Economy

Global: IMF trims global growth forecast, warns of fragility. The IMF slightly lowered the global growth forecast for this year and expects inflation to slow more slowly than anticipated earlier as the lender warned that the economic situation is fragile, citing the recent financial sector turmoil. The world economy is set to grow 2.8% this year after expanding 3.4% last year. In the Jan edition, the projection for this year was 2.9%. Global growth is forecast to rise to 3.0% next year, which was slightly less than the 3.1% predicted in Jan. (RTT)

US: Wholesale inventories inch up slightly less than expected in Feb. Wholesale inventories in the US edged slightly higher in the month of Feb. Wholesale inventories inched up by 0.1% in Feb after falling by 0.6% in Jan. Economist had expected inventories to rise by 0.2%. The uptick in inventories came as a 0.5% increase in inventories of durable goods was largely offset by a 0.5% decrease in inventories of non-durable goods. (RTT)

EU: Eurozone retail sales fall as expected. Eurozone retail sales declined as expected in Feb reflecting the weakness in food and non-food turnover. Retail sales fell 0.8% on month, offsetting Jan's 0.8% increase. The pace of decline matched economists' expectations. Food, drinks and tobacco sales dropped 0.6% and non-food product turnover eased 0.7%. And automotive fuel in specialized stores posted a monthly drop of 1.8%. (RTT)

China: Bank lending rises more than expected. China's bank lending grew more than expected in March signalling more investment. Banks extended CNY3.89trn in March from CNY1.81trn in Feb. This was well above economists' forecast of CNY3.23trn. Total social financing, increased to CNY5.38trn in March from CNY3.16trn in the previous month. This was also better than economists' forecast of CNY4.5trn. Further, data showed that broad money supply M2 grew 12.7% in March from the last year, as expected. (RTT)

China: Inflation weakest since late 2021; producer price deflation worsens. China's consumer prices grew at the slowest pace since Sep 2021 and producer prices declined the most in 33 months in March, providing some space for monetary policy manoeuver. Consumer prices gained 0.7% on a yearly basis in March, following an increase of 1.0% in Feb. Inflation was forecast to remain at 1.0%. Inflation remained well below Beijing's full year target of around 3.0%. Consumer price inflation will rebound in the coming months as the labour market tightens again and will peak at 2.3% in early next year. (RTT)

Japan: Machine tool orders plunge 15.2%. Japan's machine tool orders declined for the third straight month in March and at a faster pace amid lower demand both domestically and internationally. Machine tool orders plunged 15.2% YoY in March, which was worse than the 10.7 fall in the previous month. Domestic demand was 18.1% lower in March compared to last year, and foreign orders contracted 13.6%. (RTT)

Taiwan: Inflation eases further to 2.35%, trade surplus shrinks. Taiwan's CPI eased for the second straight month in March to the lowest level in four months. The trade surplus for the country decreased in March from last year amid a continued sharp fall in exports. Consumer prices rose 2.35% YoY in March, slower than the 2.43% increase in Feb. Economists had forecast inflation to drop to 2.22%. (RTT)

Markets

IJM (Outperform, TP: RM1.97): Outlines mitigation, adaptation measures under new climate strategy as it braces for global warming. IJM Corp has come up with a climate strategy outlining mitigation and adaptation measures it will take to face climate change, as the group said it is compelled to act now, with global warming expected to reach 1.5°C above pre-industrial levels by the early 2030s. To realise its net zero ambitions by 2050, it will focus on four key mitigation pillars across its own operations and value chain, namely: energy optimisation, supply chain advocacy, industry engagement and product stewardship. (The Edge)

Pelikan: Received several 'expressions of interests' in its assets, businesses. Pelikan International Corp clarified that it had received several "expressions of interest" related to the acquisition of its assets and businesses, but no definitive agreements had been finalised yet. The stationery maker was responding to an article that appeared in the 10 Apr issue of The Edge Malaysia weekly, which stated that Pelikan is looking to seal a divestment deal that could fetch some RM500m in cash. (The Edge)

Petronas Gas: Expects overall performance in 2023 to remain robust . Petronas Gas Bhd (PGB) expects its overall performance for 2023 to remain robust, underpinned by its long-term contracts which provide steady revenue. However, it noted that the volatility of foreign exchange and gas price movements may impact its profitability. PGB MD/CEO said the company remained well positioned to benefit from the constraints in the gas market as the world continues to contend with a global energy crunch due to the supply-demand disparity. (Bernama).

Citaglobal: Expects concrete news on ECRL pitch in next few months. Citaglobal expects more concrete news of its pitch through a consortium with Reneuco Bhd for ECRL power supply project in the next few months. The consortium is finalising the presentation and details with ECRL’s project owner, MRL. The pitch to be awarded exclusively to the consortium to ensure the security of power supply to the entire infrastructure, including for the accelerated demand that may arise from the development of industrial facilities along the line. (StarBiz).

Bintai Kinden: To work on an amicable solution following MBSB’s lawsuit on loan default . Bintai Kinden Corp is working towards reaching an amicable solution after the company was sued by MBSB Bank for allegedly defaulting on a RM109m Islamic financing facility. The facility was secured by Bintai Kinden's wholly owned subsidiary, Optimal Property Management SB(OPM), to finance the construction of an on-campus accommodation for Kolej Teknologi Islam Melaka Bhd. It is sourcing for the appropriate review and negotiation with the parties involved in the concession arrangement to reach amicable solutions to settle debts owing to MBSB. (The Edge)

Heng Huat: Acquires land for RM6.3m. Heng Huat Resources Group said its subsidiary HH Land and Development SB has acquired six parcels of land for a total consideration of RM6.3m cash. Of the acquisitions, five lots of land located in Penang measuring a combined 8,994 sqm were purchased from Ch'ng Chen Mong, while the Perak tract measuring 2.41ha was acquired from the group's 51%-owned subsidiary, MG Furniture SB. The acquisitions are in line with its intention to diversify into the property development business. (StarBiz)

Market Update

The FBM KLCI might open flat today after US stocks were mixed on Tuesday as investors appeared to stay on the sidelines ahead of Wednesday’s inflation data, which is expected to play a crucial role in determining the Federal Reserve’s next policy decision. The blue chip S&P 500 ended the day flat, with every sector in positive territory except tech and communications, down 1% and 0.4%, respectively. The tech-heavy Nasdaq fell 0.4%. Both indices had ended broadly flat on Monday. The Bureau of Labor Statistics on Wednesday will release its latest US consumer price index report, which is expected to show that headline inflation slowed to 5.1% in March, according to a Bloomberg survey of economists, its lowest level since May 2021. The CPI data should be an important piece of the Fed’s calculus when it meets early next month and debates whether to pause its historic tightening cycle. Across the Atlantic, the Stoxx 600 closed up 0.6%, Germany’s Dax rose 0.4% and London’s FTSE 100 climbed 0.6%. France’s Cac 40 rose 0.9%, reaching an all-time high during the session. Markets had been closed since Friday for the Easter holiday.

Back home, Bursa Malaysia ended at its intraday high on Tuesday, prompted by improved market sentiment across the region as bargain hunting continued, particularly for industrial products and services as well as financial services counters. At the closing bell, the FBM KLCI had risen 7.76 points to 1,435.89, from Monday's close at 1,428.13. In the region, Japan’s Nikkei 225 rose 1.05%, South Korea’s Kospi gained 1.42% and Hong Kong's Hang Seng climbed 0.76%.

Source: PublicInvest Research - 12 Apr 2023