Economy

US: McCarthy unveils debt ceiling bill that aims to cut big parts of Biden’s agenda. House Speaker Kevin McCarthy, R-Calif. released his plan to raise the debt ceiling by USD1.5trn for about a year while attempting to repeal major components of President Joe Biden’s agenda. The bill, called the Limit, Save, Grow Act of 2023, would save American taxpayers more than USD4.5trn by limiting discretionary spending, retrieving unspent pandemic-related funds, eliminating Biden’s student loan forgiveness plan and cutting funds earmarked for the Internal Revenue Service. (CNBC)

EU: Prepares emergency curbs on grain imports from Ukraine. Brussels is preparing emergency curbs on Ukrainian grain imports to five member states close to the war-torn country, bowing to pressure from Poland and Hungary after they took unilateral action to pacify local farmers. The bloc would take preventive measures as EU officials tried to respond to several countries, including some of Kyiv’s staunchest allies, breaking ranks to defend their farmers from an influx of cheap grain. (Financial Times)

UK: Unexpected jump in wage growth fuels inflation concerns. UK wage growth accelerated unexpectedly, adding to inflationary pressures that are concerning the BoE. Average earnings excluding bonuses rose 6.6% in the three months through Feb compared with a year ago. That was quicker than the 6.2% pace economists had expected. The previous month’s reading was also revised up, dashing hopes for a slowdown. (Bloomberg)

UK: To cut chip imports from risky parts of world. Britain needs to cut its reliance on semiconductor imports from geopolitically sensitive parts of the world such as Taiwan, the government will argue when it publishes a long-delayed review of the sector. The new strategy, which is expected within weeks will also offer hundreds of millions of pounds in long-term targeted financial support to the sector with a focus on the most high-tech parts of the industry, according to government officials familiar with the draft report. (Financial Times)

Japan: Industrial production rebounds 4.6%, more than estimated. Japan's industrial production expanded more than initially estimated in Feb. Industrial production rose by a seasonally adjusted 4.6% MoM in Feb, reversing a 5.3% decrease in Jan. In the flash report, the rate of increase was 4.5%. Further, this was the strongest rate of growth since June 2022, when production had grown 9.2%. Shipments advanced 3.9% monthly in Feb, and the rise in inventories was 1.3%. Meanwhile, the inventory ratio showed a negative growth of 1.8%. (RTT)

India: Overtakes China as world’s most populous country this year. India is due to overtake China as the world’s most populous country by mid-year, marking a historic shift for the two Asian rivals. According to the UN Population Fund’s World Population Dashboard, India’s growing population is to surpass 1.428bn by mid-2023, just above the more than 1.425bn people in China, where fertility rates are falling. (Financial Times)

Australia: Recession probability eases to 35% amid policy pause. Australia’s chances of sliding into a recession have declined, as the Reserve Bank’s decision to pause an 11-month tightening cycle helps improve the economic outlook. The median estimate for a slump is 35%, down from 40% last month. Among respondents, AMP Capital Markets and Commonwealth Bank of Australia predicted a 35% chance. (Bloomberg)

New Zealand: Inflation rises 1.2% In Q1. CPI in New Zealand were up a seasonally adjusted 1.2% on 1QFY23. That was shy of expectations for an increase of 1.7% and down from 1.4% in the three months prior. Individually, food prices rose 3.7% on quarter, while alcohol and tobacco added 4.1% and housing and utilities rose 1.0%. On an annualized basis, inflation climbed 6.7%, below forecasts for 7.1% and down from 7.2% in the previous three months. Individually, food prices jumped 11.3% on year, while housing and utilities gained 7.1% and recreation added 6.9%. (RTT)

Markets

GDB: 8 Conlay contract terminated. KSK Group has terminated its contract with GDB Holdings, as the main contractor for its flagship 8 Conlay development due to the failure to achieve solutions that both parties agreed on relating to different disputes. The disputes consisted of construction site matters over the last nine months, covering issues such as the scope of works, construction programme and financial instalment payments due to the Covid-19 pandemic. (BTimes)

Cahya Mata Sarawak: Gets RAM's ratings upgrade. RAM Ratings has revised the outlook on Cahya Mata Sarawak's long term ratings from stable to positive in view of Cahya Mata's improving business and financial profiles. Cahya Mata's new phosphates manufacturing division started commissioning production and would transition to commercial operations by mid- 2023. (BTimes)

Mudajaya: Partners with Hong Kong-based company to jointly bid for RE projects. Mudajaya Energy and Concord New Energy Group Ltd will form an unincorporated joint-venture on a 50:50 basis to develop and finance the renewable energy projects, particularly in solar and wind energy power plants in Southeast Asia and China. The proposed venture affords the group the opportunity to expand its current power and energy segment, which is expected to strengthen its future earnings. (The Edge)

Siab Holdings: Agrees to Yong Tai’s settlement arrangement following termination of projects. Siab Holdings has accepted a settlement arrangement from Yong Tai following their mutual agreement to terminate two high-rise property projects with a combined outstanding contract value of RM190.48m. The projects are Impressions U-Thant and Amber Cove. Yong Tai owes Siab RM3.37m of which RM2.98m will be offset with two units of condominium at Impressions U-Thant and one unit of apartment at Amber Cove. The remaining RMM386,380 will be settled by Yong Tai within the next three months. (The Edge)

OCR Group: Units sued by contractor over alleged payment default. OCR Group units are being sued by their contractor over alleged payment default of RM30.93m in relation to projects in Kuantan and Petaling Jaya. Kencana Amanjaya SB is suing OCR relating to a residential project involving 979 terrace houses and 130 units of semi-detached houses in Kuantan. Kencana’s claims include RM16.38m of outstanding debt and general damages arising from breach of contract. (The Edge)

GIIB: To sell land in Tuaran for RM14m to fund capex. GIIB Holdings is selling a 1.689ha parcel of industrial land in Tuaran, Kota Kinabalu, Sabah to metal and steel product wholesaler Kozai Realties SB for RM14m cash. The disposal consideration represents a premium of 88.9% to the latest audited net book value of the land of RM7.4m as at June 30, 2022. The original cost of investment for the Tuaran land was RM2.3m in June 2005. (The Edge)

Computer Form: Remaining substantial shareholder cuts stake to 4.8%. Computer Forms (M) remaining substantial shareholder, Arena Evolusi SB, has reduced its stake in the group to 4.8% from 5.47%. Arena disposed of the stake comprising 1.8m shares via the open market on March 17. Three other shareholders ceasing to be substantial shareholders in March. (The Edge)

Market Update

The FBM KLCI might open flat today after Wall Street stocks fluctuated between minor losses and gains on Wednesday as investors digested the latest results from US banks and streaming giant Netflix. The S&P 500 finished flat, as did the tech-heavy Nasdaq Composite, which is up 15% this year. Morgan Stanley shares reversed losses to gain 0.7%, even as its first-quarter results showed a drop in earnings following a slowdown in deal making. In Europe, the region-wide Stoxx 600 fell 0.1% while Germany’s Dax rose by the same amount. Elsewhere, London’s FTSE 100 lost 0.1% after annual UK consumer price growth last month eased less than expected to 10.1%, down from 10.4% in February.

Back home, Bursa Malaysia closed lower for the third consecutive day due to profit-taking activities, ahead of the Hari Raya Aidilfitri holidays, amid weaker regional market performances. At the closing bell, the FBM KLCI was 7.29 points or 0.51% lower at 1,425.07, from Tuesday's close at 1,432.36. The regional stocks retreated, with Hong Kong’s Hang Seng index down 1.4% and China’s CSI 300 index losing 0.9%, down from its highest level since early February.

Source: PublicInvest Research - 20 Apr 2023