Economy

US: Government steps in and says people with money deposited at SVB will be able to access their money. Banking regulators devised a plan Sunday to backstop depositors with money at Silicon Valley Bank (SVB), a critical step in stemming a feared panic over the collapsed tech-focused institution. Regulators said depositors at both failed SVB and Signature Bank in New York, which also has been closed, will have full access to their deposits. (CNBC)

US: Employment jumps more than expected, unemployment rate rebounds. A closely watched report released by the Labor Department showed employment in the US jumped by much more than expected in the month of Feb. Non-farm payroll employment shot up by 311,000 jobs in Feb after spiking by a revised 504,000 jobs in Jan. Economists had expected employment to increase by 205,000 jobs compared to the surge of 517,000 jobs originally reported for the previous month. (RTT)

EU: Spain retail sales expand most in 20 months. Spain's retail sales rose for the second straight month in Jan, and at the fastest pace in 20 months, underpinned by a sharp increase in non-food product turnover. Retail sales posted an annual growth of 5.5% in Jan, after a 4.8% rebound in the previous month. Further, this was the strongest rate of growth since May 2021, when sales had surged 19.5%. Non-food product sales alone surged 15.0% yearly in Jan, while those of food products dropped 1.7%. (RTT)

EU: Italy PPI at 19-month low on lower energy costs. Italy's PPI eased at the start of the year to the lowest level in just over 1.5 years amid a sharp slowdown in energy prices. The PPI climbed 11.1% YoY in Jan, much slower than the 31.7% rise in Dec. Further, this was the slowest inflation rate since June 2021, when prices had risen 9.1%. (RTT)

EU: German inflation stable at 8.7% as estimated. Germany's CPI held steady in Feb, as initially estimated. The CPI climbed 8.7% YoY in Feb, the same increase as in Jan. That was in line with the flash data published on 1 March. In Feb, a slowdown in energy prices was offset by an acceleration in the price growth of food items. Excluding energy and food, the inflation rate in Feb was 5.7%. The annual price growth in energy eased to 19.1% in Feb from 23.1% in the prior month. (RTT)

UK: Economy rebounds with stronger-than-expected Jan GDP print. The UK economy grew by 0.3% in Jan, exceeding expectations as it continues to fend off what economists see as an inevitable recession. Economists had projected a 0.1% monthly increase in GDP. GDP was flat over the three months to the end of Jan. Production output fell by 0.3% in Jan after growing 0.3% in Dec, while the construction sector dropped 1.7% in Jan after flat lining the previous month. (CNBC)

Japan: BoJ leaves policy stance unchanged at kuroda's final meeting. BoJ left its ultra-loose monetary policy stance unchanged in the final meeting led by Governor Haruhiko Kuroda, thus passing the baton to Kazuo Ueda who was just confirmed by the Japanese Parliament Diet as his successor. The decision was in line with economists' view as policymakers were widely expected to maintain status quo in the last meeting of Kuroda's decade-long term that ends on 8 April. (RTT)

New Zealand: Food prices skyrocket in Feb. Food prices in New Zealand surged 12.0% YoY in Feb, accelerating from the 10.3% annual increase in Jan. Individually, grocery food prices increased 12% YoY, while fruit and vegetables prices increased 23%, restaurant meals and ready-to-eat food prices increased 8.4%, meat, poultry and fish prices increased 9.8% and non-alcoholic beverage prices increased by 9.1%. (RTT)

India: Industrial production growth improves to 5.2%. India's industrial output expanded for the third straight month in Jan and at a faster-than-expected pace, underpinned by broad-based growth across all sectors. Industrial production advanced 5.20% YoY in Jan, after a revised 4.68% rise in Dec. (RTT)

Markets

Kumpulan Perangsang Selangor (Neutral, TP: RM0.74): Inks MOU with consortium on solar energy. Kumpulan Perangsang Selangor (KPS) has entered into a MOU to explore the possibility of procuring solar energy from a consortium comprising Worldwide Holdings and two other firms. The parties will look into signing a long-term corporate green power agreement between KPS and its participating subsidiaries as the off-taker and the consortium via a SPV as the provider. The consortium shall, upon the success of the application, engage and utilise the SPV for the development, construction and operation of a solar project in Malaysia. (The Edge)

Nexgram: To acquire property management rights in Langkawi for RM22.5m. A day after Nexgram Holdings aborted its deal to buy Wings By Croske Resort Langkawi SB (WINGS) for RM90m, it wants to acquire the management rights of a piece of land in Langkawi, Kedah, from the resort operator for RM22.5m instead. The acquisition will be satisfied via the issuance of 250,000 RCPS at an issue price of RM90 per RCPS to WINGS. (The Edge)

Betamek: Signs MOU to look into developing battery management system for EVs. Betamek has inked a deal to expand its vehicle electronic product offerings. The MOU entered into with Singapore-based semiconductor company Krakatoa Technologies Pte Ltd is aimed at exploring potential collaboration to develop a battery management system-on-a-chip for electric vehicles. The MOU is expected to enhance Betamek’s vehicle electronics product offerings and expand its customer base in the near future. (The Edge)

TWL: Shareholders approve RM111.3m rights issue to fund development projects. TWL Holdings’s shareholders on March 10 approved the proposed renounceable rights issue of up to RM111.3m nominal value of 5.6bn 5-year RCULS with up to 1.1bn free detachable Warrants E. The fund raised from this issuance would be mainly used to undertake 3 affordable housing development projects under the Rumah Selangorku scheme. (The Edge)

LTKM: Controlling shareholders to pay more to privatise chicken egg businesses under revised RTO deal. The first adjustment is an upward revised in the valuation of the six existing businesses, which will result in the disposal consideration rising to RM222m from RM158.83m. Despite the higher valuation, LTKM has decided to lower the special dividend and capital repayment rate to 90 sen per share or RM128.8m in total. The remaining RM93.2m from the disposal consideration will be utilised to fund RM336m acquisition of Local Assembly SB. (The Edge)

Pecca Group: Inks shares transfer agreement to acquire 80% stake in PT Gemilang Maju. Pecca Group has entered into a shares transfer agreement with various parties to acquire 80% stakes in PT Gemilang Maju Kencana (GMK) for Rp6.4bn. PLSB would inject Rp2.4bn. The agreement was signed between PLSB, PT Multi Berjaya Asindo, CSC Automotive SB and Tan Kim Cheang. This acquisition represents a significant opportunity for the company to penetrate and establish themselves in the Indonesian market. (BTimes)

Market Update

The FBM KLCI might open lower today after US Treasuries rallied and yields tumbled on Friday as investors sought safety amid a sell off in bank stocks, and a mixed labour market report allayed fears the Federal Reserve would raise interest rates by half a percentage point at its meeting later this month. Bond prices rose, sending yields on benchmark 10-year Treasury notes down 0.23 percentage points to 3.68% — their lowest in almost a month and a sharp reversal from having traded above 4% earlier in the week. The yield on the two-year note, which is more sensitive to interest rates, fell 0.32 percentage points to 4.58%. Stocks on Wall Street declined for a second day in volatile trading, dragged down by broad losses for banks’ shares following fears that the failure of tech-focused Silicon Valley Bank, which was put into receivership on Friday, could be a sign of broader woes in the sector. The S&P closed down 1.5%, taking its losses for the week to 4.5%, the worst week in almost six months. The tech-heavy Nasdaq Composite ceded 1.8% on the day and 4.7% lower for the week — the poorest week since early November. The region-wide Stoxx 600 closed down 1.4%, hit by falls in bank stocks such as Deutsche Bank and Société Générale. The Stoxx bank index lost 3.8%. London’s bank-heavy FTSE 100 ended down 1.7%.

Back home, Bursa Malaysia ended at its intraday low on Friday, in tandem with the heavy selldown on most regional and global bourses. At the closing bell, the benchmark FBM KLCI had slipped by 16.45 points or 1.13% to 1,433.08, from Thursday's closing at 1,449.53. In the region, Hong Kong’s Hang Seng index was down 3%, China’s CSI 300 shed 1.3%, South Korea’s Kospi declined 1% and Japan’s Topix lost 1.9%.

Source: PublicInvest Research - 13 Mar 2023