Economy

US: Consumer fears over inflation hit a record high in March, New York Fed survey shows . Worries are increasing over inflation, with new Federal Reserve data showing a record-high fear over surging prices. Consumers now see inflation hitting 6.6% over the next year, according to the New York Fed’s survey in March, released. That’s a 10% increase in the median expectation just over the past month and the highest level in a series that dates to 2013. (CNBC)

UK: GDP expands marginally in Feb . The UK economy expanded only marginally in Feb as the growth in services was almost offset by contractions in production and construction. GDP grew 0.1% MoM, much slower than the 0.8% increase in Jan, the Office for National Statistics said. This was also weaker than the expected growth of 0.3%. Monthly GDP was now 1.5% above its pre coronavirus pandemic level. GDP expanded 1.0% in three months to Feb. (RTT)

China: Inflation accelerates; factory gate inflation slows . China's consumer price inflation accelerated more than expected in March and producer price inflation eased further, official data showed. Consumer price inflation rose to 1.5% in March from 0.9% in Feb, the National Bureau of Statistics reported. The rate was also above the economists' forecast of 1.2%. Core inflation that excludes energy and food prices, held steady at 1.1% in March. Food prices dropped 1.5%, as prices of pork plunged 41.4% from the last year. At the same time, non-food prices moved up 2.2%. (RTT)

China: Bank lending rises in March. China's bank lending increased notably in March, data from the PBOC showed. Bank extended CNY3.13trn local currency loans in March, which was also above the expected level of CNY 2.67trn. Lending had totaled CNY1.23trn in Feb. The total social financing, the measure of broad credit, increased sharply to CNY4.65trn from CNY1.19trn in the previous month. The expected level was CNY3.7trn. (RTT)

Japan: BOJ cuts view on most Japan regions, warns of Ukraine impact . The Bank of Japan (BOJ) cut its assessment for most regional economies in the country and its governor warned of "very high uncertainty" over the fallout from the Ukraine crisis, underscoring heightening risks to the economic recovery. The downgrade highlights a growing concern among policymakers over the pain from rising commodity costs, and raises the chance that the central bank will cut its growth forecasts in fresh projections due this month. (Reuters)

Thailand: Thai central bank chief says growth a bigger worry than inflation for now. Thailand's central bank will focus monetary policy efforts on shoring up sluggish growth in Southeast Asia's second-largest economy, its chief said, even as surging global price pressures force its peers to raise interest rates. The central bank is among a shrinking number globally that continue to see inflationary pressures as transitory, with more concerns given to a collapse in foreign tourist arrivals caused by the pandemic and its long-term hit to the growth. (Reuters)

Markets

Sime Darby Property (Outperform, TP: RM0.79): SDP-Logos JV secures 50% commitments to inaugural fund. The Sime Darby Property (SDP) and LOGOS SE Asia Pte Ltd joint venture (SDPLOG) announced that it has secured preliminary commitments of 50 per cent for the first close of its inaugural industrial development fund at USD250m. It will focus on investing and developing high-quality industrial and logistics real estate assets in Bandar Bukit Raja in Klang, Selangor. (StarBiz)

Hibiscus (Outperform, TP: RM1.31): Bursa rejects Hibiscus’ third extension application for CRPS issue deadline. Bursa Securities has rejected a third and final application by Hibiscus Petroleum for an extension beyond its March 31 deadline to implement its private placement of preference shares to raise up to RM2bn. (The Edge)

Scomi: Faces delisting after request for more time to submit regularisation plan rejected. Scomi Group said trading in its shares will be suspended with effect from April 20, following Bursa Securities’ rejection of its request for a further extension of time to submit its regularisation plan. The group added that it faces the risk of being delisted from the Main Market of Bursa Malaysia on April 22, unless it files an appeal against the delisting by April 18. (The Edge)

HSS Engineers: Unit accepts RM16.27m consultancy contract. HSS Engineers' unit HSS Integrated SB (HSSI) has accepted a RM16.27m contract from Sambungan Lebuhraya Timur SB to provide engineering consultancy services for an upcoming infrastructure facility in the Klang Valley. HSSI’s scope of services under the contract shall include preparing and finalising the preliminary and detailed engineering design for the project and to provide the relevant technical advisory services. (StarBiz)

MAHB: Appeals to strike out RM480m suit by AirAsia, AAX. Malaysia Airports (Sepang) SB (MASSB) has appealed against a High Court dismissal of its application to strike out the RM479.78m suit by AirAsia and AirAsia X (AAX) over alleged negligence of the management of klia2. (The Edge)

CN Asia: Enters framework agreement relating to a proposed LPG production in Kazakhstan. CN Asia Corporation had entered into a framework agreement with Markmore Energy (Labuan) Ltd And Caspioil Gas Llp (COG), after negotiating for further terms and conditions in relation to a project at the Rakushechnoye Oil and Gas Field in Kazakhstan. (The Edge)

Caely: Says unable to ascertain impact until forensic audit probe is completed. Caely Holdings, which had appointed an independent forensic auditor to look into allegations of suspicious and irregular transactions, has said it will not be able to ascertain the financial and operational impact of the matters until the investigation is completed. (The Edge)

Market Update

Overnight, global stocks, government bonds and oil prices slid as investors worried about the effect of rising interest rates and inflation in Europe and the US, and coronavirus lockdowns in China. Wall Street’s benchmark S&P 500 fell 1.7%, led lower by technology and energy stocks. The tech-heavy Nasdaq Composite shed 2.2%. The US declines followed losses across most of Asia and Europe earlier in the day. The Europe-wide Stoxx 600 index lost 0.6%, with the UK’s FTSE 100 dropping 0.7% after data showed the UK economy barely expanded in February. The 10- year German Bund yield jumped 0.11 percentage points to 0.81%, its highest level since mid-2015. French markets provided a rare bright spot after the first round of presidential elections over the weekend. Incumbent Emmanuel Macron is expected to defeat far right rival Marine Le Pen in the final round of voting in two weeks, though polls suggest a tighter race than in 2017. Paris’s CAC 40 stock index ended the day 0.1% higher, while the gap between French and German bond yields — a measure of the perceived riskiness of holding French debt — narrowed.

Back home, Bursa Malaysia closed slightly lower on selling pressure in most sectors, led by healthcare and financial services counters, in line with the weaker regional market performance. At 5pm, the benchmark FBM KLCI was 2.68 points or 0.17% easier at 1,604.61 compared with Friday’s close of 1,607.29. In the region, the Hang Seng China Enterprises index of mainland Chinese stocks slipped 3.8% and China’s benchmark CSI 300 index of Shanghai- and Shenzhen-listed shares shed 3.1% as the impact of lockdowns imposed on Shanghai to limit the spread of Covid began to weigh on economic activity. Elsewhere, Hong Kong's Hang Seng Index declined 3.03% to 21,208.3, Japan's Nikkei 225 lost 0.61% to 26,821.52, South Korea’s Kospi inched down 0.27% to 2,693.1 and Singapore’s Straits Times Index weakened 0.58% to 3,363.56.

Source: PublicInvest Research - 12 Apr 2022