Economy

US: Weekly jobless claims drop; revisions suggest labor market looser. The number of Americans filing new claims for unemployment benefits fell last week, but annual revisions to the data showed applications were higher this year than initially thought, further evidence that the labor market was slowing. Initial claims for state unemployment benefits dropped 18,000 to a seasonally adjusted 228,000 for the week ended 1 Apr. (Reuters)

EU: German industrial output rises more than expected in Feb. German industrial production rose significantly more than expected in Feb due in part to vehicle manufacturing, increasing 2.0% on the previous month. In a Reuters poll, analysts had pointed to a slight increase of 0.1%. The statistics office also revised the figure for Jan to a 3.7% increase, up from 3.5%. With the revision, the adjusted index of production since Dec 2022 rose by 5.8%, which more than compensated for the significant decline of 2.4% in Dec. YoY, industrial production rose 0.6% in Feb. (Reuters)

EU: German construction activity falls most in 3 months. Germany's construction sector logged its steepest contraction this year so far, as output and new orders fell at faster rates along with a downbeat outlook. The construction PMI dropped to 42.9 in Mar from 48.6 in the previous month. Housing activity was the weakest performing category among the broad construction categories covered by the survey. The rate of decline was among the fastest seen since the global financial crisis. (Reuters)

EU: Sweden GDP contracts 1.0%; industrial output growth improves. Sweden's economy contracted in Feb after growing for the first time in four months amid an ongoing decrease in household consumption, data from Statistics Sweden showed on Thursday. Separate official data showed that industrial production advanced for the third straight month in Feb, and at a faster pace. GDP fell 1.0% monthly in Feb, reversing a revised 2.2% expansion in Jan. RTT)

UK: House-building falls by most since 2020 as interest rates bite. British house-building fell at the sharpest pace since May 2020 last month as the cost of higher interest rates outweighed an easing in supply chain difficulties that bolstered other types of construction. The S&P Global/CIPS construction PMI fell to 50.7 in Mar after jumping to 54.6 in Feb, a bigger drop than the fall to 53.5 forecast poll of economists. (Reuters)

China: Mar services activity accelerates on new orders. China's services activity in Mar revived up at the quickest pace in 2-1/2 years on robust new orders and job creation and a consumption-led post-COVID recovery. The Caixin/S&P Global services PMI rose to 57.8 in Mar from 55.0 in Feb, the third consecutive monthly expansion after the government dropped stringent anti-virus curbs late last year. It was the highest reading since Nov 2020.. (Reuters)

India: Pauses rate hikes in surprise decision, but door open for more. The RBI surprised markets by holding its key repo rate steady after six consecutive hikes, saying it was closely monitoring the impact of recent global financial turbulence on the economy. The central bank said its policy stance remains focused on "withdrawal of accommodation", signalling it could consider further rate hikes if necessary, but a number of economists now expect the central bank to remain on hold. (Reuters)

Markets

Litrak: Proposes capital reduction and repayment involving RM275m cash distribution . Lingkaran Trans Kota Holdings (Litrak) has proposed to undertake a capital reduction and repayment involving a cash distribution of RM275.8m on a pro-rata basis to entitled shareholders on a date to be determined later. The cash distribution may range from 50.2 sen to 50.91 sen, depending on Litrak’s share base on the entitlement date. (The Edge)

MN Holdings: Bags RM13.3m underground utilities contract in Johor . MN Holdings has secured an underground utilities contract worth RM13.3m in Johor. The group said its wholly-owned subsidiary Mutu Nusantara SB has accepted a letter of award from Rentak Segar SB, appointing it to be the subcontractor to supply and install high-voltage underground cable works for two data centres in Johor. (The Edge)

ITMAX: Gets RM52.81m contract extension from DBKL. ITMAX System has secured a three-year extension for the installation and maintenance of networked street lighting systems in Kuala Lumpur from Kuala Lumpur City Hall (DBKL). The public space networked systems provider said it received a letter of a contract extension from DBKL valued at about RM52.81m. The contract extension is for a period of three years from Aug 1, 2023 to July 31, 2026. (StarBiz)

HB Global: Acquires KK Fresh for RM30m . HB Global Ltd (HBGL) is acquiring frozen meat and poultry products trader KK Fresh Frozen SB for RM30m. HBGL said it had entered into a conditional share sale agreement with KK Fresh’s managing director and shareholder, Tan Hwa Sing, for the acquisition. “The proposed acquisition represents a strategic move by the group as it will be able to leverage on KK Fresh’s existing business to increase the range of products of the group. (StarBiz)

Citaglobal, Genetec: Form JV to manufacture battery energy storage systems . Citaglobal and Genetec Technology have formed a JV company to manufacture battery energy storage systems (BESS) and explore opportunities for the business in Malaysia and the Asean region. Citaglobal said the 50:50 JV company, Citaglobal Genetec BESS SB (CG BESS), will develop, design and build integrated manufacturing facilities for BESS. It will also develop integrated solutions, facilitate sharing of related technologies and know-how for the development of the system, and own the related intellectual property and trademark. Citaglobal will be responsible to scout for Asean and Malaysian business opportunities and demand for the system, and to obtain necessary approvals and support to undertake any venture. (The Edge)

Jentayu: Closes Ohana Specialist Hospital until further notice after revocation of licence . Jentayu Sustainables said its Ohana Specialist Hospital in Setapak is closed until further notice after the revocation of its licence due to non-compliance with mandated operating procedures. Jentayu said Ohana Specialist, which was operated by its wholly-owned subsidiary Ultimate Forte SB, was served the notice on Wed. (The Edge)

Hektar REIT: Renewed 25% of leases by NLA expiring in 2023 . Hektar REIT has renewed 25% of its leases ahead of their expiration this year, covering 234,000 sq ft of its total 2.05m sq ft of retail space as of end-March. In total, there are 213 tenancies covering 962,565 sq ft expiring in 2023, representing 47.1% of the trust’s total net lettable area (NLA). (The Edge)

Market Update

The FBM KLCI might open higher today after Wall Street advanced on Thursday, led by tech stocks, as investors struggled to position themselves ahead of the release of the closely watched non-farm payrolls report on a public holiday. The benchmark S&P 500 recovered from an earlier decline to close up 0.4% with tech and utilities tempering falls for energy, basic materials and consumer cyclical industries. The technology-heavy Nasdaq Composite, which is up more than 15% year to date, added 0.8%. Both indices had declined in the previous session. Europe’s region-wide Stoxx 600 added 0.5% and Germany’s Dax rose 0.5% as industrial production in the Eurozone’s biggest economy advanced 2% month on month in February. This followed a revised 3.7% jump in January — well above the 0.1% increase forecast by economists. London’s FTSE 100 gained 1%.

Back home, Bursa Malaysia closed marginally lower for the third consecutive day on Thursday, dragged by persistent selling across the board due to rising concerns over the global market outlook. At the closing bell, the FBM KLCI had declined by 4.66 points or 0.33% to 1,424.89, from Wednesday's closing at 1,429.55. Elsehwere, Japan’s Topix lost 0.9 %, Hong Kong’s Hang Seng index closed 0.3% higher and China’s CSI 300 fell 0.1%.

Source: PublicInvest Research - 7 Apr 2023