Economy

US: Regulators say banking system 'sound and resilient'. The multi-regulator US Financial Stability Oversight Council agreed on March 24 that the US banking system remains "sound and resilient" despite stress on some institutions, the US Treasury said in its latest statement to calm jittery markets and bank depositors. In a readout of a closed meeting chaired by Treasury Secretary Janet Yellen, the department said that FSOC participants heard a presentation on market developments from the staff of the Federal Reserve Bank of New York. (Reuters)

US: Durable goods orders unexpectedly slump 1.0% in Feb . Reflecting a continued slump in orders for transportation equipment, the Commerce Department released a report showing an unexpected decrease in new orders for US manufactured durable goods in the month of Feb. The Commerce Department said durable goods orders slid by 1.0% in Feb after plummeting by a revised 5.0% in Jan. Economists had expected durable goods orders to increase by 0.6% compared to the 4.5% plunge that had been reported for the previous month. (RTT)

EU: Eurozone services activity lifts private sector growth to 10- month high . Eurozone private sector logged the strongest growth in ten months in March underpinned by the robust expansion in services activity though the manufacturing sector remained stuck in the contraction zone. The flash composite output index rose more than-expected to 54.1 in March from 52.0 in Feb, survey results from S&P Global showed. The expected score was 51.9. Powered by the service sector, the private sector expanded for the third successive month in March. (RTT)

UK: Consumer sentiment climbs to 1-year high – GfK . UK consumer sentiment improved further in March to its highest level in a year as Britons assessment of the economy and their willingness to make big purchases strengthened, survey results from the market research group GfK showed. The consumer confidence index rose to -36 in March from -38 in Feb. That was in-line with economists' forecast. A reading below zero indicates pessimism among consumers who continued to have concerns about their personal financial situation. (RTT)

China: IMF chief urges China to rebalance economy toward consumption . The head of the IMF struck a positive note on China’s outlook, describing it as one of the “green shoots” in the world economy and urging authorities to rebalance the economy toward consumption. IMF managing director Kristalina Georgieva said the “strong rebound” in the China economy is important not only for itself, but for the world. (Bloomberg)

Japan: Consumer inflation off 41-year high but cost pressure persists . Japan's core consumer inflation slowed in Feb, but an index stripping away energy costs hit a four-decade high, data showed on March 24, suggesting that cost-push pressures may persist longer than policymakers thought. With inflation still exceeding the Bank of Japan's (BOJ) 2% target, the data will keep alive market expectations of a tweak to its bond yield control policy under incoming governor Kazuo Ueda, analysts have said. (Reuters)

Taiwan: Jobless rate rises slightly to 3.53%. Taiwan's unemployment rate increased for the first time in seven months in Feb, though marginally, the Directorate General of Budget Accounting & Statistics showed. The jobless rate rose marginally to an unadjusted 3.53% in Feb from 3.50% in the previous month. This was the highest unemployment rate in four months. (RTT)

Markets

Swift Haulage: Ups stake in warehouse service provider for RM19m. Swift Haulage has increased its stake in Global Vision Logistics SB (GVLSB) after it acquired a 17.5% stake in the latter for a total purchase consideration of RM19.2m, bringing the group’s ownership in the warehouse service provider to 42.5%. The 17.5% stake comprises 437,500 ordinary shares and 1.31m preference shares of GVLSB. GVLSB is the leaseholder of a land measuring 70.9 acres and currently in the process of developing 6m sqft of warehouse space, which will be done in phases. (The Edge)

Konsortium Transnasional: Bags RM153m construction job for PR1MA housing in Pahang. Konsortium Transnasional has secured a RM153.1m contract to provide labour and materials for the construction of a Perumahan Rakyat 1Malaysia (PR1MA) housing project in Pahang. The relevant works for the housing project are expected to take place between July 2023 and June 2026. The project is located on government land, measuring about 100.7 acres. (The Edge)

DNeX: Enters agreement with Ajlan & Bros to establish JV company in Saudi Arabia. Dagang NeXchange (DNeX) has entered into an agreement with Saudi-based Ajlan & Bros Holding Group to establish a joint-venture company (JVCo) in the Kingdom of Saudi Arabia. DNeX said the JVCo is poised to undertake the business of system integration in smart cities and large enterprise projects in the Middle East and North Africa, as well as projects of Ajlan and its subsidiaries. (The Edge)

MAHB: Records higher passenger movements in Feb despite shorter month. Malaysia Airports Holdings Bhd (MAHB) registered 8.3m total passenger movements in Feb. Total passenger movements at MAHB’s network of airports continued to be buoyant and recorded higher daily average passengers of 1,400 last month despite it being a shorter month compared to Jan. This was driven by the school holidays in Malaysia and also the increased flight frequencies by airlines in Türkiye. (StarBiz)

Salcon: Unit Nusantara Megajuta and Exsim Kebun Teh in JV land development. Salcon's indirect subsidiary Nusantara Megajuta SB (NMSB) entered into a joint venture (JV) agreement with Exsim Kebun Teh SB (ETKSB) for the development of two pieces of land in Johor Bahru. The JV will undertake a multiple phased mixed-use development consisting of service apartments and retail units on two pieces of 99 years’ leasehold land owned by NMSB. (StarBiz)

Careplus: Succeeds in striking out Petrolife’s RM27m suit. Careplus Group has succeeded in striking out Petrolife Aero SB’s RM27.1m suit against it over an alleged breach of a liquefied natural gas (LNG) supply agreement. The High Court had allowed its wholly owned Rubbercare Protection Products SB's (RPP) application to strike out Petrolife’s suit, with RM5,000 costs to be paid to RPP. (The Edge)

Astino: Expects product demand to stay moderate after posting 72.7% YoY decline in 2Q net profit. Astino, which saw its latest net profit plummet 72.7% YoY, warned that demand for its products will remain moderate as it expects to be hit by multiple headwinds. The group posted a net profit of RM2.95m in the 2QFY23, the lowest since the 1QFY19, dragged by lower profit margin due to the higher cost of materials. (The Edge)

Market Update

US markets ended higher last Friday amid further concerns over the health of global banks after Deutsche Bank’s credit default swaps jumped without any apparent reason. European Central Bank (ECB) President Christine Lagarde tried to ease concerns, saying Eurozone banks are resilient, with strong capital and ample liquidity. Separately, it was also noted that outflow of funds from smaller banks into larger banks in the US has slowed, the last count at USD100bn. On the day, the Dow Jones Industrial Average and S&P 500 inched 0.4% and 0.6% higher as the Nasdaq Composite gained 0.3%. European markets ended lower however, spooked by banking-related tensions. Further to assuaging concerns on banks’ capital and liquidity positions, Lagarde also said the ECB’s toolkit was equipped to provide liquidity to the financial system if needed. Regardless, Germany’s DAX and France’s CAC 40 both slumped 1.7% as UK’s FTSE 100 fell 1.3%. Asian markets were mostly lower even as investors contemplated on comments by US Treasury Secretary Janet Yellen on the use of federal emergency aid to support failed regional banks again if necessary, who just a day before said the government wasn’t planning on guaranteeing deposits without congressional approval. The Hang Seng and Shanghai Composite indices fell 0.7% and 0.6%. Data on the day showed Japan’s core inflation easing off for the first time in 14 months. The Nikkei 225 slipped 0.1%.

Source: PublicInvest Research - 27 Mar 2023