Economy

US: Consumer confidence slips, migration to the South fuels house price inflation. US consumer confidence fell to a five-month low month in Feb, with fewer consumers planning to purchase homes, automobiles and go on vacation over the next six months amid concerns about the short-term economic outlook. The survey from the Conference Board also showed consumers' inflation expectations rising after moderating for two months. (Reuters)

US: Business activity accelerates in Feb - IHS Markit survey. US business activity regained speed in Feb as the drag from the winter surge in COVID-19 infections diminished, but higher prices for inputs remained a burden amid lingering supply constraints. Data firm IHS Markit said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, rebounded to a reading of 56.0 this month from 51.1 in Jan. (Reuters)

EU: German businesses are more optimistic after Omicron peak. German companies grew more confident in Feb as the country moved past the worst of its latest Covid-19 outbreak. A business-expectations gauge compiled by the Munich-based Ifo Institute rose to 99.2, significantly above economist estimates and the highest reading since July. (Bloomberg)

UK: Industrial orders growth slows price growth sharpest since 1976. The UK manufacturing orders grew at a slower pace in Feb and manufacturers expect prices to rise at the fastest pace since Dec 1976, the latest Industrial Trends survey results from the Confederation of British Industry showed. The order book balance fell unexpectedly to 20% in Feb from 24% in Jan. The expected balance was 25%. (RTT)

UK: Budget logs surplus in Jan. The UK budget logged its first surplus since the start of the pandemic, the Office for National Statistics said. Public sector net borrowing excluding public sector banks showed a surplus of GBP2.9bn in Jan, which was GBP5.4bn, less borrowing than in Jan 2021. Nonetheless, this was still a GBP7.0bn smaller surplus than in Jan 2020, before the coronavirus pandemic. In Jan, current receipts grew 10.4% annually, while the expenditure rose only 2.7%. (RTT)

Hong Kong: Lawmaker calls for a full lockdown to spare business. Hong Kong should impose a strict, city-wide lockdown for nine days to rein in its snowballing Covid-19 outbreak rather than prolong social-distancing restrictions that are strangling business, lawmaker Michael Tien said. Hong Kong should impose a strict, city-wide lockdown for nine days to rein in its snowballing Covid-19 outbreak rather than prolong social-distancing restrictions that are strangling business. (Bloomberg)

Markets

Censof: Acquires 51% stake in GW Intech. Censof Holdings today signed a share subscription agreement with GW Intech SB (GWI) to acquire a 51% stake in the latter. The acquisition will be carried out through the share subscription of 100,000 new GWI shares for RM500,000. Censof group managing director Ameer Shaik Mydin said this acquisition will strengthen Censof's dominant position in the local government front by providing innovative and digital financial management solutions. (Business Times)

Kerjaya Prospek: Secures RM710.1m TOD construction contract . Kerjaya Prospek Group has secured an RM710.1m contract from Nikmat Merpati SB for the construction of the main building and external works of a residential development project. Kerjaya Prospek accepted a letter of award (LoA) for the development of Astrum Ampang, a 2.73ha transit-oriented development (TOD) located near Jalan Jelatek and Jalan Ampang, Selangor. (Business Times)

Berjaya Assets: Sued for RM97m for calling off Sarawak gaming firm buy . Berjaya Assets has been sued by Violet Circle SB for RM97.6m for pulling out of an agreement to acquire the remaining 50% stake in Sarawak gaming firm Megaquest SB. Berjaya Assets and its wholly-owned unit Tropicfair SB were served with an originating summons from Violet Circle on Feb 21. Tropicfair inked a share sale agreement with Violet Circle for the acquisition on July 12, 2016, but called off the deal in mid- 2020. (The Edge)

Yinson: Firms up USD505m Brazilian FPSO job . Yinson Holdings has inked two contracts with Enauta Energia SA for the provision, operation and maintenance of an FPSO asset in Brazil, pursuant to a letter of intent inked in December last year. The FPSO will be deployed in the Atlanta Field in the Santos Basin offshore Brazil for USD505m (about RM2.14bn). (The Edge)

Revenue: Teams up with UnionPay International for Health Declaration Certificate for M'sians travelling to China. Revenue Group is teaming up with China UnionPay’s subsidiary UnionPay International to provide a Health Declaration Certificate (HDC) application for Malaysians travelling to China via its recently launched super app – the wanna App. The cashless payment solution provider said the HDC is a health code that specifies an individual’s health and Covid-19 vaccination status. (The Edge)

Velesto: Secures one-year ExxonMobil contract for provision of hydraulic workover unit . Velesto Energy said its unit Velesto Workover SB (VWO) has been awarded a contract by ExxonMobil Exploration and Production Malaysia Inc (EMEPMI) for the provision of one hydraulic workover unit and services to EMEPMI. The contract is for a period of one year, commencing in the third quarter of 2022, until the completion of EMEPMI's selected wells programme. “The value of this enabling contract with no guarantee of call-offs shall be based upon the agreed rates and work order, if any, issued by EMEPMI within the contract term,” said the oil rig operator in a bourse filing. (The Edge)

Market Update

The FBM KLCI might open lower today as US stocks fell, with the S&P 500 index dropping into a correction, while oil prices neared USD100 a barrel on Tuesday after Russian President Vladimir Putin ordered troops into eastern Ukraine. The international crude oil benchmark Brent rose as high as $99.50 a barrel, the highest price since 2014, as traders weighed the possibility of disrupted supply from Russia. It later trimmed its gains to settle at $96.84 a barrel, up 3.5 per cent from the previous day. The moves came after Putin directed his military to enter Ukraine’s rebel-held Donetsk and Luhansk regions, prompting Germany to halt the approval of the Nord Stream 2 natural gas pipeline and western powers to announce new sanctions against Moscow. Wall Street’s benchmark S&P 500 ended the day down 1% to its lowest closing level since late 2021, led lower by energy and consumer discretionary stocks. The decline on Tuesday brought the index into a correction, or 10% below its recent peak in January. The technology-heavy Nasdaq Composite fell 1.2%. The Stoxx Europe 600 share gauge slipped as much as 1.9%, before recovering to close 0.1% higher.

Back home, Bursa Malaysia ended in the red on Tuesday, succumbing to profit-taking activities across the board following the overbought situation in the previous week. At closing, the benchmark FBM KLCI was lower by 0.36% or 5.73 points to 1,576.96 from Monday's close of 1,582.69. In the region, Hong Kong’s Hang Seng index fell 2.7% and Tokyo’s Nikkei 225 share index closed 1.7% lower.

Source: PublicInvest Research - 23 Feb 2022