Economy

US: Housing market stabilizing as single-family homebuilding, permits surge. US single-family homebuilding increased for a second straight month in March, while permits for future construction surged, offering some glimmers of hope for the depressed housing market ahead of the busy spring selling season. Single-family housing starts, which account for the bulk of homebuilding, rose 2.7% to a seasonally adjusted annual rate of 861,000 units last month. (Reuters)

US: Fed Governor Bowman casts doubt on the need for a US digital dollar. Fed Governor Michelle Bowman expressed skepticism over the possibility of a digital USD, noting the multiple risks such a system could impose. A central bank digital currency (CBDC) could intrude on the privacy of users and harm the banking system while providing few benefits that aren’t otherwise available for banked and unbanked consumers alike. (CNBC)

US: Fed’s Bostic sees one more quarter-point rate hike, then a hold for quite some time. Atlanta Fed President Raphael Bostic envisions the central bank approving one more interest rate increase before pausing to see how policy tightening is impacting the economy. That 0.25ppts increase likely will come at the rate setting FOMC’s 2-3 May meeting. (CNBC)

EU: German ZEW economic confidence unexpectedly deteriorates in April. German economic confidence deteriorated unexpectedly in April as high inflation and restrictive monetary policy weighed on economic activity. The ZEW Indicator of Economic Sentiment fell sharply to 4.1 in April from 13.0 in March. The score was forecast to improve to 15.3. The score suggested no significant improvement in the economic situation over the next six months. (RTT)

EU: Ireland trade surplus grows on stronger exports. Ireland's foreign trade surplus increased notably in Feb as exports grew sharply amid a fall in imports. The seasonally adjusted trade surplus rose to EUR5.34bn in Feb from EUR3.59bn in the previous month. In the corresponding month last year, the trade balance showed a surplus of EUR5.97bn. Exports logged a monthly growth of 10.0% in Feb, while imports fell by 1.0%. (RTT)

UK: Wage growth strengthens case for rate hike. The UK total pay grew more than expected in the three months to Feb and higher job vacancies again strengthened wage demands, adding the call for a quarter-point interest rate hike from the BoE next month. The unemployment rate rose slightly to 3.8% in the three months to Feb from 3.7% in the preceding period. (RTT)

China: Economy picks up as global risks loom. China’s economy grew at a faster-than-expected pace in the Q1, as the end of strict Covid curbs lifted businesses and consumers out of crippling pandemic disruptions, although headwinds from a global slowdown point to a bumpy ride ahead. (Reuters)

Indonesia: Leaves rates unchanged at 5.75% for third time. Indonesia's central bank held its interest rates steady for the third successive meeting and signalled that they will remain unchanged for the rest of the year as policymakers assessed that the current level of interest rates is sufficient to anchor inflation within the target range. The Board of Governors of Bank Indonesia decided to hold the 7-day reverse repo rate at 5.75%. (RTT)

Markets

FGV (Neutral, TP: RM1.61): Strongly refutes claim by man suing group for alleged trespass of Sabah land. FGV Holdings said its two wholly owned units that are being sued for alleged fraudulent transactions and trespass relating to land in Sabah held under a native title, strongly refute the claim. The units intend to fully defend themselves are in the process of engaging lawyers to represent them in the matter. (The Edge)

DPS Resources: To buy land in Melaka for RM46m to undertake mixed development. DPS Resources has proposed to acquire 253 acres of freehold land in Melaka for RM45.60m, to undertake mixed development projects. The acquisition is part of the group’s strategy to expand its land bank and enhance its presence in the property market in Melaka. The group will fund the purchase of the land via a combination of internally generated funds and bank borrowings. (The Edge)

SMRT: Gets shareholders’ nod to become a pure play IOT solutions provider. Shareholders of SMRT Holdings have approved the group’s plan to fully acquire a subsidiary engaged in technology business and to exit its education business, which will transform SMRT into a pure play IOT solutions provider. In an EGM held on April 18, the majority (99.49%) of SMRT’s shareholders voted for the proposed acquisition of the remaining 36% stake not already owned by the group in N'osairis Technology Solutions SB from Permata Kirana SB for RM72m cash. (The Edge)

Malaysian Genomics: To raise RM4m via private placement for investment, working capital. Malaysian Genomics Resource Centre (MGRC) has proposed a private placement to raise up to RM3.85m to be used for future viable investment and working capital. The proposed private placement entails the issuance of up to 7m new shares, representing 5.38% of total issued shares, to third-party investors at an issue price to be determined later. (The Edge)

Censof: Bags RM6m job from Pelaburan Hartanah. Financial management software solution provider Censof Holdings has secured a RM5.97m project to develop a unit trust management system for Pelaburan Hartanah (PHB). This follows the acceptance of a letter of intent that Censof had received from PHB 8 months ago. (The Edge)

Supermax: Stanley Thai’s daughter Cecile resigns from board, cites disagreement over several matters. Cecile Jaclyn Thai, the daughter of Supermax Corp’s executive chairman and major shareholder Datuk Seri Stanley Thai, has resigned from her post as non-executive director of the group, following a disagreement with the board on several matters. Cecile, 35, had expressed her disagreement on several matters discussed at the board meetings. However, the decision was carried by majority vote. (The Edge)

Comintel: Secures RM230m construction contract from BDSB. Comintel Corp has won a contract worth RM229.8m from Builtamont Development SB (BDSB) to undertake main building works for a suite apartment project in Taman Desa Aman, Kuala Lumpur. The contract is for a duration of 34 months, commencing from May 1, 2023. (The Edge)

Market Update

The FBM KLCI might open flat today after US stocks were muted on Tuesday, as investors assessed a fresh batch of sluggish earnings reports while contemplating the future path of interest rate rises in the world’s biggest economy. The S&P 500 closed up 0.1%, with a 1.8% decline for Goldman Sachs helping to keep gains in check. The technology-heavy Nasdaq Composite ended the day flat. Goldman reported a slowdown in dealmaking and underperformance in its trading business on Tuesday, while Bank of America said it would cut 4,000 jobs despite strong corporate earnings. With the latter bank up 0.6% at the close, the KBW Bank index edged 0.2% higher. The region-wide Stoxx 600 closed up 0.4%, while Germany’s Dax and France’s CAC 40 were up 0.6% and 0.5% respectively.

Back home, Bursa Malaysia closed in negative territory in tandem with the weak regional performance on Tuesday, with key regional indices ending mostly lower as investors were cautious ahead of the earnings season. At the closing bell, the FBM KLCI was 0.18% or 2.54 points easier at 1,432.36, from Monday's close at 1,434.90. China reported that its gross domestic product rose 4.5 % year on year in the first quarter, well above analysts’ expectations of a 4 % rise. he CSI 300 index of Shanghai- and Shenzhen-listed shares erased earlier losses to close up 0.3%. In Hong Kong, the Hang Seng index was down 0.6%.

Source: PublicInvest Research - 19 Apr 2023