Economy

US: Labor productivity growth unrevised at 6.6% in 4Q. A report showed the spike in US labor productivity in 4Q of 2021 was unrevised from the initial estimate. Labor productivity surged by 6.6% in 4Q after tumbling by 3.9% in 3Q. Meanwhile, the report showed the increase in unit labor costs during the quarter was upwardly revised to 0.9% from the previously reported 0.3%. (RTT)

US: Weekly jobless claims dip more than expected. A report showing a modest decrease in first-time claims for US unemployment benefits in the week ended 26th Feb. The report showed initial jobless claims dipped to 215,000, a decrease of 18,000 from the previous week's revised level of 233,000. (RTT)

EU: Unemployment rate declines in Jan. The euro area unemployment rate declined in Jan. The jobless rate dropped to 6.8% in Jan from 7.0% in Dec. In the same period last year, the unemployment rate was 8.3%. The number of people out of work decreased by 214,000 from the last month to 11.225m. Compared to last year, unemployment was down 2.117m. (RTT)

EU: Italy jobless rate at 20-month low. Italy's unemployment rate declined to a 20-month low in Jan. The jobless rate fell to 8.8% in Jan from 9.0% in Dec. This was the lowest since May 2020, when it stood at 8.7%. At the same time, the employment rate held steady at 59.2% in Jan. Compared to last year, employment increased by 729,000. (RTT)

UK: Service sector growth at 8-month high. The UK service sector growth accelerated sharply in Feb as the Omicron wave of the COVID-19 pandemic subsided. The Chartered Institute of Procurement & Supply final services Purchasing Managers' Index rose sharply to 60.5 in Feb from 54.1 in Jan. The index signaled the fastest growth since last June but the score was below the flash 60.8. (RTT)

China: Service sector growth at 6-month low. China's service sector grew at the slowest pace in six months in Feb due to a renewed fall in overall new business amid ongoing pandemic and measures to control the virus. The Caixin services Purchasing Managers' Index fell to 50.2 in Feb from 51.4 in Jan. The score signaled only a marginal growth in services activity. (RTT)

Japan: Service sector activity contracts at fastest pace in 21 months. Japan's services sector activity shrank in Feb at the quickest pace in nearly two years, as business took a hit from struggling consumer sentiment after a record spike in infections of the Omicron coronavirus variant. (Reuters)

South Korea: GDP jumps 1.2% in 3Q; +4.0% in 2021. South Korea's GDP expanded by a seasonally adjusted 1.2% on quarter in 4Q of 2021 - accelerating from the 0.3% gain in the three months prior. On a yearly basis, GDP was up 4.2% - up from 4.0% in 3Q. On the production side, manufacturing rose by 1.1% on quarter, mainly due to increases in computer, electronic & optical products and electrical equipment. (RTT)

Singapore: Private sector ebbs in Feb. Private sector business in Singapore continued to expand in Feb, albeit at a slower rate with a PMI score of 52.5. That's down from 54.4 in Jan, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. The rate of expansion eased to a three month low but remained above the series average. Higher demand supported output growth in Feb. (RTT)

Markets

MUI: Proposes capital reduction to erase RM3.1bn losses from balance sheet . Malayan United Industries Bhd (MUI) has proposed to undertake a RM3.07bn capital reduction exercise to offset RM3.06bn in accumulated losses as at Dec 31, 2021. The proposed exercise entails a reduction of the issued share capital of MUI via the cancellation of the company's paid-up capital of RM3.07bn. The credit arising from the cancellation will be used to offset the accumulated losses. Less the estimated expenses for the exercise of RM165,000, the remaining RM8.65m will be credited to the retained earnings of the company. (The Edge)

PPB: Margins affected by rising raw materials costs, supply disruptions . PPB Group’s expectation for an improved performance in 2022 could be tempered by the rising cost of raw materials as the Russia-Ukraine conflict continues to jolt supply chains and push commodity prices higher. According to PPB managing director Lim Soon Huat, the rising cost of raw materials will affect margins, particularly for its grains and agribusiness segment – which is the largest contributor to group revenue. (StarBiz)

Coastal Contracts: Secures vessel sales worth RM109.7m . Coastal Contracts via its wholly-owned subsidiaries, is selling one offshore support vessel and two other vessels for an aggregate value of RM109.7m. In a Bursa Malaysia filing, the integrated marine oil and gas service provider said the transactions are expected to contribute positively to the earnings of the group for the financial year ending June 30, 2022. (The Edge)

G Capital: Unit bags to solar projects from KSK Group . G Capital Bhd's 70% owned subsidiary, Solarcity Malaysia SB (SMSB), has bagged two solar photovoltaic (PV) system projects from KSK Group in Kuala Lumpur and Selangor. G Capital said SMSB has received letters of award (LoA) from KSK KD Property SB and KCJ Properties SB to design, construct, install, own, operate and maintain solar PV systems with a capacity of 181 kilowatt peak (kWp) and 90 kWp, respectively. (BTimes)

China Automobile Parts: Gets another Bursa reprieve from delisting . China Automobile Parts Holdings Ltd (CAP) has received yet another reprieve by Bursa Securities from being delisted on the Main Market of Bursa Malaysia, after it managed to issue its annual report for the financial year ended June 30, 2021 (FY21) for public release. As a result, trading in the company's shares will resume on March 4. (The Edge)

Tropicana: To build RM2.5m R&R centre in Langkawi . Tropicana Corp and the Langkawi Municipal Council Tourism City hosted a groundbreaking ceremony for a new rest and recreation (R&R) centre in Pantai Kok, Langkawi on March 2. The RM2.5m R&R centre project will sit on a 0.49-acre parcel land donated by Tropicana to the Langkawi authorities. The project is slated for completion by 3Q22. It will feature commercial lots, washroom, surau and more than 70 parking bays for cars, motorcycles and bicycles. (The Edge)

Market Update

The FBM KLCI might open weaker today as US stock markets ended the day lower after a bumpy ride on Thursday as traders considered the effects of the escalating conflict in Ukraine on central bank policy. Wall Street indices and stock markets across Europe fell after Russia subjected the Ukrainian port of Mariupol and the cities of Chernihiv and Kharkiv to relentless missile bombardment. Investors abandoned riskier assets, pulling money from US stocks, in particular those in the tech sector. Wall Street’s tech-heavy Nasdaq Composite index fell 1.6%, while the blue-chip S&P 500 index fell 0.5%. In Europe, the regional Stoxx 600 index closed down 2%, with heavy falls across companies most affected by anticipated higher costs of oil, metals and foodstuffs produced in Russia and Ukraine. In Europe, the Stoxx sub-index of utilities groups dropped 3.5% while its tech subsector fell 2.2% to reflect concerns about potential disruption to semiconductor supply chains that involve Ukrainian raw materials. Germany’s Xetra Dax dropped 2.2% and London’s FTSE 100 fell 2.6%. Meanwhile, France’s Cac 40 lost 1.8%. 

Back home, Bursa Malaysia’s benchmark index ended 1.27% firmer on Thursday as investors’ optimism was uplifted by Bank Negara Malaysia’s (BNM) move to maintain the overnight policy rate (OPR). At 5pm, the FBM KLCI strengthened. Major stock indices in Asia also largely gained. South Korea’s Kospi jumped 1.6%, and Japan’s Nikkei 225 rose 0.7%. China’s Shanghai Composite fell 0.1%.

Source: PublicInvest Research - 4 Mar 2022