Economy

Global: World’s central banks set policy for economies shaken by the war . Global central banks this week will offer the biggest collective assessment of a changed world since Russia’s invasion of Ukraine sparked renewed supply disruptions and a sudden inflation shock for many economies. Among the eight members of the Group of 20 whose monetary officials are due to meet, the Fed’s impending interest-rate increase is likely to steal the limelight. The  others will display a kaleidoscope of policy reflecting differing impacts from the conflict in a world economy already adjusting to surging prices. Decisions will range from another potential rate hike at the hawkish BoE, to the BoJ’s likely outcome of insisting on a continued easing stance. (Bloomberg)

US: Consumer sentiment near 11-year low; near-term inflation worries mount . US consumer sentiment fell more than expected in early March as gasoline prices surged to a record high in the aftermath of Russia's war against Ukraine, boosting one-year inflation expectations to the highest level since 1981. The third straight monthly decline reported by the University of Michigan pushed consumer sentiment to its lowest level in nearly 11 years. It said 24% of respondents "spontaneously mentioned the Ukraine invasion in response to questions about the economic outlook". The University of Michigan's preliminary consumer sentiment index dropped to 59.7 in the first half of this month, the lowest reading since Sept 2011, from a final reading of 62.8 in Feb. (Reuters)

UK: Britain’s cost-of-living crisis got worse before it even began . The UK was bracing for its biggest squeeze on living standards in decades even before Russia invaded Ukraine. The impact of the war is now threatening to deepen a crisis for the poorest households and pull millions more into financial trouble. A spike in the price of oil has already pushed petrol and diesel prices to a record. Economists warn that further pressure on food and energy prices could mean inflation hits double digits later this year. With domestic energy prices and taxes already rising next month and commodity markets highly volatile, pressure is growing on Chancellor of the Exchequer Rishi Sunak to ease the pain when he unveils a springtime mini-budget on March 23. Before then, the Bank of England is widely expected to announce a third consecutive interest-rate rise when it meets on Thursday. (Bloomberg)

China: Bank lending declines in Feb . China's bank lending declined more than expected in Feb, data from the PBOC revealed. Banks extended CNY1.23trn new yuan loans in Feb compared to CNY3.98trn loans provided in Jan. This was also below the economists' forecast of CNY1.48trn. Aggregate financing declined to CNY1.19trn, well below the expected level of CNY2.2trn. The slowdown in lending suggests that more easing measures will be needed to meet the policy objectives that were recently laid out at the National People's Congress, Julian Evans-Pritchard, an economist at Capital Economics, said. (RTT)

Japan: Household spending jumps 6.9% on year in Jan . The average of household spending in Japan was up 6.9% on year in Jan, the Ministry of Internal Affairs and Communications said - coming in at 287,801 yen. That beat expectations for an increase of 3.6% following the 0.2% decline in Dec. On a monthly basis, household spending fell 1.2% - again exceeding expectations for a decline of 3.0 % following the 0.1% gain in the previous month. The average of monthly income per household stood at 479,805 yen, up 1.6%on year. (RTT)

South Korea: Current account surplus falls to USD1.81bn . South Korea had a current account surplus of USD1.81bn in Jan, the Bank of Korea said - down from USD6.06bn in Dec. The goods account surplus decreased to USD0.67bn, compared to the USD5.58bn figure in Jan 2021. The services account deficit decreased to USD0.45bn, from USD0.93bn in Jan last year, owing to a large surplus in the transport account. (RTT)

Markets

NCT Alliance: Launches RM570m white knight project. NCT Alliance subsidiary NCT Platinum SB launched Ion Belian Garden, a white knight development project located in Batang Kali, Selangor with a GDV of RM570m. Previously known as the Genting Valley project comprising 665 bungalow plots over five phases, the project was abandoned for almost 17 years by the initial developer. More than 200 victims were given a second chance with this revival. (SunBiz)

Advance Synergy: Proposes renounceable 2-for-1 rights issue to raise at least RM80m. Advance Synergy is proposing to undertake a renounceable rights issue of up to 1.8bn new ordinary shares in the company on the basis of two right shares for every one existing ordinary share held on an entitlement date to be determined later. (The Edge)

Velesto Energy: Receives two-year contract from Petronas Carigali to provide jack-up drilling rigs. Velesto Energy Bhd (VEB) said its unit has received a two-year contract to provide jack-up drilling rigs to Petronas Carigali SB (PCSB). PCSB's contract was awarded to Velesto Drilling SB (VED), which is mainly engaged in offshore drilling and operations and other engineering services for oil and gas exploration, development and production in Malaysia and overseas. (The Edge)

CBIP: Buys remaining 30% in biofuel producer for RM24m. CB Industrial Product Holdings Bhd (CBIP) has acquired the remaining 30% stake or 30m shares in biofuels producer Gulf Lubes Malaysia SB (GLM) for RM24m in cash. Upon completion of the proposed acquisition, GLM will become a wholly-owned subsidiary of CBIP and enable the company to plan and set direction of GLM to align with the interest of CBIP group so as to achieve any potential synergy among the group of companies as well as to resolve the management deadlock in GLM as announced on June 30, 2020. (The Edge)

Serba Dinamik: Four units fail in their bid to be placed under interim judicial management. The High Court (commercial division) had on March 11 dismissed four Serba Dinamik Holdings subsidiaries' applications for all of them to be placed under interim judicial management (IJM) until the determination of a permanent judicial manager (JM) is made. (The Edge)

Fast Energy: Proposes private placement to raise RM4.71m for petroleum trading business. Fast Energy Holdings plans to raise up to RM4.71m through a private placement of up to 78.51m new shares or 10% of its total issued shares, at issue price to be determined later. The proceeds from the proposed private placement will be used mainly to fund the working capital of the petroleum trading business, as the company has already entered into contracts for its petroleum products. (The Edge)

IPO: Farm Fresh Malaysian public portion oversubscribed by 18.74 times. Farm Fresh’s initial public offering (IPO) for the Malaysian public portion was oversubscribed by 18.74 times. It is scheduled to be listed on the Main Market of Bursa Malaysia on March 22. The dairy producer received from the Malaysian public, a total of 45,694 applications for 733.54m shares, with a value of RM990.28m. (The Edge)

Market Update

The FBM KLCI might open lower today after US stocks fell on Friday and registered their worst week in nearly two months as fighting in Ukraine intensified and risk appetite on Wall Street withered. The benchmark S&P 500 slid 1.3% on Friday, with the declines accelerating into the close. The drop took the S&P 500’s losses for the week to 2.9%, its largest decline since late January. The tech-heavy Nasdaq Composite slid 2.2%, taking its fall for the week to 3.5%. Markets have swung violently on developments in Ukraine, as Russia’s invasion of the country reverberates across the globe. Surging commodity prices, which preceded data this week showing US inflation had hit its highest level in 40 years, have unnerved traders and cast many economic forecasts into doubt. The regional Stoxx Europe 600 rose 2.2% for the week, recovering some of last week’s 7% slide.

Back home, Bursa Malaysia closed lower as profit taking persisted on the broader market amidst weak sentiment shrouding most regional peers. At 5pm, the FBM KLCI erased 0.78% or 12.31 points to 1,568.22 from 1,580.53 at Thursday’s close. Earlier, the market bellwether opened 5.39 points weaker at 1,575.14, and fluctuated between 1,560.63 and 1,575.14 throughout the trading session. In the region, Hong Kong’s Hang Seng index shed 1.6% and Japan’s Topix fell 1.7%. Australia’s S&P/ASX 200 dropped 0.9%, while China’s CSI 300 was up 0.3%.

Source: PublicInvest Research - 14 Mar 2022