Economy

US: Dollar dips, Powell testimony and jobs data in focus. The greenback slipped against a basket of currencies as investors awaited testimony by Fed Chair Jerome Powell and jobs data due later this week for further indications on how much higher the US central bank is likely to raise interest rates. Powell’s testimony before Congress on Tuesday and Wednesday and Friday’s jobs data are going to be the key events this week that really substantiate the data last month with respect to the Jan numbers. (Reuters)

US: NY Fed says supply chain pressures normalized in Feb. Global supply chains have "returned to normal," the Fed Bank of New York said, with pressures dropping to the lowest since before the COVID-19 pandemic threw a wrench into procurement networks worldwide and created shortages for everything from microchips to motor vehicles. In a development that could also point to softening inflation, the New York Fed said its monthly Global Supply Chain Index fell to a reading of negative 0.26 in Feb, down from a revised 0.94 seen in Jan. (Reuters)

US: Factory orders pull back sharply in Jan. New orders for US manufactured goods pulled back sharply in the month of Jan, according to a report released by the Commerce Department. The Commerce Department said factory orders slumped by 1.6% in Jan after surging by a downwardly revised 1.7% in Dec. Economists had expected factory orders to tumble by 1.8% compared to the 1.8% jump originally reported for the previous month. (RTT)

EU: Eurozone retail sales rise less than expected. Eurozone retail sales grew less than expected at the start of the year suggesting that high inflation continued to eat into consumer spending, data from the statistical office Eurostat showed. Retail sales increased only 0.3% in Jan from Dec, when turnover was down 1.7%. Economists had forecast 1.0% growth. Both food and non-food product sales rebounded in Jan. (RTT)

EU: German construction downturn eases in Feb. Germany's construction activity continued to remain in contraction in Feb though the pace of decline has softened since the start of the year amid cooling cost pressures and supply-chain constraints, survey results from S&P Global showed. The construction Purchasing Managers' Index, or PMI, rose to an 11-month high of 48.6 in Feb from 43.3 in the previous month. (RTT)

EU: Hungary retail sales fall 4.5%. Hungary's retail sales declined for the second straight month in Jan, data from the Hungarian Central Statistical Office showed. The volume of retail sales fell a working-day adjusted 4.5% yearly in Jan, after a 4.1% decrease in Dec. Further, this was the steepest rate of fall since Feb 2021, when sales had dropped 5.5%. (RTT)

UK: Construction sector rebounds in Feb. British construction activity grew at its fastest pace in nine months in Feb after two months of declines, as a rebound in commercial work and civil engineering helped offset a continued fall in house-building, a survey showed. The S&P Global/CIPS UK Purchasing Managers’ Index (PMI) for the construction sector jumped to 54.6 in Feb, up from 48.4 in Jan, its highest since May 2022 and well above economists’ average expectation of 49.1 in a Reuters poll. (Reuters)

UK: Car Registrations Surge 26.2% In Feb. British car registrations increased for the seventh straight month in Feb on the back of strong demand for battery electric vehicles along with easing supply-chain constraints, data from the Society of Motor Manufacturers and Traders, or SMMT showed. Car registrations showed a double-digit annual growth of 26.2% in Feb following a 14.7% rise in Jan. (RTT)

China: Sets modest growth target amid challenging external environment. China set a moderate growth target for this year which would require no strong stimulus to achieve given the rebound the economy gained from the relaxation of the Covid pandemic restrictions. Outgoing Premier Li Keqiang announced a growth target of around 5.0% in 2023 at the annual legislative session on Sunday as officials turn their focus on other areas like technology and infrastructure than mere economic indicators. (RTT)

South Korea: Slowest inflation in 10 months bolsters views for no more hikes. South Korea's consumer inflation for Feb hit its slowest pace in 10 months, bolstering views that the central bank is done with its current policy tightening cycle after it held rates steady last month. Asia's fourth-biggest economy is teetering near the edge of a recession and policymakers will be wary of overtightening in the face of a slowdown in global growth and overseas demand for its major exports such as chips and consumer electronics. (Reuters)

Markets

KPJ Healthcare (Outperform, TP: RM1.25): To sell Jakarta Hospital stake for RM150.2m. KPJ Healthcare is disposing of 75% equity interest in its hospital PT KPJ Medica (KPJM) in Jakarta plus and, namely 100% stake in PT Al-Aqar Bumi Serpong Damai (AABSD) to PT Nusautama Medicalindo (PTNM) for a total enterprise value of RM150.2m. KPJ said, however, the amount to be received from the disposals is RM156.7m and the difference of RM6.53m accounts for the net debt in KPJM and AABSD. (Bernama)

Citaglobal: Wins RM200m Sanglang Project EPC contract . Citaglobal has secured a RM200m letter of intent to undertake engineering, procurement and construction (EPC) works for the development of the Sanglang Integrated Jetty project in Perlis. The group said its wholly-owned subsidiary, Citaglobal Engineering Services SB, had received the EPC contact from Mutiara Perlis SB. The full development of the Sanglang Project is divided into four phases, which are Phase 1A, Phase 1B, Phase 2 and Phase 3. The contract sum of Phase 1A is RM200m, while the contract sum for the other phases have yet to be determined. (StarBiz)

Key Asic: Wins four design service contracts worth RM16m. Key Asic has entered into four turnkey ASIC design service contracts worth a total of RM16m. The chipmaker said two of the contract were from existing end customers and two were new customers, one of which is a Hong Kong-based customer. The total value of these four projects is RM16m over a three-year period, bringing the total value of multiple contracts of over RM70m since October 2022. (StarBiz)

MMAG: Faces lawsuit over non-payment of instalments. MMAG Holdings Bhd said its 80%-owned subsidiary MJets International SB is facing a lawsuit for alleged non-payment of monthly repayment instalments. The suit was filed by Comone International Logistics Co Ltd, which claims that MJets did not pay the instalments for the cancellation of the proposed joint venture agreements by MJets’ previous management in 2020, before it became a subsidiary of MMAG. (The Edge)

Sedania: Fintech unit to tap Wasiyyah Shoppe's growth prospect. Sedania Innovator will be tapping Wasiyyah Shoppe’s growth potential by providing innovative digital solutions to a vast network of financial services institutions (FSIs). Sedania said its fintech subsidiary, Sedania As Salam Capital SB (SASC) had signed an agreement with Wasiyyah Shoppe to become its exclusive corporate partner. Under the partnership agreement. (StarBiz)

Solarvest: To construct grid-connected solar PV plants in the Philippines. Solarvest Holdings Bhd has formed a consortium with a solar energy solutions provider based in the Philippines to provide rural electrification in Mindanao Island there. Solarvest said it is partnering with Edward Marcs Philippines Inc to work with Philippine government-owned National Power Corporation (NPC) to construct electricity distribution systems in rural areas. Small grid-connected solar photovoltaic (PV) power plants will be installed at distribution substations within the geographical region. (The Edge)

Theta Edge: Bid for 70% stake in MoF Inc unit Transit Acquirer. Theta Edge said it has participated in the request for proposal (RFP) issued by the Minister of Finance Inc (MoF Inc) to acquire a 70% stake in Transit Acquirer SB (TASB). (The Edge)

Market Update

The FBM KLCI might open flat after US blue-chips advanced for a third session on Monday — but barely — as investors awaited crucial data and central banker comments to give more direction on the future path for interest rates. The benchmark S&P 500 squeezed out a 0.1% gain, having been up almost 1% around midday, but the tech-heavy Nasdaq Composite ended down 0.1% after earlier rising 1.2%. Investors have in recent weeks been forced to readjust forecasts for interest rates and economic growth in the US and Europe after a succession of data in February indicated a series of aggressive rate rises had yet to fully tame inflation. European stocks closed mixed although worries about Chinese growth weighed on commodity prices and dragged the FTSE 100 lower. London’s blue-chip index shed 0.2%. Europe’s benchmark Stoxx 600 gave up early gains to finish flat but some individual markets did better, with Germany’s Dax up 0.5% and France’s CAC 40 ending 0.3% higher. European stocks were dented somewhat by the release of Eurozone retail sales data. Month-on-month growth was 0.3% in January.

Back home, Bursa Malaysia bucked the regional trend to end slightly lower on Monday, dragged down by last-minute selling of selected heavyweight stocks. At the closing bell, the benchmark FBM KLCI had eased 0.87 of a point to 1,452.68, from last Friday’s closing at 1,453.55. In the region, Hong Kong's Hang Seng Index added 0.17% to 20,603.19 while Japan’s Nikkei 225 rose 1.11% to 28,237.78 and South Korea’s Kospi gained 1.26% to 2,462.62.

Source: PublicInvest Research - 7 Mar 2023