Economy

US: Yields drop after initial jobless claims data, stocks tumble. Shorter-dated US Treasury yields declined after labour market data showed weekly initial jobless claims rose more than expected last week while stocks on Wall Street sold off to sap risk appetite. New claims for unemployment benefits increased by 21,000 last week to a seasonally adjusted 211,000, the most in five months, although the trend continues to indicate a tight labour market. The yield on 10-year Treasury notes was down 5.3 basis points at 3.923%. The jobless claims data comes ahead of Friday’s payrolls report, which is expected to show nonfarm payrolls increased by 205,000 jobs in Feb after surging 517,000 in Jan. The unemployment rate is forecast unchanged at a more than 53-1/2-year low of 3.4%. (Reuters)

EU: France payroll employment increases in Q4. France's payroll employment increased in the Q4 reflecting the improvement in the private sector job creation, final data from the statistical office INSEE showed. Overall payroll employment grew 0.2% or 44,000 in the Q4. However, this was slower than the 0.3% or 84,100 jobs created in the third quarter. Payroll employment has grown for the eighth straight month. The overall increase was mainly due to a 0.2% rise in private payroll employment.(RTT)

UK: Housing market remains downbeat in Feb. The UK housing market activity continued the downbeat trend in Feb amid tighter lending conditions and stretched mortgage affordability, though there were signs of gradual improvement over the coming months, the Royal Institution of Chartered Surveyors reported. The headline reading for new buyer enquiries advanced to -29% in Feb from - 45% in Jan, the RICS survey found. Although the index signalled a decline in demand, this was the least negative value since July 2022. (RTT)

China: Inflation rises 1.0% on year in Feb. Consumer prices in China were up 1.0% on year in Feb, the National Bureau of Statistics said. That was shy of expectations for an increase of 1.9% and down sharply from the 2.1% gain in Jan. On a monthly basis, consumer prices slumped 0.5% versus forecasts for an increase of 0.2% after climbing 0.8% in the previous month. The bureau also said that producer prices dropped 1.4% on year versus expectations for a decline of 1.3% after sinking 0.8% a month earlier. (RTT)

Japan: Household spending climbs 2.7% in Jan. The average of household spending in Japan was up a seasonally adjusted 2.7% on month in Jan, the Ministry of Internal Affairs and Communications said coming in at JPY301,646. That exceeded expectations for an increase of 1.4% following the 2.1% contraction in Dec. On a yearly basis, household spending slipped 0.3%, missing forecasts for a drop of 0.1% following the 1.3% decline in the previous month. The average of monthly income per household stood at JPY495,706, down 1.7% on previous year. (RTT)

Japan: Machine tool orders plunge 10.7% on weak domestic, foreign demand. Japan's machine tool orders declined sharply for the second straight month in Feb amid lower demand both domestically and internationally, preliminary data from the Japan Machine Tool Builders Association, or JMTBA, showed. Machine tool orders declined 10.7% YoY in Feb, which was worse than the 9.7 fall in the previous month. Domestic demand was 20.3% lower in Feb compared to last year, and foreign orders contracted 5.5%. (RTT)

Indonesian: Retailers expect sales to rebound strongly. Indonesia's retail sales declined for the first time in fifteen months in Jan, but retailers expected sales to recover sharply in Feb amid continued strong expansion in sales of food, beverages and tobacco group, and clothing, the results of a survey by Bank Indonesia showed. Retail sales dropped 0.6% YoY in Jan, reversing a 0.7% gain in the previous month. This was the first decline since Oct 2021. (RTT)

Philippine: Industrial output growth strongest in 10 months, jobless rate rises. Philippine industrial production continued to expand strongly at the start of the year, and at the fastest pace since March 2022, preliminary data from the Philippine Statistical Authority showed. Separate office data revealed that the jobless rate dropped for the second straight month in Jan. The value of production in the manufacturing industries logged a double-digit annual growth of 15.4% in Jan, much faster than the revised 9.5% gain in Dec. Production has been rising since April 2021. (RTT)

Markets

Able Global (Outperform, TP: RM1.55) : To sell Kuala Langat land for RM18m in RPT deal. Able Global through its 70%-owned subsidiary Able Development SB (ADSB) plans to sell its 23.5 acre land in Kuala Langat, Selangor, for RM18.5m. ADSB being the vendor of the deal, had entered into a sale and purchase agreement with the purchaser Able Perfect SB (APSB). The transaction is deemed to be a related party transaction (RPT) as Ng Keng Hoe, also known as Huang Qinghe, is the director of ADSB, as well as the director and major shareholder of APSB with a 40% stake. (The Edge)

Sapura Energy (Neutral, TP: RM0.05) : Gets new orders for proposed debt restructuring . Sapura Energy and 22 of its wholly owned subsidiaries have acquired extensions of their convening and restraining orders from the court to summon meetings of each of their respective scheme creditors. The group also obtained a restraining order from legal actions or proceedings for three months from 11 Mar. The previous orders were effective for precisely one year, granted by the court on 10 Mar 2022 and will expire on the same date this year. (StarBiz)

E.A. Technique: To sell vessel for RM23.5m. E.A. Technique has entered into a memorandum of agreement (MOA) to dispose of a marine vessel, Nautica Muar (NMR) to Alpha Metallum DMCC for USD5.2m or RM23.5m. The disposal consideration was derived after taking into consideration the market value of NMR as well as the audited net book value of RM19.89m as at 31 Dec. (StarBiz)

Nexgram Holding: Aborts plan to acquire resort in Langkawi. Nexgram Holding is aborting its plan to acquire a resort in Langkawi for RM90m to be used as a healthcare service facility. This comes after Nexgram and the vendors were unable to satisfy certain conditions precedent in the sale and purchase agreement. Nexgram had signed the agreement in Sep last year to acquire the 218-room Wings By Croske Resort Langkawi from Croske Hotels SB and Flyboys Club SB via the issuance of convertible preference shares. (The Edge)

Toyo Ventures: Bags maintenance contract in Vietnam. T oyo Ventures has secured a contract to perform maintenance works for the Song Hau 2 Thermal Power Plant in Vietnam, for an annual sum of USD86m (RM389m). The agreement was entered into by its wholly-owned subsidiary Song Hau 2 Power Co Ltd, with Power Engineering Consulting Joint Stock Co 2. (StarBiz)

LKL International: Inks MOU to sell Singapore firm's digital healthcare products in Malaysia. LKL International has entered into a deal to promote and sell Singapore-based Serv Medical Pte Ltd's medical products and services in Malaysia. Serv Medical provides digital healthcare solutions to improve medical workflow efficiency and quality of care while allowing healthcare and industry professionals, as well as government, to seamlessly extract insights from data pools in Singapore. (The Edge)

Oriental Interest: To jointly develop mixed project with RM2.15bn GDV. Oriental Interest wholly-owned subsidiary, OIB Properties (KV) SB (OIBKV) and Kedah State Development Corporation (PKNK) have agreed to jointly develop a 484.1 hectare land in Kuala Muda into a mixed development project comprising commercial and residential buildings with a gross development value (GDV) of RM2.15bn. (The Edge)

Market Update

The FBM KLCI might open lower today after investors sold off US equities and piled into Treasuries as they were rattled by concerns about the value of US banks’ bond portfolios, while preparing for a report on payrolls that will affect Federal Reserve policy. The blue chip S&P 500 stock index closed down 1.8% on Thursday and the tech-heavy Nasdaq Composite fell 2.1%. Both indices recorded their biggest declines since February 21. The S&P 500’s financial sub-index dropped by 3.9% on worries about the value of banks’ holdings of Treasuries and other debt instruments. Data released on Thursday showed that US initial jobless claims rose to 211,000 last week, above expectations of 192,000 and the largest increase since October. It was the first time in eight weeks that jobless claims came in above 200,000. European stocks struggled to make headway as investors digested the data. The region-wide Stoxx 600 closed down 0.2%, the German Dax was flat and the French CAC 40 lost 0.1%. London’s FTSE 100 closed 0.6% lower as mining stocks fell on fears that a stronger dollar would curb profits.

Back home, Bursa Malaysia closed on a softer note despite Bank Negara Malaysia’s (BNM) decision to retain the overnight policy rate (OPR) on Thursday (March 9), as investors remained wary of interest rate hikes in the US and risk of a recession on the global scale. At the closing bell, the benchmark FBM KLCI had slipped 5.13 points to 1,449.53, from Wednesday's closing at 1,454.66. In the region, China’s CSI 300 dropped 0.4% after weaker than expected Chinese inflation data. Consumer prices rose 1% and producer prices were down 1.4%— its lowest reading since November 2020. Hong Kong’s Hang Seng fell 0.6% on fears that the equity market rally in China-related stocks after the country lifted its zero-Covid policy was waning.

Source: PublicInvest Research - 10 Mar 2023