Economy

US: Yellen vows to safeguard deposits at smaller US banks, intervene if needed. US Treasury Secretary Janet Yellen told bankers that she is prepared to intervene to protect depositors in smaller US banks suffering deposit runs that threaten more contagion amid the worst financial system turmoil in more than a decade. In a speech aimed at calming nerves rattled by two prominent bank failures this month, Yellen said that the US banking system was stabilizing and steps taken to guarantee deposits in those institutions, showed a "resolute commitment" to ensure depositors' savings and banks remain safe. (Reuters)

US: Lower mortgage rates boost US home sales in Feb. US existing home sales rebounded more than expected in Feb as lower mortgage rates and the first YoY decrease in prices in 11 years pulled buyers back into the market, further evidence that the housing market was stabilizing at low levels. The jump in sales of previously owned homes, which was reported by the National Association of Realtors, was the largest in more than 2-1/2 years and ended 12 straight monthly declines in sales, the longest such stretch since 1999. (Reuters)

EU: Europe passenger car sales strengthen in Feb. European new passenger car registrations continued to strengthen in Feb albeit due to the low base of comparison given the semiconductor shortage crisis at the beginning of 2022, data from the Brussels based European Automobile Manufacturers' Association, or ACEA, showed. Passenger car sales increased 11.5% on a yearly basis to 802,763 units in Feb. This followed an 11.3% rise in Jan. (RTT)

EU: German ZEW Economic confidence declines sharply in March. German economic confidence declined sharply in March reflecting the turmoil in the global financial markets, a closely watched survey showed. The ZEW Indicator of Economic Sentiment declined to 13.0 in March from 28.1 in Feb, the Mannheim-based think tank said. The index dropped after five successive months of improvement.. (RTT)

EU: Germany considering China export restrictions, economy minister tells FAZ. Germany is considering export restrictions to China similar to those already in place in the US, Economy Minister Robert Habeck told the Frankfurter Allegemeine Zeitung newspaper. “We have to prevent losing our technology leadership because we don’t look closely,” he told the paper, adding: “Export controls shouldn’t exist everywhere, but in certain critical sectors, we should become stricter.(Reuters)

UK: Budget deficit widens on energy subsidies. The UK budget deficit increased more than expected to its highest Feb level due to huge spending on energy support schemes, the Office for National Statistics reported. Public sector net borrowing excluding banks increased by GBP9.7bn from the last year to GBP16.7bn in Feb. (RTT)

Hong Kong: Current account surplus shrinks to HKD63.8bn. Hong Kong's current account surplus decreased considerably in the final quarter of 2022. The current account surplus declined to HHD63.8bn in the Dec quarter from HKD117.1bn in the Sept quarter. The surplus also decreased from HKD82.8bn in the corresponding period last year. This implies that Hong Kong's savings were greater than its investment, enabling Hong Kong to accumulate external financial assets as a buffer against global financial volatilities, the agency said. (RTT)

Markets

Lotte Chemical Titan: Indonesian unit secures RM10.58bn loan to fund expansion project. Lotte Chemical Titan Holding (LCT), via its subsidiary, PT Lotte Chemical Indonesia (LCI), has entered into a 12-year USD2.4bn (RM10.58bn) term loan facility with The Export-Import BoK, Korea Trade Insurance Corporation and other commercial banks. In a statement with Bursa Malaysia today, LCT, the first stand-alone polyolefins producer in Malaysia, said the loan facility was to fund the development of its integrated petrochemical facility, the Lotte Chemical Indonesia New Ethylene project. (StarBiz)

Revenue: Group CEO Danny Leong resigns, asked to reconsider decision. Revenue Group has confirmed that Danny Leong Kah Chern will be stepping down as group CEO, just slightly over two months after having first accepted the position on 6 Jan, this year. However, the embattled company has asked Leong to reconsider his decision. The company added that it has taken swift actions to search for suitable replacements and has since appointed new executive and independent directors. (The Malaysian Reserve)

GDB: Lands RM247m contract to design and build logistic hub. GDB Holdings has secured a RM247m design-and-build contract to construct a logistic hub in the Bandar Bukit Raja 2 Industrial Park in Klang. Its unit Grand Dynamic Builders SB (GDBSB) had accepted a letter of award dated 19 Dec from SDPLOG 1 (Industrial Asset I) SB, a wholly owned subsidiary of SDPLOG 1 (MY Holdings) SB and established under the Sime Darby Property, LOGOS Property Industrial Development Fund 1 LP. (The Edge)

Scientex: Inks JV to build affordable homes in Indonesia. Scientex announced it had inked a joint venture with Indonesia’s Mustika Land and Japan’s Creed Group to make its maiden foray into building affordable homes in Indonesia. This comes shortly after the group's RM518.1m cash purchase of a 960 acre (388.5 ha) land in Tebrau, Johor from SP Setia was cancelled on 6 March, following its failure to obtain a waiver of the Bumiputera equity condition imposed by the Economic Planning Unit for the acquisition. The acquisition was to expand its landbank, and geared towards Scientex's goal to build 50,000 affordable homes throughout the nation by 2028. (The Edge)

Classita: Shareholders seek injunction to block EGM pending conclusion of lawsuit. Five shareholders of Classita Holdings, formerly known as Caely Holdings, are seeking an injunction to block the lingerie maker from convening an EGM on 27 March to vote on the group's proposed rights issue. The shareholders are attempting to stop the group from holding the EGM pending the disposal of their lawsuit in which they are seeking to take legal action on behalf of the group against its board members and a vendor. (The Edge)

SMG: Proposes first and final dividend of one sen for FY22. Star Media Group (SMG) is proposing a first and final single-tier dividend of one sen per ordinary share in respect of its financial year ended FY22. The proposal is subject to shareholders’ approval at the company’s forthcoming 51st AGM. SMG reported a 16% increase in revenue for FY22 to RM217m as a result of revenue focused initiatives by the management that led to the continuous improvement in its financial performance.

Market Update

Fears over the ongoing banking crisis in the US showed some signs of easing with benchmark indices closing higher for a second day running. The Dow Jones Industrial Average was up by almost 1% as the S&P 500 and Nasdaq Composite gained 1.3% and 1.6%. Investors widely expect the US Federal Reserve to hike interest rates later today (our time) at the end of its 2-day policy meeting, though only by 25bps, and to be accompanied by a relatively dovish tone that they could be close to the end. European markets were also higher with banking stocks leading the charge. Concerns remain however, with the European Central Bank indicating last week at its policy meeting that more rate hikes are to come. Germany’s DAX and UK’s FTSE 100 both gained 1.8% with France’s CAC 40 higher by 1.4%. Asian markets rose in positive reaction to the overnight gain on Wall Street. The Hang Seng and Shanghai Composite indices gained 1.5% and 0.6%. Markets in Japan were closed for a holiday. On a separate note, the International Monetary Fund has approved a USD3bn rescue package for Sri Lanka, helping the country restructure its debt and rehabilitate its economy.

Source: PublicInvest Research - 22 Mar 2023