Economy

US: Pending home sales slump more than expected in Aug. Pending home sales in the US fell for the third straight month in Aug. NAR said its pending home sales index dove by 2.0% to 88.4 in Aug after falling by 0.6% to a revised 90.2 in July. Economists had expected pending home sales to tumble by 1.4% compared to the 1.0% slump originally reported for the previous month. Compared to the same month a year ago, pending home sales in Aug were down by 24.2%. (RTT)

EU: German consumer sentiment to slide again on high inflation . Germany's consumer sentiment is set to fall again to a fresh record low in Oct as high inflation amid rising energy prices hit income expectations, and consumer spending. The consumer confidence index plunged to -42.5 in Oct from revised -36.8 in the previous month. The score was also weaker than the economists' forecast of -39.0. (RTT)

EU: Denmark retail sales rise slightly in Aug. Denmark's retail sales increased for the second successive month in Aug, though marginally. Retail sales edged up 0.1% MoM in Aug, after rising 0.2% in July. Sales of food and other groceries increased 1.5% monthly in Aug, and those of clothing gained 0.5%. This was offset by a 1.1% fall in sales of other consumables. On a yearly basis, retail sales decreased further, down 5.0% in Aug, following an 8.6% stable rate of fall in the previous month. (RTT)

UK: BoE intervenes in bond market to restore stability. The Bank of England (BoE) decided to intervene in the government bond market to reduce any risks from contagion to credit conditions for the real economy, following the chaos developed in the currency and gilt markets after the government's massive tax cuts announced in the 'mini-budget' on Sep 23. The UK government also came under pressure from the IMF that in a rare move, voiced criticism against the tax cuts and the fiscal package. (RTT)

Japan: Leading index falls more than estimated. Japan's leading index weakened more than initially estimated in July. The leading index, which measures the future economic activity, fell to 98.9 in July from 100.3 in June. In the initial estimate, the reading was 99.6. The latest score was the weakest since Jan 2021. The coincident index that measures the current economic situation, improved to 100.1 in July from 99.2 in the previous month. (RTT)

Australia: Retail sales rise 0.6% on month in Aug. The value of retail sales in Australia was up a seasonally adjusted 0.6% on month in Aug - coming in at AUD34.881bn. That beat forecasts for a gain of 0.4% following the 1.3% increase in July. Individually, food (1.1%), household goods (2.6%), department stores (2.8% and cafes and restaurants (1.3%) all saw increases, while clothing (- 2.3%) and other (-2.5%) were down. (RTT)

Thailand: Central bank raises rate by 25 bps. Thailand's central bank raised its key interest rate for the second time this year as inflation continued to remain well above the target. The Monetary Policy Committee of Bank of Thailand unanimously decided to lift the policy rate by a quarter-point to 1.00% from 0.75%. This was the second rate hike this year after a 25bps increase in Aug, which was the first such action since Dec 2018. (RTT)

Markets

Heng Huat: Trading of Heng Huat’s securities halted pending material announcement. Trading in the shares and warrants of Heng Huat Resources Group will be halted on 29 th Sept 2022, pending the release of a material announcement. Heng Huat said Bursa Malaysia Securities had approved the company's request for trading suspension. (The Edge)

K-One: Gets MOH approval to sell silicone adhesive tapes for wound care dressing . K-One Technology has secured approval from the Health Ministry’s Medical Device Authority (MDA) to market silicone adhesive tapes primarily used for wound care dressing. The K-One group will sell the silicone adhesive tapes in Malaysia as an authorised representative of Wuhan Huawei Technology Co Ltd, which is the manufacturer based in China, the group said in a filing. The approval will provide the opportunity for the K-One group to further expand its medical device business. (The Edge)

Uchi Tech: Disposes of Penang Island tract for RM19m . Uchi Technologies has entered into an agreement with XFS Bhd to dispose of a tract of leasehold land including a factory building and structure in Seberang Perai Tengah on Penang Island for RM19m. The group said the tract measured about 12,999.4855 sqm. Uchi Tech said the property was not required for its operation and the disposal would realise its investment in the property. It adde that the disposal is expected to result in an estimated gain of RM9.55mil. (StarBiz)

Ageson: Unit enters MoU to sell 9.3-acre Gombak land ahead of proposed development . Ageson's 99%-owned subsidiary Solidvest Properties SB has entered into a memorandum of understanding with Koperasi Belia Nasional (Kobena) to sell a 9.325-acre tract of land in Gombak, Selangor, for a consideration of RM35m cash. Kobena intends to appoint Solidvest as the developer for a proposed residential development on the land comprising of 56 semi-detached houses and four bungalows, as well as a pump house and suction tank and an electrical substation. According to Ageson, the estimated GDV of the project is RM85.2m while the estimated gross development cost is RM41.2m, which will be jointly financed by Solidvest's collaboration partner, ShuangLing Holdings Ltd. (StarBiz)

Central Global: Unit bags RM183.29m sub-contract from Pembinaan Urusmesra . Central Global’s (CGB) 70%-owned subsidiary, RYRT International SB, has secured a sub-contract works from a third-party main contractor, Pembinaan Urusmesra SB, worth RM183.29m. It said the contract also included the supply of plant, machinery, labour and materials required for the construction and completion of a project known as "Projek Jalan Semawang Ke Tanjung Kuala Gum-Gum, Sandakan, Sabah”. It said the project shall commence on Oct 14, 2022 and is estimated to be completed by Oct 13, 2025. (Bernama)

IPO: ACE Market-bound Betamek aims to raise RM34m from IPO . Betamek which is slated to be listed on Bursa Malaysia’s ACE Market on Oct 26, aims to raise RM33.8m from its IPO exercise. Under the listing exercise, Betamek is issuing 67.5m new shares, representing 15% of the enlarged share capital at an issue price of 50 sen per share. Based on the enlarged share capital of 450m shares, Betamek is expected to have a market capitalisation of RM225m upon listing. (The Edge)

Market Update

The FBM KLCI might open higher today as investors on Wednesday piled into US stocks and government bonds, following a rally in UK assets after the Bank of England intervened to calm turmoil in the gilt market. The central bank on Wednesday announced it would buy long-dated gilts in light of the recent “significant repricing” of UK government debt. The recovery in UK bonds bolstered the 10-year US Treasury, the yield on which fell 0.24 percentage points to 3.73% as investors bought the notes. Earlier on Wednesday the yield pushed higher than 4% for the first time since 2010. The blue-chip S&P 500 ended the day up 2% to end a six-session losing streak. The US benchmark on Tuesday touched its lowest intraday level since November 2020 over investor concerns about the pace of interest rate rises to combat inflation, as well as the effects of the UK’s fiscal and monetary policy on global economic growth. The tech-heavy Nasdaq Composite rose 2.1%. UK equities rebounded following the central bank’s move. The FTSE 100 closed 0.3% higher, but had been down 1.9% earlier in the session.

Back home, Bursa Malaysia ended broadly lower on Wednesday, with the benchmark index heading towards the 1,400 psychological level, in tandem with regional markets amid growing concerns about a global recession. At the closing bell, the benchmark FBM KLCI slipped 8.98 points or 0.64% to settle at 1,401.89, from Tuesday’s close of 1,410.87. In the region, Japan’s Nikkei 225 Index slid 1.50% to 26,173.98, and Hong Kong’s Hang Seng Index tumbled 3.41% to 17,250.88.

Source: PublicInvest Research - 29 Sept 2022