade surplus increased in Sept, figures from Statistics Indonesia showed. The trade surplus increased to USD4.37bn in Sept from USD2.386bn a year ago. Economists had expected a surplus of USD3.84bn. In Aug, the trade surplus was USD4.748bn. Exports grew 47.64% YoY in Sept. Economists had expected a rise of 51.57%. Imports rose 40.31% annually in Sept. Economists had forecast a increase of 50.0%. On a monthly basis, exports decreased 3.84% and imports declined 2.67% in Sept. (RTT)

Markets

TNB (Outperform, TP:RM12.42): Fibre unit Allo Technology appoints Juniper to undertake network infra upgrade. Tenaga Nasional’s 100%-owned ICT unit Allo Technology SdB has appointed New York-listed Juniper Networks to upgrade its network infrastructure as it moves to expand its fiberisation coverage nationwide to a targeted 180,000 premises by end-2021. (The Edge)

KPJ Healthcare (Neutral, TP:RM0.94): Revises down rental rate of Jeta Gardens elder care homes in Australia. KPJ Healthcare And Al Aqar Australia Pty Ltd are varying an existing lease agreement to revise the rental rate of the former's Jeta Gardens elderly care properties in Brisbane, Australia. (The Edge)

Bertam Alliance: Unit secures RM25m contract for constructing MACC office complex in Sabah. Bertam Alliance has secured a contract worth RM24.98m for the proposed construction of an office complex for the Malaysian Anti-Corruption Commission (MACC) in Sabah. (The Edge)

Kerjaya Prospek: Secures RM258m construction job. Kerjaya Prospek has accepted a RM258m contract from Teguh Harian Build-Tech SB for the construction of main building works for a proposed residential development project in Johor Baru, Johor. (SunBiz)

Sentral REIT: Plans to raise up to RM3bn via debt programmes for investments, working capital, and to refinance borrowings. Sentral REIT (formerly MRCB-Quill REIT) has lodged debt programmes with the SC, through which it plans to raise up to RM3bn in combined aggregate value to finance its investment activities and general working capital, as well as to refinance its borrowings. (The Edge)

NPC Resources: To sell agricultural lands in Sabah for RM53m. NPC Resources is disposing of four parcels of agricultural land in Kinabatangan, Sabah to Syarikat Kretam Plantations SB (SKPSB) for a total of RM52.72m. (The Edge)

XOX: To acquire 19% stake in Jadi Imaging for RM46m. XOX has entered into an agreement to acquire a 19.01% stake in Jadi Imaging Holdings for a purchase consideration of RM46m. Jadi is principally engaged in the business of development, formulation, and manufacturing of toners for laser printers, photocopiers, facsimile machines, and multifunction office equipment. (The Edge)

Jade Marvel: Plans JV in management of wellness-related biz via one-stop IT control system. Jade Marvel Group is planning to collaborate with a newly incorporated local private company to jointly undertake the management of wellness industry-related businesses via a one-stop information technology control system. (The Edge)

Duopharma: Distributes Sinopharm Covid-19 vaccine. Duopharma Biotech’s unit is distributing the Sinopharm Covid- 19 vaccine following the arrival of a shipment as the company contributes to the vaccination efforts in Malaysia. (StarBiz)

Market Update

The FBM KLCI might open higher today after Wall Street stocks had their best week in nearly three months last week as strong corporate earnings tempered nerves about inflation. The blue-chip S&P 500 rose 0.8% on Friday for a gain of 2% over the past five days, its best weekly performance since late-July. Industrial and financial groups helped drive the gains. The technology-heavy Nasdaq Composite ended the session 0.5% higher. The gains continued from Thursday’s trading session, which marked Wall Street’s best daily performance for eight months as upbeat earnings tempered fears of inflation. Stock and bond markets have for weeks been dogged by worries about surging energy prices, jammed-up supply chains and companies failing to pass on higher costs to consumers. Better than expected quarterly earnings reports from Wall Street banks and iPhone chipmaker Taiwan Semiconductor Manufacturing Company, however, have lifted the mood. In Europe, the regional Stoxx Europe 600 index closed up 0.7%, delivering a weekly rise of more than 2%. London’s FTSE 100 added 0.4%. Back home, the FBM KLCI added 5.76 points to 1,598.28 from 1,592.52 at Thursday’s close. In the region, Japan’s Nikkei 225 gained 1.8%, Hong Kong’s Hang Seng rose 1.5% and China’s Shanghai Composite Index edged up 0.4%.

Source: PublicInvest Research - 18 Oct 2021