US: Inflation surprise puts onus on Fed to hit brakes even harder. The US economy has shown surprising resilience in the face of the fastest inflation and interest-rate hikes in a generation. That means the Fed will have to stomp even harder on demand. What started as a pandemic-driven supply shock has morphed into widespread inflation rooted just as much in resilient demand, underscored by unexpectedly high numbers that dashed hopes price gains were ebbing. While consumers are showing some signs of slowing, they’re still largely keeping up with persistent price pressures, powered by historic wage gains. (Bloomberg)
US: Aug budget deficit widens from a year earlier. The US government posted a USD220bn budget deficit for Aug, up 29% from the USD171bn gap reported in the same month last year, as spending on health services, education and interest on the public debt outstripped a double-digit increase in revenues, the Treasury Department said. (Reuters)
EU: Germany plans USD68bn loan guarantees for energy firms. Germany is set to use a fund created to help companies cope with the economic hit from the pandemic to provide loan guarantees for struggling energy firms, according to a person familiar with the plan. State development bank KfW would oversee the mechanism and the volume of loan guarantees available would be around EUR67bn (USD67.9bn). (Bloomberg)
EU: German inflation rises as estimated in Aug. Germany's consumer price inflation accelerated as initially estimated in Aug, latest figures from Destatis showed. The consumer price index rose 7.9% YoY in Aug, faster than the 7.5% increase in July. That was in line with flash data published on Aug 30. The harmonized index of consumer prices, or HICP, climbed 8.8% YoY after an 8.5% increase in the prior month. The latest figures confirmed the initial estimate. The upward trend in inflation was largely driven by increased prices for energy products and food items. (RTT)
UK: Fears of delays to energy-support package vex UK businesses. UK businesses have still not been given details, figures or the timings of the government’s proposed energy support package, raising fears that it won’t be ready in time to be implemented in Oct. Prime Minister Liz Truss had vowed that firms would receive “equivalent” support to households when she announced her plan for the winter energy crisis last week, raising hopes that help for businesses would be ready at the beginning of next month. (Bloomberg)
UK: Workforce dropouts reduce unemployment to lowest since 1974. Britain’s unemployment rate fell to the lowest since 1974 as more people dropped out of the workforce, fanning upward pressure on wages. The government said 3.6% of adults were out of work and looking for jobs in the three months through July, lower than the 3.8% pace in the previous months. Economists had expected no change. The report also showed wages growing well above the pre pandemic average and a record level of long-term sickness. Together, the figures indicate less slack for the economy to grow without pushing prices past the BOE’s 2% target. (Bloomberg)
Japan: Sept factory mood tanks on cost pressure - Reuters Tankan. Business confidence of Japanese manufacturers retreated in Sept from a seven-month high, while service firms’ sentiment fell to a five-month low, as unyielding cost pressures hit the corporate sector, the Reuters Tankan poll showed. While Japan’s annual consumer inflation remains far modest than global peers at about 2.5%, wholesale inflation has hovered at a near double-digit pace, squeezing profit margins for companies facing inflation-wary clientele and consumers. (Reuters)
India: Surge in services demand helps steady economy in Aug. India’s economy showed signs of stabilizing last month, with strong demand for services helping weather headwinds from high inflation, according to a gauge of earliest available indicators. The indicators showed sentiment in the services sector which accounts for over 50% of the USD3.2trn economy was upbeat, tax revenue were robust and demand for loans high. A rising jobless rate was the main drag during the month. Still, the needle on a dial measuring overall activity was unchanged from July, as the gauge uses a three-month weighted average to smooth out volatility in the single month readings. (Bloomberg)
Australia: Gauges suggest households, firms weathering rate rises. Australia’s consumer sentiment edged up and business confidence further strengthened, suggesting the nation’s economy is so far weathering the sharpest policy tightening in a generation. Westpac Banking Corp’s index of consumer sentiment rose 3.9% to 84.4, while still highlighting pessimists easily outweigh optimists, a report showed. A National Australia Bank Ltd. survey of firms found confidence and conditions, which include profits, sales and jobs, both advanced. (Bloomberg)
Capital A (Neutral, TP: RM0.69): Airasia Ride drivers offered full-time employment. airasia Super App is offering a full-time employment programme for drivers of its e-hailing arm, airasia Ride, a month after a similar offer was made to airasia food and airasia xpress delivery riders. The full-time employment option is an addition to airasia Ride's existing independent drivers’ programme. This will enable them to have a monthly base income of up to RM3,500 including fuel benefits, and the opportunity to earn a total income of up to RM8,000. (The Edge)
AWC: Bags RM62.23m LoA for clinic support services from MOH. AWC has received a Letter of Acceptance from the Ministry of Health (MoH) to provide clinical support services for 19 district clinics in Perak for RM62.23m. The contract will span five years, from Oct 1, 2022, to Sept 30, 2027. The growing portfolio is a testament to the company's competency and capability in maintaining critical healthcare assets. With this award, the company's contract wins for 2022 had surpassed RM330m. This contract brings its current outstanding orderbook to above RM800m. (BTimes)
G Neptune: Obtains shareholders nod for regularisation plan, acquisition of Southern Score for RM252m. Shareholders of G Neptune have approved the regularisation plan, which is expected to address the company's Guidance Note 3 (GN3) status and return it to a stronger financial standing and profitability. The company noted that an integral part of the approved regularisation plan is acquiring the entire equity interest in Southern Score SB from Super Advantage Property SB for RM252m, to be satisfied through the issuance of 1.68bn shares. Shareholders also approved changing the company's name to Southern Score Builders Bhd. (BTimes)
Asdion: To settle RM16.4m debt by issuing new shares. Asdion is issuing 67.67m new irredeemable convertible preference shares (ICPS) and 171.27m settlement shares at 4sen per share and 8sen per share respectively to pay off RM16.41m owed by the company to Kingdom Saga SB and Million Saint Consultancy SB. It has entered into two separate settlement agreements with the two creditors. It owed Kingdom Saga RM7.21m and MS Consultancy RM10m at end-June. The settlement shares and the conversion price for the new ICPS of 8sen represents a slight premium of 0.13% to the five-day VWAP. (The Edge)
MUI: Metrojaya plans latest outlet opening at LaLaport. Malayan United Industries’ (MUI) retail arm MJ Department Stores SB, which runs Metrojaya outlets in Malaysia, is planning to open its latest outlet at the LaLaport Bukit Bintang City Centre retail hub. MUI is an investment holding company that counts retailing, hotels, food and confectionery, financial services and property development as its core businesses. The group is based in Malaysia, but also operates in the UK, continental Europe, the US and the Asia-Pacific. (The Edge)
Cycle & Carriage: To be delisted on Sept 19 following privatisation. Cycle & Carriage Bintang (CCB) will be delisted from the local exchange effective Sept 19. It stated that a listed issuer may withdraw its listing from the official list in relation to a takeover offer under the Take-Overs and Mergers Code, other than those effected by way of a scheme of arrangement, compromise, amalgamation or selective capital reduction, upon 90% or more of its listed shares held by a shareholder or unitholder. (The Edge)
The FBM KLCI might open lower today after Wall Street suffered the worst sell-off since the early days of the pandemic after official data showed US inflation increased unexpectedly in August, raising the spectre the Federal Reserve will need to act more aggressively to combat rising prices. The benchmark S&P 500 stock index tumbled 4.3%, its worst day since June 2020 with 99% of its companies sliding in value. The Nasdaq Composite fell 5.2% as technology groups seen as most exposed to higher rates bore the brunt of the selling. In Europe, the regional Stoxx 600 share gauge closed 1.5% lower, having climbed 1.8% in the previous session. London’s FTSE 100 shed 1.2%.
Back home, Bursa Malaysia snapped its three-day winning streak to end in the red on Tuesday, dragged by profit taking in selected heavyweight counters, particularly banking stocks. At the closing bell, the FBM KLCI dropped 10.12 points, or 0.68%, to 1,487.84 from Monday's close of 1,497.96.
In the region, China’s mainland CSI 300 index rose 0.4% and Hong Kong’s Hang Seng slipped 0.2% as markets in greater China reopened following a national holiday. Japan’s Topix rose 0.3%.
Source: PublicInvest Research - 14 Sept 2022
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Created by PublicInvest | Mar 21, 2024