Economy

US: Fed is still expected to go through with rate hikes. When the Fed starts to raise interest rates, it generally keeps doing so  until something breaks, or so goes the collective Wall Street wisdom. So with the second and third largest bank failures ever in the books happening just over the past few days, and worries of more to come, that would seem to qualify as significant breakage and reason for the central bank to back off. (CNBC)

EU: Ireland construction sector moves closer to stabilization. Ireland's construction sector moved closer to stabilization in Feb as new orders registered its first upturn since last March and employment posted a strong growth. The headline BNP Paribas Real Estate Ireland Construction Purchasing Managers' Index rose to 49.8 in Feb from 47.7 in Jan. However, the reading has remained below the neutral 50.0 mark for the fifth successive month suggesting contraction in the construction sector. The survey showed decreases in both housing and civil engineering activity in Feb. (RTT)

EU: Greece inflation slowest since 2021. Greece CPI rose at the weakest pace in more than a year in Feb. The CPI advanced 6.1% annually after rising 7.0% in Jan. Inflation has slowed for the fifth successive month. Moreover, this was the weakest rate since Dec 2021, when prices were up 5.1%. On a monthly basis, CPI gained 0.3%, reversing Jan's 0.5% drop. The major contributors for the annual price increases were food and non-alcoholic beverages, clothing and footwear, household equipment, transport and healthcare. Meanwhile, prices of housing and communication declined from the last year. (RTT)

EU: Bond yields plunge as SVB collapse scares investors. Euro zone government bond yields tumbled as the collapse of Silicon Valley Bank (SVB) sent investors rushing into safe-haven assets and caused traders to bet on a smaller rate hike from the ECB. US authorities launched emergency measures to shore up confidence in the banking system after the failure of SVB threatened to trigger a broader financial crisis. (Reuters)

UK: Taxes are at a 70-year high, but its finance minister won’t splash the cash at upcoming budget. British Finance Minister Jeremy Hunt will deliver the government’s Budget commitments against a better-than-expected economic backdrop. Hunt delivered a GBP55bn (USD66bn) package of tax rises and spending cuts in a bid to plug a substantial hole in the country’s public finances and restore its fiscal credibility. (CNBC)

South Korea: Import prices fall in Feb for first time in two years. South Korea's import prices for Feb fell in annual terms for the first time in two years on weaker oil prices. The country's import price index, in terms of the local won currency, stood 0.5% lower in Feb than in the same month a year earlier, after a 1.9% rise in Jan, according to the Bank of Korea (BOK). It was the first annual decline since Feb 2021 and the biggest percentage fall in 25 months. (Reuters)

Japan: Large manufacturers' confidence weakens sharply in Q1. Japan large manufacturers' sentiment posted a sharp deterioration in the first quarter. The business survey index of large manufacturers fell to -10.5 in the March quarter from -3.6 in the preceding period. The score is forecast to improve markedly to -0.7 in the 2QFY22. At the same time, the BSI for large non manufacturers slid to +0.6 from +2.7 in the prior period. However, the index is expected to improve to +1.4 in the coming quarter. Consequently, the BSI for overall large manufacturers dropped to - 3.0 from +0.7 in the 4QFY22. (RTT)

Markets

Sunway REIT: In talks to buy retail assets from EPF, to ink agreement 'as soon as possible'. The manager of Sunway REIT has confirmed that it is in talks to buy retail assets from EPF, saying negotiation of terms are still in progress. While it cannot confirm the terms of the agreement as talks are still ongoing, the REIT said in a filing on Monday that it expects to — subject to agreement of terms and the board's final approval — enter into an agreement with the EPF "as soon as possible but we are unable to confirm the timing at this juncture due to ongoing negotiations. (The Edge)

Fitters Diversified: Justifies acquisition of 12.14m Computer Forms shares, optimistic about EV growth. Fitters Diversified has justified its acquisition of 12.14m shares in Computer Forms (M) due to the latter’s involvement in the electric vehicle (EV) industryThe group rationalised the acquisition of Computer Forms after CFM’s joint venture agreement with EA Mobility Holding Co Ltd on Feb 5 to sell, distribute, assemble and produce EVs in Malaysia. Fitters is optimistic that the government's initiatives to promote next-generation vehicles in the country will stimulate the demand for electric vehicles, and the company anticipates CFM will be benefiting from this trend. (The Edge)

Pimpinan Ehsan: Expands regularisation plan to acquire additional RE asset for RM13.9m. Pimpinan Ehsan has added to its regularisation plan by entering into a third supplemental agreement in relation to the proposed acquisition of reNIKOLA Holdings SB and its subsidiaries, to include the purchase of an additional renewable energy (RE) asset for RM13.9m. The proposed acquisition of Idiwan Solar, which operates a solar photovoltaic power generation project in Machang, Kelantan has an aggregate capacity of approximately 45MWdc and achieved initial operation in Jan 2023. (The Edge)

Perdana Petroleum: Bags three charter contracts from major shareholder Dayang Enterprise. Perdana Petroleum has secured three charter contracts from its major shareholder Dayang Enterprise Holdings. Perdana Petroleum accepted three LOA dated Jan 16 from Dayang Enterprise SB. The three LOAs entail the charter of one unit accommodation work barge and two units anchor handling tug & supply vessels, valued at approximately RM18.3m. (The Edge)

Revenue Group: Board sees five new additions. After three of its directors left just over a week ago, Revenue Group announced the appointment of five new directors to its board, as well as a new chief financial officer, effective March 13. It has appointed Teh Chee Hoe as executive director, and four independent, non-executive directors, namely: Kamari Zaman Juhari, Azman Hisham Che Doi, Chandera Sekaran @ Dawson, and Krishnan Dorairaju. Ng Kuan Horng was named as its new CFO. (The Edge)

Classita: Shareholders take legal action to represent company in select legal matters. Five shareholders of Classita Holdings are seeking the court's permission for them to take legal actions on behalf of the lingerie maker against its board members and vendor. They intend to initiate legal action on behalf of Classita against the company’s board as well as a vendor for breach of fiduciary duties, fraud, unjust enrichment and/or conspiracy to injure the company in relation to its acquisition of shares in Kepayang Heights SB and other related transactions. (The Edge)

Market Update

The FBM KLCI might open lower today after US bank stocks dropped and traders raced into government bonds on Monday after regulators moved to prevent the collapse of Silicon Valley Bank from spreading into the wider economy. The KBW Nasdaq Bank Index fell 11.7% on Monday in the US, with regional banks plummeting the most as investors worried smaller lenders could have fragile balance sheets. First Republic Bank fell 61.8%, Western Alliance Bancorp lost 47.1%, and KeyCorp dropped 27.3%. The declines in some of the biggest bank shares pushed benchmark indices in Europe lower, with the Stoxx 600 closing down 2.4%. The European Stoxx banking index dropped 5.8% as investors worried about the value of banks’ bond portfolios. However, broader US markets were more assured, with the blue chip S&P 500 losing 0.2% and the tech-heavy Nasdaq Composite gaining 0.5%. London’s FTSE 100 fell 2.6% after the UK government confirmed that the UK unit of SVB would be sold to HSBC. The CAC 40 in Paris fell 2.9%.

Back home, Bursa Malaysia closed lower amid mixed sentiment in regional bourses following a heavy global selldown. At the closing bell, the benchmark FBM KLCI fell 11.25 points or 0.79% to 1,421.83 from last Friday's close of 1,433.08. Equities in the region were mixed. Japan’s Topix lost 1.5% while Hong Kong’s Hang Seng index rose 2% and mainland China’s CSI 300 rose 1.1% on Monday. Shanghai Pudong Development Bank, which owns a stake in a joint venture with Silicon Valley Bank’s China unit, lost 1.3%.

Source: PublicInvest Research - 14 Mar 2023