Economy

US: GDP jumps slightly less than previously estimated in 4Q. A report released by the Commerce Department showed the US economy grew by slightly less than previously estimated in the 4Q of 2021. The Commerce Department said real GDP increased by 6.9% in the 4Q, reflecting a modest downward revision from the previously estimated 7.0% spike. The slightly slower than previously estimated GDP growth primarily reflected downward revisions to consumer spending and exports that were partly offset by an upward revision to private inventory investment. (RTT)

US: Mortgage rates jump by the most in 11 years. The interest rate on the most popular US home loan jumped last week by the most in 11 years as bond market investors rapidly repositioned for the Federal Reserve to take more aggressive action to contain inflation, a survey showed. The Mortgage Bankers Association (MBA) said the contract rate on a 30-year fixed-rate mortgage shot to 4.8% in the week ended March 25 from 4.5% a week earlier. That was the largest one-week increase since Feb 2011, and it brought mortgage rates to their highest level since Dec 2018. Mortgage rates have now climbed by nearly 1.5 percentage points since the start of the year, the most rapid run-up in home borrowing costs since 1994. (Reuters)

US: Private payrolls increase solidly in March. U.S. private employers maintained a strong pace of hiring in March, in a boost to the labor market. Private payrolls increased by 455,000 jobs last month, the ADP National Employment Report showed. Data for Feb was revised higher to show 486,000 jobs added instead of the initially reported 475,000. Demand for workers is being boosted by the rolling back of COVID-19 restrictions across the country amid a massive decline in coronavirus cases. There is no sign that Russia’s more than one-month long war against Ukraine has hurt the labor market. First-time applications for unemployment benefits are at 52-1/2-year lows, while the number of Americans on jobless rolls is the smallest since 1970. (Reuters)

EU: Economic confidence weakens in March. Eurozone economic confidence weakened more-than-expected in March mainly due to plummeting consumer confidence, monthly survey results from the European Commission showed. The economic sentiment index fell to 108.5 in March from 113.9 a month ago. The reading was seen at 109.0. The decline in the ESI in March was mostly due to plummeting consumer confidence, accompanied by marked losses in retail trade and industry confidence. The consumer confidence declined sharply to -18.7, in line with the flash estimate, from -8.8 in Feb. (RTT)

EU: German inflation rises more than expected in March. German annual inflation rose more than expected in March as prices of natural gas and mineral oil products soared after Russia’s invasion of Ukraine. Consumer prices, harmonised to make them comparable with inflation data from other European Union countries (HICP), rose 7.6% on the year after 5.5% in Feb, the Federal Statistics Office said. The national consumer price index (CPI) rose 7.3% YoY after an inflation rate of 5.1% in Feb. A similarly high inflation rate in Germany was last recorded in autumn 1981, when mineral oil prices had jumped as a consequence of the first Gulf war, the statistics office said. (Reuters)

EU: Italy industrial turnover recovers; PPI inflation remains high. Italy's industrial turnover recovered in Jan and producer price inflation remained at an elevated level in Feb, data from the statistical office Istat showed. Industrial turnover grew 2.3% on month, in contrast to the 2.0% fall in Dec. Turnover in both domestic and foreign markets rebounded in Jan. Domestic market turnover grew 2.7% after falling 2.9%. Likewise, foreign market turnover rose 1.3%, reversing a 0.2% decrease in Dec. After adjusting for calendar effects, turnover in trend terms moved up 16.9% annually, faster than the 14.5% rise in Dec. In a separate communiqué, the statistical office said producer prices logged a double-digit growth of 32.8% on a yearly basis in Feb, after posting 32.9% rise in Jan. (RTT)

EU: Spain inflation strongest since 1985. Spain consumer price inflation accelerated further in March to the highest since May 1985, flash data from the statistical office INE showed. Consumer price inflation rose more-than-expected to 9.8% in March from 7.6% in Feb. The rate was forecast to climb to 8.0%. The annual growth in prices was driven by electricity, fuel and oil prices and food and non-alcoholic beverages. Underlying inflation advanced to 3.4%, the highest since Sept 2008, from 3.0% in Feb. On a monthly basis, consumer prices advanced 3.0%, following a 0.8% rise in Feb. The rate was also above the economists' forecast of 1.3%. (RTT)

UK: BRC shop price inflation fastest since 2011. UK shop prices increased at the fastest pace in more than a decade in March, data released by the British Retail Consortium. The shop price index advanced 2.1% on a yearly basis in March, following a 1.8% rise in Feb. This was the fastest increase since Sept 2011. Non-food prices were up 1.5%. There have been mounting cost pressures throughout the supply chain for some time, including rising wages, input costs, global commodity prices, energy, and transport, Helen Dickinson, chief executive at BRC, said. Many of these costs are beginning to be exacerbated by the situation in Ukraine, but the full impact on prices is yet to be seen, said Dickinson. (RTT)

Japan: Retail sales sink 0.8% in Feb. The total value of retail sales in Japan was down 0.8% on year in Feb, the Ministry of Economy, Trade and Industry said - coming in at JPY11.537trn. That missed expectations for a loss of 0.3% following the downwardly revised 1.1% increase in Jan (originally 1.6%). On a monthly basis, retail sales were again down 0.8% after slipping 0.9% in the previous month. Commercial sales were down 0.2% on month and up 6.2% on year to JPY44.732trn, while wholesale sales dropped 1.5% on month and gained 8.8% on year to JPY33.196trn. (RTT)

Thailand: Central bank maintains key rate. Thailand's central bank left its key interest rate unchanged, as widely expected, to facilitate a sustained economic recovery. At the Monetary Policy Committee meeting of the BOT, policymakers unanimously voted to hold the key rate at 0.50%. The bank had last reduced the rate by 25 basis points in May 2020. The committee viewed that the domestic recovery will remain intact this year and next, despite impacts from sanctions against Russia which led to higher energy and commodity prices and a slowdown in external demand. The economic growth is seen at 3.2% in 2022 and 4.4% in 2023 on the back of improving domestic demand and tourism. The bank cited prolonged shortages of raw materials and the impact of higher prices on living costs as major downside risks to growth. (RTT)

Markets

Damansara Holdings: Bags contracts worth RM28.3m to operate, maintain facilities in PIC. Damansara Holdings has secured contracts worth a total of RM28.34m to operate and maintain certain facilities at the Pengerang Integrated Complex in Johor. The contracts are effective for 19 months, starting March 31, to end on Sept 30, 2023. The scope of work comprises the operation and maintenance of buildings, external works, and utilities network as well as the provision of accommodation services. (The Edge)

Pharmaniaga: Signs MoU to distribute products in UAE. Pharmaniaga has proposed to distribute its products in the United Arab Emirates (UAE) via a health service provider there. It has entered into a memorandum of understanding (MoU) with Prime Medical Store LLC to grant the UAE firm the exclusive right to register, import, sell and distribute its products in the gulf nation. (The Edge)

Konsortium Transnasional: Bags second contract from Probil worth RM140m. Konsortium Transnasional (KTB) has secured a second construction contract from Probil Industries (M) SB, worth RM139.88m. It has received an additional Letter of Award from Probil for the supply of all plant, materials, tools, equipment, temporary works, labour and supervision necessary for the construction and completion of the job. (The Edge)

T7 Global: Lands manpower services contract from Petronas. T7 Global has secured a contract from Petroliam Nasional (Petronas) for the provision of third-party professional and support services. Its manpower subsidiary, It received the letter of award on Dec 15, 2021, adding that the provision of manpower is for the Petronas group of companies. The contract spans a duration of three years. (The Edge)

PMB Technology: Inks MOU for potential acquisition of Sabah land for new silicon plant. PMB Technology has entered into a memorandum of understanding (MoU) with Sabah Oil & Gas Development Corp SB (SOGDC) for the potential sublease or sale of 200 acres of land at the Sipitang Oil and Gas Industrial Park (SOGIP) in Sabah and development of a new silicon metal production plant there. SOGDCowns and manages SOGIP, which is in the process of being developed into an industrial park dedicated for oil and gas (O&G) activities. (The Edge)

Duopharma Biotech: Targets carbon neutrality by 2030, net zero carbon emissions by 2050. Duopharma Biotech has announced its environmental pledges in conjunction with its latest environmental, social and governance (ESG) roadmap. The company had targeted climate performance as a key focus area, aiming to reduce and minimise activities that contribute to an adverse climate impact. (Btimes)

IPO: Cengild Medical to raise up to RM72m from April 18 ACE Market listing. Cengild Medical is set to be listed on Bursa Malaysia's ACE Market on April 18 under an initial public offering (IPO) of 218.8m new shares in the company at 33 sen each to raise RM72.2m. It will have a market capitalisation of RM270.2m upon listing based on an enlarged number of issued shares of 818.8m. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US and European stocks’ recent winning streak ended on Wednesday, as doubts over the prospect of a peace deal in Ukraine knocked confidence and drove up energy prices. Wall Street’s benchmark S&P 500 index, which had risen 4% over the previous four sessions of consecutive gains, slipped back 0.6%, while the technologyfocused Nasdaq Composite fell 1.2%. Europe’s regional Stoxx 600 index fell 0.4%, having closed on Tuesday at its highest level since February 17. Germany’s Xetra Dax lost 1.4%. Tuesday’s gains had been encouraged by news that Moscow planned to reduce its military operations near Ukraine’s capital, Kyiv. Later on Tuesday, however, Volodymyr Zelensky, Ukrainian President, warned the nation should remain vigilant about Russia’s intentions. In a sign of the continued tensions, Germany and Austria on Wednesday took steps toward rationing gas due to a dispute over payments for shipments from Russia.

Back home, Bursa Malaysia ended mixed on Wednesday with the key index almost flat on lack of market catalyst, although the broader market showed a positive tone. At 5pm, the benchmark FBM KLCI fell 0.2 of-a-point to 1,583.22 from 1,583.42 at Tuesday’s close. The index opened 2.13 points higher at 1,585.55 and moved between 1,580.88 and 1,591.4 throughout the trading session. In regional equity markets, Hong Kong’s Hang Seng share index rose 1.4% after gains on Wall Street on Tuesday. Japan’s Nikkei 225 fell 0.8%.

Source: PublicInvest Research - 31 Mar 2022