Economy

US: Homebuilder sentiment improves further, NY state manufacturing rebounds. Confidence among US single-family homebuilders improved for a fourth straight month in April as a dearth of previously owned homes and falling mortgage rates boosted demand for new houses, but a shortage of building materials remained a challenge. The improvement occurred despite recent financial market turmoil that has heightened the risks of a broader economic downturn. Nevertheless, other sectors of the economy are starting to show strain from the Fed’s battle against inflation. Retail sales dropped for a second month in a row in March and job growth is slowing. (Reuters)

US: Lower inflation without sparking a recession. Last month’s banking crisis in the US could still hurt businesses by making loans harder to come by, but Treasury Secretary Janet Yellen believes it could also help the US economy find its way to a Goldilocks zone, where the growth slows down just enough that inflation peters out, but not so much to collapse. (Fortune)

US: Central banks will stomach higher inflation. Investors are concerned that inflation could not just remain sticky, but that central banks could be forced to accept higher inflation going forward. Inflation surged in the wake of the pandemic and war in Ukraine, prompting policymakers around the world to embark on one of the most aggressive interest-rate hiking cycles in history. (Bloomberg)

EU: Italy inflation eases to 7.6%. The CPI climbed 7.6% YoY in March, slower than the 9.1% rise in Feb. Further, this was the weakest inflation rate since May 2022, when prices had risen 6.8%. The slowdown in inflation was mainly driven by lower energy costs. Prices for regulated energy fell more sharply by 20.3% annually in March versus a 16.4% decline a month ago. (RTT)

EU: Sweden’s economic gloom goes from bad to worse as government predicts steeper GDP contraction. The Swedish government is now predicting a deeper-than-expected GDP contraction in 2023, worsening an already gloomy outlook for the country’s economy. Sweden’s MoF estimated in Dec that GDP would shrink by 0.7%, but it now predicts a 1% downturn as it reassesses the challenging economic environment. (CNBC)

EU: Slovakia ignores EU warning and bans grain imports from Ukraine. Slovakia has become the third EU country to ban food imports from Ukraine, brushing aside warnings from Brussels over the potential illegality of the move. Poland and Hungary announced their bans at the weekend, with all three countries saying that a mountain of imported Ukrainian grain was depressing prices and causing hardship for their farmers. (Financial Times)

UK: Irish construction activity signals slight contraction in March. Ireland's construction activity continued to deteriorate in March, though marginally, amid sustained and stronger expansion in new orders on the back of cooling inflationary pressures. The headline BNP Paribas Real Estate Ireland Construction Purchasing Managers' Index dropped to 49.5 in March from 49.8 in Feb. (RTT)

China: Keeps medium-term lending facility rate at 2.75%. China's central bank maintained the rate on the one-year medium term lending facility. The People's Bank of China added CNY170bn via one-year MLF at an interest rate of 2.75%. The central bank also conducted seven-day reverse repo operations worth CNY20bn at a rate of 2.00%. (RTT)

India: Wholesale price inflation slows to 1.34%, lowest in 29 months. India's wholesale price inflation eased more-than-expected in March to the lowest level in nearly two-and-a-half years amid a continued slowdown in prices in a wide range of categories. The wholesale price index, or WPI, rose 1.34% YoY in March, slower than the 3.85% rise in Jan. (RTT)

Indonesia: Trade surplus shrinks sharply as exports plunge 11.33%. Indonesia's foreign trade surplus decreased notably in March, as exports fell more rapidly than imports. The trade surplus shrank to USD2.91bn in March from USD4.53bn in the same month last year. (RTT)

Markets

Citaglobal: To raise RM50m via private placement for business investment and expansion. Citaglobal has proposed a private placement of 37.96m new shares to five subscribers, to raise a sum of RM50.1m. The group has earmarked RM33m of the amount for investment or expansion in the existing businesses of the group, RM15.87m for general working capital, and RM1.23m for expenses in relation to the placement. The new shares will be subscribed at RM1.32 per share and represent 10% of the group's total issued shares. (The Edge)

Glomac: Partners TNB to explore solar, green energy facilities business. Glomac has inked an agreement with Tenaga Nasional (TNB) to explore potential business opportunities in solar and green energy facilities. A MOU was signed on April 17 and would remain effective for 24 months from the date of signing. (The Edge)

Jiankun: Buys land in Melaka for RM26m to undertake commercial development. Jiankun International is acquiring a parcel of leasehold land in Klebang, Melaka for RM26m, which will be partially funded through a private placement from Cash Support Group SB to undertake a commercial development comprising retail, serviced apartments and office units. (The Edge)

Ramssol: Incorporates RAMS Fintech into group. Ramssol Group has incorporated RAMS Fintech SB as the group’s new wholly owned subsidiary. The issued and paid-up capital of RAMS Fintech is RM1,000 divided into 1,000 ordinary shares of RM1.00 each. RAMS Fintech would be principally involved in businesses in relation to internet-related services for business of mobile application, e-commerce, administration and integration and developing and marketing of software and application and commission agency. (The Edge)

MN Holdings: Secures contract on natural gas distribution system in Tanjung Malim. MN Holdings has secured a contract from Rentak Segar SB to undertake the EPCC of a natural gas distribution system in Tanjung Malim, Perak worth RM20.2m. Mutu Nusantara was appointed as the sub-contractor of this project and will be responsible for the engineering design, procurement of materials, spare parts and supplies, provision of construction equipment, as well as testing and commissioning. (The Edge)

Salcon: Clinches Sungai Selangor Dam hydro power plant project for RM65m. Salcon has secured a contract to build a small hydro power plant of 10.44MW at the Sungai Selangor Dam worth RM65m. The company has accepted the LOA from AIS Small Hydro SB for the EPCC of the power plant. (The Edge)

Seni Jaya: Gets five-year contract to promote out-of-home advertising on LRT Ampang Line. Seni Jaya Corp has won an award from Prasarana Malaysia involving external advertising on the LRT Ampang Line starting July 1 this year for five years, with a possible extension of another five years. The Group accepted the LOA dated April 12 from Prasarana Malaysia to perform sales, marketing and business support for LRT Ampang Line's external advertising. (The Edge)

Market Update

The FBM KLCI might open higher today after US stocks rose on Monday as traders weighed their concerns over a potential recession and its implications for interest rates against a mixed bag of results from the latest US banks to report their earnings. Wall Street’s benchmark S&P 500 and the tech-heavy Nasdaq Composite both ended 0.3% higher. The indices had declined for most of the session until pushing into positive territory in the final hour, driven by financial stocks. Across the Atlantic, Europe’s Stoxx 600 was flat, close to its highest level since February 2022. Germany’s Dax fell 0.1% and London’s FTSE 100 rose by the same amount.

Back home, Bursa Malaysia closed lower on Monday, with the key index moving in a tight range ahead of the release of China's first quarter gross domestic product data on Tuesday. At the closing bell, the FBM KLCI had eased by 0.23 of a point to 1,434.90, from last Friday's close at 1,435.13. The regional stocks rallied after prices for new homes in China rose 0.5% in March, the fastest pace in 21 months, and ahead of the release of the country’s first-quarter gross domestic product numbers on Tuesday. Hong Kong’s Hang Seng index rose 1.7% while the CSI 300, China’s benchmark of onshore-listed companies, climbed 1.4%.

Source: PublicInvest Research - 18 Apr 2023