Economy

US: Job growth surge underscores economy's strength as headwinds rise. US job growth accelerated in Feb, pushing the unemployment rate to a two-year low of 3.8% and raising optimism  that the economy could withstand mounting headwinds from geopolitical tensions, inflation and tighter monetary policy. The Labor Department's closely watched employment report also showed the economy created 92,000 more jobs than initially estimated in Dec and Jan. It suggested that the labour market was moving past the COVID-19 pandemic and that the economy has weaned itself off government money. (Reuters)

EU: Euro zone government bond yields fall on worsening Ukrainian conflict. Euro zone government bond yields fell on Friday as concern about a deepening Ukrainian conflict dampened risk appetite, with markets again scaling back their bets on 2022 rate hikes from the ECB. A huge blaze at the site of Europe’s biggest nuclear power station was extinguished, and officials said the plant in Ukraine was operating normally after it was seized by Russian forces in fighting that caused global alarm. (Reuters)

EU: Eurozone retail sales rebound less than expected. Eurozone's retail sales grew less than expected in Jan after a slump in the previous month, preliminary data from the statistical office Eurostat showed. Retail sales rose 0.2% MoM following a 2.7% slump in Dec, revised from 3%. Economists had forecast 1.5% growth. Non-food sales grew 0.2%, while sales of food, drinks and tobacco remained unchanged. (RTT)

EU: Germany construction sector growth remain strong. Germany's construction sector activity increased in Feb, survey results from IHS Markit showed. The construction Purchasing Managers' Index rose to 54.9 in Feb from 54.4 in Jan. This was the strongest growth in two years. A score above 50.0 indicates expansion in the sector. (RTT)

UK: Construction output grows most in 8 months. UK construction grew at the fastest pace in eight months in Feb, led by stronger housing activity, defying expectations for a slowing, survey data from IHS Markit showed. The CIPS/Markit purchasing managers' index, or PMI, for the construction sector rose to 59.1 in Feb from 56.3 in Jan. Economists had forecast a lower score of 54.3. A reading above 50 suggests growth in the sector. The reading has now remained above the threshold for 13 months. (RTT)

China: Plans 7.1% defence spending rise this year, outpacing GDP target. China will spend 7.1% more on defence this year, outpacing last year's hike and the government's modest economic growth forecast as Premier Li Keqiang seeks to safeguard the country's sovereignty, security and development interests. Li pledged to enhance military training and combat readiness for the People's Liberation Army, which is developing an array of weapons from stealth fighters to aircraft carriers. (Reuters)

Hong Kong: Retail sales growth slows in Jan. Hong Kong's retail sales rose at a softer pace in Jan, figures from the Census and Statistics Department showed. The retail sales volume rose 1.7% YoY in Jan, after a 4.3% growth in Dec. The value of retail sales increased 4.1% annually in Jan, after a 6.1% rise in the preceding month. (RTT)

India: Service sector growth improves in Feb. India's service sector growth increased in Feb, survey results from IHS Markit showed. The services Purchasing Managers' Index rose to 51.8 in Feb from 51.5 in Jan. Any score above 50.0 indicates expansion in the sector. (RTT)

Markets

Uzma (Outperform, TP: RM0.62): Gets arbitration notice over USD1.09m for KNAG project. Uzma had received an arbitration notice over a disputed amount of USD1.09m pursuant to the Kinabalu Non-Associated Gas (KNAG) development project. The contract involved the provision of manpower, material, consumables, machinery, including marine spreads for the completion of carry over work (offshore) complete with novation of project materials for KNPG-B Phase II KNAG development project. (The Edge)

Hong Seng: Scraps proposed acquisition of 51% stake in health technologies provider Pow Pocket. Healthcare industry supply chain management specialist Hong Seng Consolidated has scrapped its plan to acquire a 51% stake in health technologies provider Pow Pocket. Hong Seng and Pow Pocket's major shareholder Russell Walter Boyd inked a letter of termination, whereby the parties mutually agreed to terminate their prior heads of agreement (HoA). (The Edge)

YNH: Issues RM323m worth of Islamic bonds, under RM700m IMTN programme. Property developer YNH Property has made its issuance of sukuk wakalah amounting to an aggregate RM323m in nominal value. YNH successfully issued the RM323m sukuk wakalah under its Islamic Medium-Term Notes (IMTN) programme (sukuk wakalah programme) of up to RM700m in nominal value. The issuance comprised IMTNs with a nominal value of RM153m (Series 1) and RM170m (Series 2) with tenures of three and five years, respectively, carrying maturity dates of 28 Feb 2025, and 26 Feb 2027. (The Edge)

Top Builders: Served default judgment for non-payment of outstanding rental amounts for towing vessels. Top Builders Capital — formerly known as Ikhmas Jaya Group — has been served with a default judgment for failing to settle the outstanding amount for the rental of tugships and cranes as well as barge delivery services. The judgment was served by Lim Kean Siew & Co, solicitors for plaintiff Singa Marine. (The Edge)

OpenSys: Automated-teller machine maker OpenSys seeks listing transfer to Main Market. OpenSys (M) has proposed to transfer the listing of the automated-teller machine and cheque deposit machine maker to Bursa Malaysia's Main Market, from the ACE Market, in a move which signifies the growth, profitability and financial strength of the group. (The Edge)

KKB Engineering: Bags a combined RM23.7m contract from MMHE, KWB. KKB Engineering has secured a combined contract of RM23.7m from Malaysia Marine and Heavy Engineering (MMHE) and Kuching Water Board (KWB). The contract from MMHE is to provide equipment and services for the SK408W block in the Jerun oilfield located offshore Sarawak. (BTimes)

Paramount: Plans RM1.3bn property launches in FY22. Paramount Corp plans to launch RM1.3bn worth of properties in FY22, a 48% increase from last year. The group is banking on the economic recovery as Malaysia enters the endemic stage. Paramount also targeted higher property sales of RM1bn in FY22. The property prices range from over RM300,000 to the high-end. (StarBiz)

Market Update

The FBM KLCI might open lower today after US stocks dropped and government bond prices rose on Friday, as investors sought out havens amid the escalating war between Russia and Ukraine. On Wall Street, the S&P 500 share index slipped 0.8% and the technology-focused Nasdaq Composite fell 1.7% in choppy trading. Instead, investors sought out the safety of US government bonds, gold and the dollar. The yield on the 10-year US Treasury note, which underpins borrowing costs worldwide, fell 0.1 percentage points to 1.74%. Equity market declines were even sharper in Europe, with the regional Stoxx 600 share index closing 3.6% lower. Germany’s Xetra Dax fell 4.4% and London’s FTSE 100 declined 3.5%. The moves came after Russian forces seized a Ukrainian nuclear plant. The assault on the Zaporizhzhia facility prompted Joe Biden, US President, to urge an immediate ceasefire on the site of Europe’s largest nuclear facility in south-eastern Ukraine. A fire was extinguished at the site early on Friday.

Back home, Bursa Malaysia ended lower on Friday due to profit taking activities across the board amid the weaker regional market sentiment on reports that Russia has seized a Ukrainian nuclear power plant, the largest in Europe. At 5pm, the FBM KLCI fell 14.6 points to 1,603.94, from 1,618.54 at Thursday's close. In the region, Hong Kong’s Hang Seng share index closed 2.5% lower and Tokyo’s Nikkei 225 lost 2.2%.

Source: PublicInvest Research - 7 Mar 2022