Economy

EU: Germany producer price inflation strongest since 1951 . Germany's producer prices rose at the fastest pace since 1951, data released by Destatis showed. Producer prices increased 18.4% YoY in Oct, following a 14.2% rise in Sept. Prices were expected to gain 16.2%. This was the highest growth since Nov 1951, when prices surged 20.6%. On a monthly basis, producer prices gained 3.8%, following a 2.3% increase in the previous month. Economists had forecast a rise of 1.9%. Data showed that energy prices advanced 48.2% annually and intermediate goods prices rose 18.1%. Excluding energy prices, producer prices grew 9.2%. (RTT)

EU: Eurozone current account surplus increases in Sept . The euro area current account surplus increased in Sept, data from the European Central Bank showed. The current account surplus rose to EUR19bn from EUR17bn in the previous month. The surpluses on goods and services trade and primary income were partly offset by a deficit in secondary income. The surplus on goods trade fell to EUR16bn from EUR19bn. Meanwhile, trade in services showed a surplus of EUR10bn compared to a shortfall of -EUR1bn in Aug. (RTT)

EU: Italy industrial turnover growth slows in Sept. Italy's industrial turnover grew at a softer pace in Sept, data from the statistical office Istat showed. Industrial turnover grew 0.1% MoM in Sept, after a 0.5% rise in Aug. Domestic turnover remained unchanged in Sept, after a 0.9% gain in Aug. Foreign turnover grew 0.2%, after a 0.3% fall. Turnover of energy grew 5.5% monthly in Sept. Turnover of intermediate goods turnover gained 0.1% and consumer goods turnover increased 1.2%. Meanwhile, capital goods declined 2.2%. On a yearly basis, industrial turnover rose 15.2% in Sept, following a 12.4% increase in the previous month. Domestic turnover increased 17.0% and foreign turnover expanded 11.6% in Sept. (RTT)

China: IMF urges China to tackle financial risks in 'clear and coordinated' fashion . China must address financial risks in a "clear and coordinated fashion" and temporarily shift its fiscal policy to a neutral stance from this year's contractionary approach, IMF said in a statement released. "China's recovery is well advanced, but is unbalanced and momentum is slowing, even as downside risks are accumulating," the IMF said in a statement from staff involved in the recently concluded 2021 Article IV consultation with China. The IMF blamed the slowdown to China's rapid withdrawal of policy support, the hit to consumption from COVID-19 outbreaks, recent power outages and a slowdown in real estate investment. "Fiscal policy, which has been significantly contractionary this year, should temporarily shift to a neutral stance and focus on strengthening social protection and promoting green investment over traditional infrastructure spending," it said. (Reuters)

Japan: Overall inflation rises 0.1% on year in Oct . Overall consumer prices in Japan were up 0.1% on year in Oct, the Ministry of Internal Affairs and Communications said. That was in line with expectations and down from 0.2% in Sept. Core consumer prices, which exclude volatile food prices, also rose an annual 0.1% - unchanged and matching forecasts. Individually, prices were up for food, housing, fuel, furniture, education and recreation; prices were down for clothing, medical care and communications. On a seasonally adjusted monthly basis, overall inflation slipped 0.3% and core CPI dipped 0.1%. (RTT)

Japan: Unleashes record stimulus package, bucking global tapering trend . Japan unveiled a record USD490bn spending package to cushion the economic blow from the Covid-19 pandemic, bucking a global trend towards withdrawing crisis-mode stimulus measures and adding strains to its already tattered finances. Spending has ballooned due to an array of payouts including those criticised for being unrelated to the pandemic, such as cash handouts to households with youths aged 18 or below, and will likely lead to additional bond issuance this year. The massive spending would underscore the resolve of Prime Minister Fumio Kishida — once considered a fiscal conservative — to focus on reflating the economy and redistributing wealth to households. (Reuters)

Thailand: Economy seen growing 3.5%-4.5% next year, recovery fragile — finance minister . Thailand's economy is expected to grow between 3.5% to 4.5% next year thanks to increased exports and a recovery in the country's vital tourism sector from the pandemic-driven slump, its finance minister said. The Southeast Asian country earlier this month reopened to vaccinated foreign visitors without quarantine requirements in a bid to reboot an industry which typically accounts for about 12% of GDP. This year's growth is expected at 1.0% to 1.2% and monetary policy must support fiscal policy in helping the economic recovery which remains very fragile, Finance Minister Arkhom Termpittayapaisith told a business seminar. (Reuters)

Markets

AirAsia (Neutral, TP: RM0.86): To operate VTL flights to Changi Airport from Nov 29. To kickstart the resumption of the Vaccinated Travel Lane (VTL) between Malaysia and Singapore, AirAsia will operate a seven times weekly flight schedule from klia2 and Changi Airport beginning Nov 29, 2021. The budget carrier said more routes from other cities in Malaysia will be added and frequencies increased accordingly as travel demand grows in line with the reopening of more leisure destinations in the near future, subject to approval from the authorities. (The Edge)

SMTrack: Launches its first air freight service in collaboration with Alibaba's Cainiao. SMTrack launched the first air freight service in collaboration with Alibaba Group's logistic arm, Cainiao (Malaysia) SB. The company has taken proactive measures to ensure that the air freight service to Shenzhen could happen soon after the company signed the agreement with Cainiao. The company has purchased an aircraft worth USD6.7m and has converted the passenger plane into a cargo plane at the beginning of this year. (BTimes)

Ikhlas Capital: Not in talks with Country Heights on share placement, source says. Ikhlas Capital Singapore Pte Ltd is not considering taking part in Country Heights Holdings's (CHHB) private share placement that aims to raise close to RM58m, according to a source close to the private equity fund. The fund does not have such investment proposals on its table, said the source. When contacted, Ikhlas Capital's spokesperson declined to comment. (The Edge)

Khee San: Slips into PN17 status after subsidiary placed under judicial management. Khee San is now a Practice Note 17 (PN17) company after its wholly-owned subsidiary was placed under judicial management. Khee San said Maybank Islamic, via its solicitor Messrs Shook Lin & Bok, had filed an application to place its unit Khee San Food Industries SB under the court supervised restructuring. Khee San said the assets of its unit accounted for over half of the total assets employed of the company on a consolidated basis. (The Edge)

Alam Maritim: Gets three months' extension to call for scheme creditors' meeting. The High Court on granted Alam Maritim Resources and its subsidiary Alam Maritim (M) SB an extension of three months from Nov 21 to call for a scheme of creditors meeting, and allowed their request for a restraining order to restrain all legal proceedings against AMSB. The orders granted by the court were obtained as part of Alam Maritim's overall restructuring and rehabilitation plan by way of a proposed scheme of arrangement with its creditors. (The Edge)

Sunway: To form JV with Hoi Hup to acquire residential land in Singapore for RM2.5bn. Sunway said it will form a joint venture (JV) company to buy 22 plots of residential freehold land at Thiam Siew Avenue in Singapore for a total consideration of SGD815m (approximately RM2.51bn). The group, via its Singapore subsidiary Sunway Developments Pte Ltd (SDPL), together with Singapore based property developer Hoi Hup Realty Pte Ltd, had entered into a collective sale and purchase agreement with the owners of the land. (The Edge)

Market Update

The FBM KLCI might open lower today after Government bonds advanced while US stocks fell on Friday as fresh coronavirus curbs in Europe and hawkish comments from US policymakers prompted investors to shift to safe-haven assets. The broad-based S&P 500 equity index closed the day down 0.1% after fluctuating between minor losses and gains, as a rise in technology stocks was tempered by falls for financial services groups and US energy companies. Despite the loss, the index ended the week 0.3% higher. The Nasdaq Composite index, which is stacked with tech and healthcare companies, ended the day up 0.4%, marking its second consecutive record close. Europe’s Stoxx 600 index closed 0.3% lower on Friday, but remained close to its all-time high. Brent crude, the oil benchmark, settled down 2.9% at $78.89 a barrel. Meanwhile, in government debt markets, the yield on the 10-year Treasury note fell 0.04 percentage points to 1.55% as the benchmark debt security rose in price.

Back home, Bursa Malaysia ended the week higher on bargain hunting in selected heavyweights mainly in telecommunications and media counters such as Axiata Group Bhd, Digi.Com Bhd and Maxis Bhd. At 5pm, the benchmark FBM KLCI rose 1.75 points or 0.11% to 1,525.54. Regionally, Japan’s Nikkei was 0.5% better at 29,745.87, the South Korean Kospi rose 0.8% to 2,971.02 while Shanghai’s SSE gained 1.13% to 3,560.37. Hong Kong’s Hang Seng share index closed down 1.07% after the Chinese ecommerce group Alibaba cut its sales forecasts, citing slowing growth in consumer spending in the world’s second-largest economy.

Source: PublicInvest Research - 22 Nov 2021