Economy

US: Consumer sentiment drops more than initially estimated in March. Consumer sentiment in the US fell by more than initially estimated in the month of March. The report showed the consumer sentiment index for March was downwardly revised to 59.4 from the preliminary reading of 59.7. With the unexpected downward revision, the consumer sentiment was at its lowest level since hitting 55.8 in Aug of 2011. Inflation has been the primary cause of rising pessimism," said Surveys of Consumers chief economist Richard Curtin. "Inflation was mentioned throughout the survey, whether the questions referred to personal finances, prospects for the economy, or assessments of buying conditions. (RTT)

US: Pending home sales approach two-year low; consumer sentiment slumps. Contracts to buy US previously owned homes dropped to the lowest level in nearly two years in Feb, weighed down by a persistent shortage of properties, and activity could remain sluggish amid increasing mortgage rates and high house prices. The National Association of Realtors (NAR) said its Pending Home Sales Index, based on signed contracts, fell 4.1% last month to 104.9, the lowest level since May 2020. It was the fourth straight monthly decline in the index, which leads sales by a month or two. (Reuters)

EU: M3 growth slows; loans to private sector rise at faster pace. Eurozone money supply grew at a slightly slower pace in Feb and loans to the private sector logged a faster expansion. The broad monetary aggregate M3 grew 6.3% in Feb, in line with expectations, after rising 6.4% in Jan. In the three months up to Feb, M3 growth averaged 6.6%. As regards the dynamics of credit, the annual growth rate of total credit to euro area residents held steady at 6.2% in Feb. Credit to general government rose 10.7%. Data showed that credit to the private sector was up 4.3%, the same rate as in Jan. At the same time, the adjusted loans to the private sector grew 4.8%, faster than the 4.6% rise in Jan.(RTT)

EU: Italy consumer confidence lowest in a year. Italy's consumer confidence weakened in March to its lowest in over a year, mainly due to deterioration in economic and future climate in the backdrop of the war in Ukraine. The consumer confidence index fell to 100.8 in March from 112.4 in Feb. The reading was the lowest since Jan last year, when it was 100.7. The economic sentiment index declined sharply to 98.2 in March, the weakest reading since April last year, from 129.4 in the prior month. The current climate index fell to 105.7 from 109.6. (RTT)

EU: Spain GDP rises more than estimated in 4Q. Spain's economy grew more than previously estimated in the 4Q. Another report from the statistical office showed that producer price inflation accelerated the most since 1976 on energy prices in Feb. GDP grew 2.2% sequentially in the 4Q, instead of 2.0% estimated initially. However, this was still slower than the 2.6% growth posted in the 3Q. On a yearly basis, GDP growth improved to 5.5% from 3.5% in the previous quarter. The annual growth was revised up from 5.2%. The expenditure-side breakdown showed that household spending growth improved to 1.5% from 0.6%, while government spending dropped 1.6% sequentially, reversing a 0.6% rise in the 3Q. (RTT)

UK: Car production suffers weakest Feb since 2009. British car production last month was 41% lower than a year earlier, reflecting ongoing disruption from chip shortages and Honda's closure of a car plant in July. Some 61,657 cars were made in Britain in Feb, the lowest number for the time of year since Feb 2009 and down from 105,008 a 12 months earlier. British car production in 2021 sank to the lowest since 1956, due to the growing impact of semiconductor shortages, and is half its level of five years ago. The sector entered 2022 hopeful for recovery, but that recovery has not yet begun, and urgent action is now needed to help mitigate spiralling energy costs and ensure the sector remains globally competitive. (Reuters)

UK: Retail sales log unexpected fall in Feb. UK retail sales dropped unexpectedly in Feb as people returned to work with the easing of restrictions and the online shopping declined. The retail sales volume dropped 0.3% MoM, in contrast to the 1.9% increase in Jan. Sales were forecast to climb 0.6%. Likewise, excluding auto fuel, retail sales volume decreased 0.7%, reversing the 1.7% increase a month ago. Food store sales fell 0.2% on month with large falls in alcohol and tobacco stores, which may be linked to higher spending in pubs and restaurants. (RTT)

UK: Consumer confidence weakens sharply in March. UK consumer confidence weakened for the fourth straight month in March as the cost of living crisis deepened. The consumer confidence index fell to -31 in March from -26 in Feb. All five components of the index decreased from Feb. The index measuring changes in personal finances over the last twelve months dropped two points to -13 and the forecast for personal finances decreased four points to -18. (RTT)

Singapore: Industrial production grows robustly in Feb. Singapore's industrial production grew at the strongest pace in eight months in Feb, led by the electronics segment. Industrial output grew 17.6% YoY in Feb, following a 2.4% rise in Jan. Excluding biomedical manufacturing, industrial production rose 16.8% yearly in Feb, following a 4.9% increase in the preceding month. On a monthly basis, industrial production gained 16.6% in Feb, rebounding from a 10.4% slump in the previous month. Electronics manufacturing increased 32.4% YoY in Feb. (RTT)

Markets

Hibiscus Petroleum (Outperform, TP: RM1.31): Associate announces significant oil discovery in well next to its license offshore Western Australia. 3D Oil Ltd, an 11.68% associate of Hibiscus Petroleum, has announced a significant light oil discovery at an exploration well adjacent to its license in the Bedout sub-basin offshore Western Australia. Carnarvon Energy and its operating partner Santos had announced the discovery at the Pavo 1 exploration well, which is adjacent to its WA-527-P license, on March 23. (The Edge)

Berjaya Corp: Partners with Sabah govt to modernise waste management facilities in Sabah. Berjaya Corp’s subsidiary Berjaya Enviro Holdings SB (BEnviro) is teaming up with Qhazanah Sabah (QSB), the Sabah state government’s strategic investment arm, to develop and modernise waste management facilities in Sabah. On March 25, BEnviro signed a Memorandum of Understanding with QSB to cooperate on the development and operation of integrated waste management projects utilising modern and advanced technologies. (The Edge)

Berjaya Land: Inks MoU with Sabapak Eco for sustainable tourism development project in Sabah . Berjaya Land has inked a memorandum of understanding with Sabapak Eco SB (SESB) for the collaboration of a sustainable tourism destination development project in Sabah. The two parties will jointly formulate a comprehensive sustainable plan to develop and transform part of Gaya, Sapi, and Bohey Dulang Islands into a prime destination for eco-tourism. (BTimes)

Bintai Kinden: Forms JV for O&G materials, equipment supply biz. Bintai Kinden Corp has formed a 51:49 joint venture with Petro Flanges & Fittings SB (PFF) to supply materials and equipment to the local and international oil and gas (O&G) industry, including the Middle East, via the distributorship channel of PFF. The two companies are setting up the JV, Bintai Energy SB, to capitalise on the expected O&G industry recovery. (The Edge)

AME Elite: Gets green light from SC for industrial REIT listing. AME Elite Consortium has obtained the approval from the Securities Commission Malaysia for the proposed establishment and listing of an industrial real estate investment trust (REIT), AME REIT, on the Bursa Malaysia Main Market. AME REIT, an Islamic REIT on the Main Market, will have an initial fund size of 520m. (The Edge)

Titijaya: Collaborates with DHL to develop semiconductor logistic facility. Titijaya Land's wholly-owned subsidiary, City Meridian Development SB and DHL Properties (M) SB will develop an ultra-modern logistics commercial complex, primarily to provide a semiconductor logistics solution for the electrical and electronics sector. (BTimes)

Pekat Group: Finishes Proton job ahead of time. Pekat Group has completed a RM33.1m, 12 megawatt-peak (MWp) grid connected solar photovoltaic (PV) system at Proton Holdings’s plant in Tanjung Malim, Perak. The project was undertaken by its wholly owned subsidiary – Pekat Solar SB and MFP Solar SB in a record time of 24 weeks, which was six months ahead of schedule. (StarBiz)

Market Update

The FBM KLCI might open flat today after major indices traded lower for much of the session before climbing late in the day and finishing mixed. The S&P 500 added 22.9 points, or 0.5%, to 4543.06, while the Dow industrials rose 153.3 points, or 0.4%, to 34861.24. The Nasdaq dropped 22.54 points, or 0.2%, to 14169.3. Despite the Nasdaq’s dip on Friday, both it and the S&P recorded their second consecutive week of gains, up 2% and 1.8% respectively. Meanwhile, US government debt sold off on Friday as hawkish comments from Federal Reserve officials this week prompted big Wall Street banks to forecast a faster pace of interest rate increases. The yield on the 10-year US Treasury note rose on Friday as much as 0.14 percentage points to 2.5%, the highest level since May 2019, as the benchmark debt security fell in price. The Treasury market, which underpins the costs of corporate debt and consumer borrowing worldwide, is enduring its worst month since the election of Donald Trump in 2016. Across the Atlantic, the pan-continental Stoxx Europe 600 advanced 0.1%. Russian stocks fell 3.7% a day after the Moscow stock exchange partially reopened after a month-long closure, reversing some of Wednesday’s 4.4% jump. Gazprom slid 12% and Russia’s largest lender Sberbank declined 3.5%.

Back home, Bursa Malaysia closed broadly higher for a third consecutive day, successfully staying above the key 1,600 level after several attempts previously, as Malaysia's reopening of international borders from April 1, 2022 boosted buying interest in real estate investment trusts, tourism-related counters and consumer products. At 5pm, the benchmark FBM KLCI rose by 4.33 points to 1,603.3 from 1,598.97 at Thursday’s close. In the region, major benchmarks were mixed. Chinese stocks came under pressure as a US watchdog said delisting US-listed Chinese stocks was still on the table. The Shanghai Composite Index slipped 1.2%, and Hong Kong’s Hang Seng Index fell 2.5%. Japan’s Nikkei 225 edged up 0.1%.

Source: PublicInvest Research - 28 Mar 2022