Economy

US: Consumer sentiment improves, inflation expectations rise. US consumer sentiment improved to a 13-month high in Feb, but households expected higher inflation to persist over the next 12 months, a survey showed. The University of Michigan's preliminary Feb reading on the overall index of consumer sentiment came in at 66.4, the highest reading since Jan 2022, up from 64.9 in the prior month. Economists polled by Reuters had forecast a preliminary reading of 65.0. The sentiment index has rebounded from a low of 50.0 in June last year. The survey's measure of current economic conditions increased to a reading of 72.6 this month from 68.4 in Jan. Its gauge of consumer expectations dipped to 62.3 from a reading of 62.7 last month, likely reflecting lingering recession fears. (Reuters)

US: Revisions show US consumer prices a bit firmer than previously reported. US monthly consumer prices rose in Dec instead of falling as previously estimated and data for the prior two months was also revised up, which some economists said raised the risk of higher inflation readings in the months ahead. The consumer price index edged up 0.1% in Dec rather than dipping 0.1% as reported last month, the Labour Department's annual revisions of CPI data showed. Data for Nov was also revised higher to show the CPI increasing 0.2% instead of 0.1% as previously estimated. In Oct, the CPI rose 0.5%, revised up from the previously reported 0.4% increase. (Reuters)

US: Commodities regulator delays traders report again after ION attack. The US Commodity Futures Trading Commission (CFTC) will postpone again its publication of a weekly Commitments of Traders report, according to the ICE exchange and a CFTC email seen by Reuters. The CFTC “has not received all the data required,” the agency said in the email to an analyst. A spokesperson for the agency has not responded to a request for comment. Last week, the CFTC said the weekly Commitments of Traders report would be “delayed until all trades can be reported,” following a ransomware attack on a unit of ION Markets. Euronext also postponed until further notice a weekly report on positions held in its commodity derivatives. (Reuters)

EU: German benchmark yields set for biggest weekly rise of 2023. German government bond yields edged higher toward the most significant weekly rise of 2023 as European Central Bank (ECB) policymakers fought back against expectations for a quick end of the monetary tightening cycle. The Bundesbank’s president, Joachim Nagel, said the ECB must act decisively to prevent inflation expectations from rising far above its 2% target, reaffirming his call for more interest rate increases. Markets price in 100 bps of further rate hikes as the Aug 2023 ECB euro short-term rate (ESTR) forward was around 3.45%, the highest level on record, implying a deposit rate above 3.5%. (Reuters)

UK: Economy shows zero Q4 growth, narrowly avoids recession. Britain's economy showed zero growth in the final three months of 2022, enough for it to avoid entering a recession for now but faces tough prospects in 2023 as households continue to wrestle with double-digit inflation. Monthly GDP data for Dec when there were widespread strikes in the public sector, rail and postal services showed a 0.5% contraction, the Office for National Statistics said, larger than the 0.3% forecast. Even so, Friday's figures will offer some relief to Prime Minister Rishi Sunak and his finance minister Jeremy Hunt, as they seek measures to spur a rebound in their upcoming annual budget on March 15. (Reuters)

China: Bank lending hits record on corporate loans. Chinese banks extended a record level of loans at the start of the year after the relaxation of pandemic related restrictions boosted demand for credit from the corporate sector, but household lending slowed. Banks extended CNY4.9trn in new yuan loans in Jan, data released by the People's Bank of China revealed. Lending was higher than the CNY4.0trn economists' had expected and Dec's 1.4trn new yuan loans. M2 broad money supply expanded 12.6% on a yearly basis in Jan, faster than the 11.8% increase in Dec. The rate was forecast to ease to 11.6 %. Total social financing, a broad measure of credit and liquidity in the economy, increased to CNY5.98trn from CNY 1.31trn in Dec. (RTT)

Japan: Kazuo Ueda nomination as BOJ chief a harbinger of policy shift. Friday saw an end to speculation and a twist in the saga of the candidate selection for the post of Bank of Japan Governor after Japanese media broke the news that Prime Minister Fumio Kishida's government has picked Kazuo Ueda, a renowned economist and a former policymaker at the central bank, for the top job. The Japanese yen surged on the news that came as a surprise as Masayoshi Amamiya, one of the two BoJ Deputy Governors who was widely seen as a continuity candidate, was expected to be named the successor to Haruhiko Kuroda. The yield on 10-year Japanese government bonds inched closer to the 0.5% limit in Dec. (RTT)

India: Industrial production growth slows. India's industrial production grew less than expected in Dec, with the pace slowing sharply from the previous month, preliminary figures from the statistics ministry showed. The industrial production index rose 4.3%YoY following a 7.3% increase in Nov. Economists had expected a 4.5% gain. In the same month a year ago, the industrial production grew 1.0%. Manufacturing output rose 2.6% annually in Dec. Electricity generation grew 10.4% and the mining sector production increased 9.8%. Within manufacturing, production of pharmaceuticals, medicinal chemical and botanical products registered the biggest growth of 16.0%. Food production grew 1.2%. (RTT)

Markets

TNB (Outperform, TP: RM12.42): Accelerates responsible energy transition drive, partners Thailand's energy players. Tenaga Nasional Bhd (TNB) is accelerating its responsible energy transition (ET) agenda through three proposed collaborations with major energy players in Thailand to capitalise on regional demand and potential for greener power in Asean. (Bernama)

Iris Corp: To dispose of 80% stake in unit for RM70m. Iris Corporation Bhd (Iris Corp) has entered into a shares sale agreement (SSA) with Tass Tech Technologies SB (Tass Tech) for the disposal of 80% equity interest in its unit, Iris Information Technology Systems Sdn Bhd (IITS), for RM70m in cash. Iris Corp said the proposed disposal would enable the company to unlock its investment in IITS, and the disposal consideration will contribute positively to its cash flow. (Bernama)

Visdynamics: Plans one-for-two bonus issue of shares. Visdynamics Holdings has proposed a one-for-two bonus issue of shares to reward its existing shareholders. It entails the issuance of up to 87.6m new shares to the entitled shareholders. At the same time, the company also proposed a bonus issue of warrants, involving the issuance of up to 65.7m new warrants on the basis of one warrant for every four shares held after the completion of the proposed bonus issue of shares. (The Edge)

MyEG: Buys back another 2m shares for RM1.22m. MyEG Services bought back an additional 2m shares of the company at 61 sen apiece for a total of RM1.22m. This is the third block of shares it purchased this week. In total, the e-government service provider has spent RM4.1m for 6m shares in its share buyback. (The Edge)

Revenue: Ng brothers file defence and counterclaim against Revenue Group. Revenue Group said its co-founders Brian Ng Shih Chiow and Dino Ng Shih Fang have filed their defence and a counterclaim against the group, stating that their suspension as its directors was invalid. The two brothers, who collectively hold a 19.497% stake in the e-payment solutions provider, were suspended last month after several complaints were received against them. (The Edge)

Globaltec: Inks HOA with PT Laras Energy on coal bed methane supply in South Sumatra, Indonesia. Globaltec Formation announced that its subsidiary NuEnergy Gas Ltd has inked the Heads of Agreement with PT Laras Ngarso Gede for the supply and sale of coal bed methane in the Tanjung Enim Production Sharing Contract in South Sumatra, Indonesia. PT Laras Energy is a downstream natural gas and its derivative products provider. (The Edge)

Matang: Buys property assets from Star Media for RM33m. Matang is buying a property from Star Media Group Bhd for RM33m. The two units of double storey semi-detached factory and warehouse annexed with a one-and-a-half-storey office building and other ancillary buildings are located within the Star Business Hub in Bukit Jelutong, Shah Alam. (The Edge)

AWC: Inks MOU to explore water infrastructure jobs in Indonesia’s new capital city. AWC has entered into a MOU with Techkem Group SB and Alliance MEP (Sarawak) SB to jointly explore water infrastructure projects within the development of Nusantara National Capital City, Indonesia. (The Edge)

Market Update

US markets ended the day mixed last Friday amid a slew of corporate earnings announcements while various Federal Reserve speakers reiterated their cautionary messages that there is more work to be done to tame inflationary pressures. On the day, the Dow Jones Industrial Average and S&P 500 inched 0.5% and 0.2% higher though the Nasdaq Composite slipped 0.6%. European markets were mostly lower as UK’s preliminary 4Q Gross Domestic Product (GDP) number added to concerns about a global recession this year. Investors are also continuing to monitor the possibilities of further monetary tightening in the US. UK’s FTSE and France’s CAC 40 slipped 0.4% and 0.8% as Germany’s DAX tumbled 1.4%. Most Asian markets were also lower earlier in the day as US Treasury yields ramped up fears of a looming recession while weaker-than-expected Chinese inflation data also weighed on sentiment. The Shanghai Composite and Hang Seng indices fell 0.3% and 2.0%. Japan’s Nikkei 225 bucked trends to gain 0.3% however. The coming week will be watched with keen interest as the US releases its consumer price index number for January, one which may determine the Federal Reserve’s path forward. Singapore is slated to release its 4Q 2022 GDP number later today.

Source: PublicInvest Research - 13 Feb 2023