Economy

Global: IMF cuts growth forecast for Asia, warns of supply chain risks. The IMF slashed this year's economic growth forecast for Asia and warned that a fresh wave of COVID-19 infections, supply chain disruptions and inflation pressures pose downside risks to the outlook. China's economy will grow by 8.0% this year and 5.6% in 2022, but the recovery remains "unbalanced" as repeated coronavirus outbreaks and fiscal tightening weigh on consumption, it said. (Reuters)

US: Housing starts unexpectedly drop 1.6% in Sept . A report released by the Commerce Department showed an unexpected decrease in new U.S. residential construction in the month of Sept. The Commerce Department said housing starts fell by 1.6% to an annual rate of 1.555m in Sept from a revised rate of 1.580m in Aug. Economists had expected housing starts to inch up to a rate of 1.620m from the 1.615m originally reported for the previous month. The report also showed building permits plunged by 7.7% to an annual rate of 1.589m from a revised rate of 1.721m in Aug. (RTT)

US: Industrial production unexpectedly tumbles 1.3% in Sept . Industrial production in the US unexpectedly showed a steep drop in the month of Sept, the Federal Reserve revealed in a report released. The Fed said industrial production tumbled by 1.3% in Sept following a revised 0.1% dip in Aug. The sharp decline surprised economists, who had expected industrial production to edge up by 0.2% compared to the 0.4% increase originally reported for the previous month. The report said manufacturing output fell (RTT)

EU: Eurozone construction output falls in Aug. Eurozone construction output declined in Aug after rising for the first time in four months in July, data from Eurostat showed. Construction output declined 1.3% MoM in Aug, in contrast to a 0.1% rise in July. Building output decreased 1.3% and civil engineering fell 1.9%. On a yearly basis, construction output was down 1.6% after rising 3.5% in July. Construction output in the EU27 fell 1.8% MoM and by 1% from the last year. (RTT)

China: GDP climbs 4.9% on year in 3Q . China's gross domestic product expanded 4.9% on year in the 3Q of 2021, the National Bureau of Statistics said - missing forecasts for 5.2% and down sharply from 7.9% in the three months prior. On a seasonally adjusted quarterly basis, GDP rose just 0.2% - again missing expectations for 0.5% and down from the downwardly revised 1.2% growth in the previous three months (originally 1.3%). The bureau also said that China's industrial production gained 3.1% on year in Sept, missing forecasts for 4.5% and slowing from 5.1% in Aug. Retail sales picked up an annual 4.4%, beating forecasts for 3.3% and up from 2.5% in the previous month. (RTT)

Indonesia: Central bank keeps rates at record lows to support recovery. Indonesia's central bank kept its policy rates steady at record lows, saying the decision was in line with the need to support the economic recovery while keeping the rupiah stable. Bank Indonesia (BI) held the benchmark 7-day reverse repurchase rate steady at 3.50% for the eighth straight month. Indonesia's economy expanded at the fastest pace in 17 years in the 2Q of 2021, but the recovery was clouded by an outbreak in July - one of the worst resurgences of COVID-19 in Asia - that forced authorities to reimpose restrictions. (Reuters)

Australia: RBA sees growth returning after Delta, but no rate rise. Australia's central bank expects the economy to return to growth in the current quarter after an outbreak of the Delta variant of COVID-19 derailed a recovery, but still does not expect to raise interest rates until 2024, board minutes showed. The bounce-back, helped by rising vaccination rates that have allowed New South Wales and Victoria states to start reopening after months-long lockdowns, would be slower than the pick-up a year earlier after the first wave of COVID- 19, minutes of the Reserve Bank of Australia's Oct. 5 policy meeting showed. (Reuters)

Markets

AirAsia X (Underperform, TP:RM0.01): To hold crucial creditors meeting to vote on debt restructuring plan on Nov 12. AirAsia X will hold a meeting with scheme creditors on Nov 12 to vote on its proposed plan to restructure RM63.5bn of debt. The proposed debt restructuring requires the approval of at least 75% of the total debt value that votes in each class of creditors. (The Edge)

Straits Energy Resources: Buys vessel for RM14.6m. Straits Energy Resources said it plans to acquire a vessel for USD3.5m (RM14.55 million) to expand the business of its 67%-owned unit Straits Marine Fuels and Energy SB, especially in the supply of low sulphur fuel oil. The oil trading and fuel bunkering service provider is acquiring Empower, which has a gross tonnage of 4,991 tonnes and death weight tonnage of 7,820 tonnes, from Adamas Marine SB . (The Edge)

Haily: Bags RM24.5m housing construction job in Johor. Haily Group has bagged a contract worth RM24.5m from Meridin East SB for the construction and completion of a terraced residential project in Plentong, Johor Bahru. The project comprises a total of 155 double-storey terrace houses, one single-chamber TNB sub-station, two double-chamber TNB sub-stations and one main switch station. (The Edge)

Southern Cable: Bags RM18.5m cable supply contract from TNB. Southern Cable Group has secured an RM18.5m contract from Tenaga Nasional Bhd (TNB) for the supply of underground cables and conductors. The group said it would supply and deliver the underground cables and conductors for the distribution network division of TNB. (The Edge)

MyEG: Plans private placement to raise as much as RM309m. MyEG has proposed placement of up to 4.17% of its total number of issued shares to third party investors that would be identified later at an issue price to be determined later. (StarBiz)

ACO Group: To acquire 10% stake in EV charging specialist, install fast-charging station in JB. ACO Group is teaming up with electric vehicle (EV) charging specialist EV Connection SB to install a direct current (DC) fast-charging station at ACO Group’s new headquarters in Johor Baru as part of its initiatives to tap into the green technology sector. (The Edge)

Comintel: Unit secures subcontract worth RM96.64m from Binastra. Comintel Corp’s wholly-owned subsidiary Total Package Work SB has accepted a revised letter of award from Binastra Construction (M) SB worth RM96.64m. Comintel said the sub-contract includes the supply of labour and material for concrete, formwork, reinforcement bars and fabric steel reinforcement (BRC) works in respect of the development of Plot 8 in Damansara Perdana, Selangor. (The Edge)

Asia Poly: Ceases to be Karyon's substantial shareholder after disposing of 5.97% stake. Asia Poly Holdings has ceased to be a substantial shareholder of Karyon Industries. Asia Poly said it between May 25 and Oct 15 disposed of 28.42m shares or a 5.97% stake in Karyon in the open market for RM8.24m. (The Edge)

Market Update

The FBM KLCI might open higher today after global stock markets rose on Tuesday and government debt yields increased as traders balanced optimism about corporate earnings with the prospect of central banks lifting interest rates. Wall Street’s S&P 500 index closed 0.7% higher in New York; the technology-focused Nasdaq Composite also ended the day up 0.7%. The Stoxx Europe 600 index closed up 0.3%. The consumer goods bellwether Procter & Gamble warned of rising input costs earlier in the day, but maintained its full-year earnings forecast. Fresh data showed that construction of new homes in the US decreased in September after rising in August. Builders have been caught between strong demand from buyers—spurred in part by low interest rates—and shortages of materials, labour and lots. Meanwhile, most major indices in the region closed higher. China’s Shanghai Composite gained 0.7%, and Hong Kong’s Hang Seng climbed 1.5%. South Korea’s Kospi and Japan’s Nikkei 225 each added about 0.7%

Source: PublicInvest Research - 20 Oct 2021