Economy

EU: Private sector growth accelerates in Feb. Eurozone private sector activity growth accelerated notably in Feb as COVID-19 containment measures were relaxed, flash survey results from IHS Markit showed. The composite output index climbed to 55.8 in Feb from 52.3 in Jan. The reading was forecast to improve moderately to 52.7. Growth picked up especially in the service sector, though manufacturers also reported improved production gains because of rising demand and fewer supply bottlenecks. (RTT)

EU: Germany producer price inflation at record high. Germany producer price inflation hit a record high in Jan on energy prices, data from Destatis showed. Producer prices increased 25.0% YoY in Jan, following Dec's 24.2% rise. This was the highest annual increase since the survey began in 1949. Economists had forecast producer prices to climb 24.2% again. Excluding energy, producer prices were 12.0% higher than in the same period last year. Energy prices surged 66.7% annually and the increase in intermediate goods prices was 20.7%. Capital goods moved up 5.3%. Prices of non- durable consumer goods climbed 6.7% and that of durable goods by 6.2%. (RTT)

EU: German private sector growth at 6-month high. Germany's private sector grew at the fastest rate in six months in Feb, amid signs of improving demand even despite a fresh wave of infections linked to the Omicron variant, flash survey data from IHS Markit showed. The flash composite output index rose unexpectedly to 56.2 in Feb, up from Jan's 53.8. The score was forecast to fall to 53.1. The uptick in the index owed exclusively to a faster rise in service sector business activity, the quickest seen since last Aug. Manufacturing also increased, though the rate of growth eased since Jan amid reports from some surveyed firms of output having been constrained by staff absences linked to COVID. (RTT)

UK: Private sector rebounds sharply in Feb. The UK private sector expanded sharply in Feb due to the swift rebound in economic conditions after disruptions caused by the Omicron variant at the turn of the year, flash survey results from IHS Markit showed. The Chartered Institute of Procurement & Supply composite output index rose to an eight-month high of 60.2 in Feb from 54.2 in Jan. (RTT)

UK: London housing market boosted by end of COVID rules, Rightmove says. Asking prices for British homes posted their fastest annual growth in more than seven years this month, helped by a bounce-back in demand in London ahead of a return to the office for many workers, a survey published found. Prices of property coming to market rose by 2.3% from Jan, the biggest monthly jump in cash terms in at least two decades and were 9.5% higher than a year ago, the strongest annual rate of growth since September 2014, property website Rightmove said (Reuters)

China: New home prices perk up as big city demand returns. China's new home prices rose for the first time since Sept on a monthly basis, official data for Jan showed, as efforts to soften the blow from tough regulatory curbs on property supported buyer sentiment, particularly in big cities. Average new home prices in China's 70 major cities climbed 0.1% from a month earlier in Jan, compared with a 0.2% drop in Dec, according to Reuters calculations from data released by the National Bureau of Statistics (NBS). (Reuters)

Japan: Manufacturing sector slows in Feb. The manufacturing sector in Japan continued to expand in Feb, albeit at a slower pace, the latest survey from Markit Economics showed with a manufacturing PMI score of 52.9. That's down from 55.4 in Jan, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Output reduced for the first time in five months while new order growth eased to the softest in the current sequence of expansion. (RTT)

Australia: Manufacturing sector accelerates in Feb - Markit. The manufacturing sector in Australia continued to expand in Feb, and at a faster pace, the latest survey from Markit Economics showed with a manufacturing PMI score of 57.6. That's up from 55.1 in Jan, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Firms reported higher demand coupled with an easing of COVID-19 disruptions enabling output to return to growth. (RTT)

Markets

CTOS: Gets nod for RM206m acquisition. CTOS Digital shareholders have given the greenlight for its RM205.8m acquisition of a 49.0% stake in Juris Technologies. JurisTech is a Malaysian fintech company that specialises in enterprise-class software solutions for banks, financial institutions, insurance and telecommunication companies. CTOS was elated by the vote of confidence from the shareholders as it embarked on the deal to bring a stronger end-to-end digital lending solution proposition to the market. (BTimes)

KPower: Bags RM70m EPCC contract in Sabah. KPower has bagged RM70m engineering, procurement, construction and commissioning (EPCC) contract in Sabah. KPE has received the letter of award (LoA) from One River Power (ORP) to complete the EPCC and commissioning of small hydropower plants in Sg Bengkoka Upper, Sg Bengkoka Lower and Sg Togohu in Sabah. (BTimes)

Karex: Falls into the red in 2Q amid rising material and distribution costs. Karex sank into the red for the 2QFY22, posting a net loss of RM2.81m against a net profit of RM2.79m a year ago, amid rising raw material costs and additional distribution expenses. The condom maker is set to offer new products including medical gloves in the near future, as it seeks to capitalise on new market trends. (The Edge)

CSC Steel: FY21 earnings more than double on better product margin. CSC Steel Holdings’s net profit more than doubled to RM86.09m for FY2021 from RM37.0m in the preceding year, driven by improved product margin due to an uptrend in selling prices. The steel coil maker said revenue also increased to RM1.47bn from RM1.08bn previously, mainly due to a significant rise in steel prices. (The Edge)

PLS Plantations: 2Q profit comes in six times higher on higher FFB prices, sales of durian products. PLS Plantations's net profit leapt to RM7.38m for the 2QFY22, about six times the RM1.28m it made in 2QFY21, on the back of higher revenue and better managed costs. Earnings per share jumped to 1.85sen from 0.35sen. Quarterly revenue more than doubled to RM57.26m from RM27.65m a year ago. (The Edge)

Guan Chong: 4Q profit up about 10% on stronger revenue and improved margins, declares two sen final dividend. Guan Chong, the world's fourth largest cocoa grinder, reported a 9.51% increase in profit for its 4QFY21 to RM51.24m from RM46.79m 4QFY20, due to stronger revenue and improved margins. Revenue rose 6.36% to RM1.09bn from RM1.02bn, driven by an increase in sales volume of cocoa products amid the economic reopening and higher consumption during festive season. (The Edge)

Boustead Plantations: Net profit surges to RM241.29m in FY21. Boustead Plantations’s net profit surged 462% to RM241.29m in FY2021 from RM42.95m previously, boosted by stronger crude palm oil (CPO) prices. Revenue jumped 38% to RM1.05bn, the highest since its listing in 2014 compared to RM763.05m previously. The highest monthly average CPO price of RM5,159 per tonne was recorded in November 2021 with palm kernel’s (PK) average price of RM4,139 per tonne. (StarBiz)

MARKET UPDATE

The FBM KLCI might open lower today as European equities dropped sharply on Monday after Russian president Vladimir Putin convened his top security advisers to discuss recognising two Moscow-backed separatist regions in eastern Ukraine, a step that would greatly escalate the crisis in the country. The regional Stoxx Europe 600 share gauge fell as much as 1.9% in the early afternoon and closed the session 1.3% lower. The meeting of the National Security Council came as Russia claimed on Monday that it had destroyed two Ukrainian military vehicles that strayed into its territory, killing five people. The unconfirmed incident would be the first direct clash with Ukrainian forces since Moscow mobilised 190,000 troops on its border. Dmytro Kuleba, Ukraine’s foreign minister, denied that the country’s troops made an incursion into Russia. The FTSE All World share index has fallen for six of the past eight sessions and has lost 2.2% so far this month. US stock and bonds markets were closed for a public holiday.

Back home, Bursa Malaysia closed broadly lower across the board on Monday due to heavy profit-taking activities following strong rallies for over a week. At closing, the benchmark FBM KLCI was lower by 1.27% or 20.36 points to 1,582.69 from 1,603.05 at Friday's close. The index, which opened 1.39 points lower at 1,601.66, moved between 1,578.61 and 1,603.38 throughout the session. In the region, Japan's Nikkei 225 slipped 0.78% to 26,910.87, Hong Kong’s Hang Seng Index went down 0.65% to 24,170.07 and South Korea’s Kospi fell 0.03% to 2,743.8.

Source: PublicInvest Research - 22 Feb 2022