Economy

EU: Two-speed euro zone economy as services shine, factories struggle. Euro zone business growth unexpectedly accelerated this month, with the bloc's dominant services sector seeing a sharp increase in activity as consumers shrugged off soaring prices. Manufacturers, however, struggled as supply chain disruptions caused by the pandemic have been exacerbated by Russia's invasion of Ukraine and renewed lockdowns in China. S&P Global's Flash Composite Purchasing Managers' Index, seen as a good gauge of overall economic health, rose to 55.8 in April from 54.9 in March, confounding expectations in a Reuters poll for a fall to 53.9. Any reading above 50 indicates growth. (Reuters)

UK: Private sector growth moderates in April. The UK private sector growth moderated to a three-month low in April, reflecting the slowest growth in new orders so far this year, flash survey results from S&P Global. The S&P Global/Chartered Institute of Procurement & Supply flash composite output index fell more-than expected to 57.6 in April from 60.9 a month ago. The reading was seen at 59.7. Nonetheless, a reading above 50.0 indicates expansion in the sector. The services Purchasing Managers' Index came in at 58.3 in April, down from 62.6 in March and below the forecast of 60.0. The manufacturing PMI also dropped in April, to 55.3 from 55.2 a month ago. (RTT)

UK: GfK consumer confidence near historic low. UK consumer confidence dropped to a near historic low in April as rising inflation and interest rates dampened household finances. The consumer sentiment index declined to -38 in April from -31 in March. All five measures were down in comparison to the March 25th announcement. There's clear evidence that Brits are thinking twice about shopping, as seen in the tumbling Major Purchase Index - now is not considered to be a good time to buy. This is dire news for consumer confidence and with little prospect of any economic relief on the horizon we can only forecast further falls in the Index for the year ahead. (RTT)

China: Industrial output in Shanghai falls for first time in 2 years. Industrial output in Shanghai, China's most populous city,  slumped in March, the first monthly decline in two years, after stringent lockdown measures halted production in some factories. Industrial production dropped by 7.5% YoY, Wu Jincheng, chairman of Shanghai's economic planning agency, said at a press conference. Monthly output last fell in March 2020. "The latest virus outbreak has greatly impacted the city's industrial activities, leading to March's output being down 7.5% YoY," Wu said. The city's industrial output growth in the 1Q slowed to 4.8% on a year earlier, Wu said. (Reuters)

Japan: Manufacturing PMI fades to 53.4 in April. The manufacturing sector in Japan continued to expand in April, albeit at a slower rate, the latest survey from Jibun Bank showed with a manufacturing PMI score of 53.4. That's down from 54.1 in March, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. Manufacturers registered an expansion in output levels for the sixth time in seven months, while new order growth continued for a seventh month running, albeit at a softer rate. Concurrently, the rate of job creation dipped to a nine month low amid a softer rise in backlogs. Sustained shortages of inputs contributed to a further rapid rise in costs however, while business confidence softened to the weakest since June 2020. (RTT)

Japan: Inflation jumps 1.2% on year in March. Overall consumer prices in Japan climbed 1.2% on year in March, the Ministry of Internal Affairs and Communications said. That exceeded expectations for an increase of 1.0% and was up from the 0.9% gain in Feb. On a monthly basis, overall inflation was up 0.4% - unchanged from the previous month and in line with expectations. Core CPI was up 0.8% on year - also matching expectations and accelerating from 0.6% a month earlier. (RTT)

Australia: Manufacturing PMI improves to 57.9 in April. The manufacturing sector in Australia continued to expand in April, and at a faster rate, the latest survey from S&P Global showed on Friday with a manufacturing PMI score of 57.9. That's up from 57.7 in March, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Manufacturing production expansion accelerated in April amid faster new orders growth. This was underpinned by better local and overseas demand with new export orders seeing growth for the first time in four months. (RTT)

Taiwan: Jobless rate rises in March. Taiwan's unemployment rate rose slightly in March, the Directorate General of Budget Accounting & Statistics showed. The unemployment rate rose a seasonally adjusted 3.70% in March from 3.67% in Feb. In the same period last year, the jobless rate was 3.71%. On an unadjusted basis, the jobless rate rose marginally to 3.66% in March from 3.65% a month ago. The number of unemployed persons increased by 1,000 to 435,000 in March from 434,000 the previous month. (RTT)

Hong Kong: Inflation at 3-month high. Hong Kong's consumer price inflation rose to the highest level in three months in March, data released by the Census and Statistics Department. Consumer prices increased 1.7% YoY in March, following a 1.6% rise in Feb. Netting out the effects of all government's one-off relief measures, the underlying inflation also rose to 1.7% in March from 1.6% in the previous month. The Lunar New Year between two years occurred in early Feb this year, but in mid-Feb last year. In the 1Q, the composite CPI rose 1.5% annually. (RTT)

Markets

Can-One: Partners private developer for RM478.8m GDV commercial project on its freehold plots in Kapar. Can-One is partnering a local private developer to build factories and hostel on two freehold plots of land it owns via a subsidiary in Selangor, that will have an estimated gross development value of RM478.8m. Can-One inked a development agreement with WorldKlang Group Property Development SB for the proposed project — dubbed Excellent Technology Park — on the lands, which measure a total of 2.96m sq ft. (The Edge)

Fitters Diversified: Seeks to sell property, stake in PVC-O pipe maker to raise money for working capital. Fitters Diversified is selling its entire 72.27% stake in Molecor (SEA) SB, which manufactures PVC-O pipes, to Spain-based Molecor Tecnologia SI. Molecor Tecnologia currently owns 2.73% in Molecor SEA, while the remaining 25% stake is held by Sanlens SB. At the same time, Fitters is selling a 369,824 sq ft piece of land and an industrial premises in Gebeng II to United Sapphire SB. The proposed transactions provide an opportunity for it to obtain immediate cash flow, which can be channelled towards the company’s business operations for working capital. (The Edge)

MBSB: Inks exclusivity agreement for MIDF buy talks. Malaysia Building Society (MBSB) and Permodalan Nasional Bhd have entered into an exclusivity agreement to negotiate exclusively with each other to finalise the structure, pricing and terms and conditions for MBSB's proposed acquisition of Malaysian Industrial Development Finance Bhd (MIDF) until Oct 5. (The Edge)

Sunsuria: Buys Selangor land for RM74m. Sunsuria is buying a 60.81-acre piece of land in Ijok, Selangor for RM74.17m, as part of its plan to accumulate strategic industrial land for property investment and/or development purposes. On April 22, Sunsuria has entered into a sale and purchase agreement with Superjet Revenue SB for the proposed land acquisition. (The Edge)

Excel Force: Eyes new markets overseas. Excel Force MSC is looking to replicate its business model and products to other markets overseas, particularly in less developed countries. They are looking at less developed markets such as Bangladesh and have been invited a number of times to participate in tenders. The Group is also looking at Vietnam and Indonesia for its expansion. (StarBiz)

CTOS: 1Q net profit surges 62.3%, revenue up 12.4%. CTOS Digital's net profit jumped 62.3% to RM12.48m in the 1Q ended March 31, 2022 from RM7.69 m. The company said this was achieved on the back of stronger revenue on improved performance across all business segments. Group revenue in the same quarter rose 12.4% to RM42.7m from RM38m. (New Straits Times)

Market Update

Last Friday, US stocks tumbled with the S&P 500 registering its biggest one-day loss since March as traders anticipated central banks on both sides of the Atlantic raising interest rates to curb inflation. The 2.8% decline in the benchmark S&P 500 came a day after Federal Reserve chair Jay Powell said a 0.5 percentage point interest rate rise was “on the table” in an effort to combat soaring inflation. The weekly decline was also 2.8%. The technology-heavy Nasdaq Composite lost 2.6%, for a 3.8% weekly decline as investors pulled out of growth stocks as inflation expectations have surged. The US 10-year break-even — a closely watched gauge of market inflation expectations over the next decade — climbed to 3.08% on Friday, its highest level in at least two decades. Meanwhile the Cboe’s Vix volatility index, which measures expected swings in the S&P 500 and is known as Wall Street’s “fear gauge”, climbed to a one-month high of 28.3. Europe’s regional Stoxx 600 share index closed 1.8% lower as the spectre of higher borrowing costs in the eurozone weighed on companies’ earnings prospects, taking the gauge’s loss for the year to date to more than 7%.

Back home, Bursa Malaysia closed the week higher on bargain hunting in selected heavyweights, with the barometer index ending just a whisker above the key 1,600 level, despite weak market sentiment across the region. At 5pm, the benchmark FBM KLCI rose 3.65 points or 0.22% to 1,601.97 on Friday, from Thursday’s close of 1,598.32. In the region, China’s CSI 300 share index added 0.4% after the nation’s securities regulator urged domestic banks and insurers to support the stock market. Elsewhere, Japan’s Topix fell 1.2%.

Source: PublicInvest Research - 25 Apr 2022