Economy

US: Jobs market softening; slumping productivity boosts labour costs . The number of Americans filing new claims for jobless benefits increased last week, as the labour market gradually softens amid higher interest rates, which are cooling demand in the economy. But borrowing costs could remain elevated for a while, with other data on Thursday showing labour costs surged in the first quarter as worker productivity slumped. (Reuters)

US: Private payrolls increase solidly; wage growth cools . US private employers boosted hiring in April amid strong demand for workers in the leisure and hospitality industry, but a slowdown in wage growth offered some good news for the Federal Reserve's fight against inflation. Private payrolls increased by 296,000 jobs last month, the ADP National Employment Report showed on Wednesday. Data for March was revised lower to show 142,000 jobs added instead of the previously reported 145,000. (Reuters)

EU: ECB's Lagarde rules out a pause as inflation to stay 'too high for too long'. The ECB raised its three key interest rates by a quarter basis point, as widely expected, with policymakers assessing that the inflation outlook in the euro area remained "too high for too long" and ECB President Christine Lagarde signaled more rate hikes ahead. The Governing Council raised the main refinancing rate, or refi, by 25 bps at 3.75%. The deposit facility rate was lifted to 3.25% and the lending rate to 4.00%. (RTT)

UK: Services growth hits 1-year high . The UK service sector expanded at the fastest pace in a year, driven by a sharp upturn in new orders, although strong inflationary pressures continued to persist, survey data from S&P Global revealed. The final Chartered Institute of Procurement & Supply services Purchasing Managers' Index rose to 55.9 in April from 52.9 in March. The flash reading was 54.9. (RTT)

China: Manufacturing sector shrinks on weak demand . China's manufacturing activity contracted for the first time in three months in April reflecting a renewed drop in new business and employment, survey data released by S&P Global showed. The Caixin manufacturing Purchasing Managers' Index dropped to 49.5 in April from 50.0 in March. The reading fell below 50.0-mark that separates expansion and contraction. The score signaled the first contraction in the manufacturing sector in three months. (RTT)

Singapore: Private sector accelerates in April - S&P Global . The private sector in Singapore continued to expand in April, and at a faster pace, the latest survey from S&P Global showed with a PMI score of 55.3. That's up from 52.6 in March, although it remains above the boom-or-bust line of 50 that separates expansion from contraction. (RTT)

Markets

MyEG: Gets three-year extension for online JPJ services, but contract no longer exclusive. MyEG Services’ contract to provide JPJ-related online services has been extended by three years, said Transport Minister Anthony Loke Siew Fook. However, the contract will no longer be exclusive, which means other service providers could also potentially offer the services, which include road tax and driving licence renewal, and summons settlement. (The Edge)

Astino: Buys Klang land for RM60.16m to expand operations. Astino is buying a 884,703 sqft piece of land in Selangor for RM60.16m to undertake its expansion programme. The group had entered into a sale and purchase agreement with Bukit Saujana Jaya SB to acquire a freehold land known as Lot 12 held under HS (D) 165115, PT No 84452, Mukim Kapar, Klang. (The Edge)

AWC: Unit bags RM7.17m job for sanitary fittings, plumbing works. AWC has won a sub-contract worth RM7.17m for works related to cold water, hot water, rainwater harvesting, sanitary plumbing and the installation of sanitary fittings and ware works for a seven-storey block of luxury apartments in Bukit Damansara, Kuala Lumpur. The sub-contract will contribute positively to the group's earnings. (The Edge)

Emico: Buys 20% stake in Kedah-based real estate firm. Emico Holdings is buying a 20% stake in Kedah-based real estate firm PKB-Operasi Tembaga SB from Permodalan Kedah for RM3.61m. The remaining 80% stake in PKB-Operasi Tembaga is owned by Operasi Tembaga SB, which is a 70%-indirect subsidiary of Emico. The transaction would enable its management to have full control over PKB-Operasi Tembaga and also allow full profit enjoyment with the additional 20% of the shares acquired. (The Edge)

Digistar: Proposes one-for-four bonus warrants. Digistar Corp plans to undertake a bonus issue of up to 113.45m warrants, on the basis of one warrant D for every four existing ordinary shares, to reward shareholders. (The Edge)

Swift: Acquires Sarawak-based shipping agency company for Borneo expansion. Swift Haulage (Swift) has bought a Sarawak based private company that handles shipping agency services and cargoes as part of its expansion to Borneo for future growth. (The Edge)

Chin Hin Group Property: To develop Crown Penang with Ivory Properties. Chin Hin Group Property is tying up with Ivory Properties Group to jointly develop the Crown Penang, a sustainability-focused, low-density serviced residence development. (StarBiz)

Sapura Energy: Appealing against Rafizi’s discovery application on former CEO Shahril. Sapura Energy has filed an appeal to the High Court over the Sessions Court’s decision last month, which allowed Economy Minister Mohd Rafizi Ramli to obtain documents related to the remuneration and incentive package paid by the company to its former chief executive officer Tan Sri Shahril Shamsuddin. (The Edge)

MCOM Holdings: Auditor raises concern over MCOM’s ability to continue as a going concern. LEAP-market listed MCOM Holdings said its external auditor has raised a material uncertainty on the group's ability to continue as a going concern with regards to its business activities for the FY2022. (The Edge)

Market Update

The FBM KLCI might open lower as US regional banks continued to slide on Thursday as the industry’s worst crisis since 2008 rumbled on, with California-based lender PacWest exploring a possible sale. Shares in PacWest fell more than 50% after the lender said it had been approached by potential partners and investors over a potential sale. The S&P 500 index of US stocks slid 0.7% and the tech-heavy Nasdaq Composite lost 0.5%. Treasuries continued their rally from Wednesday, with the yield on the rate-sensitive two year note falling 0.07 percentage points to 3.77%. On Wednesday, the Federal Reserve raised the federal funds rate to a new target range of 5% to 5.25%, the highest level since mid-2007. The central bank’s latest statement removed previous guidance stating additional monetary tightening “may be appropriate” and emphasised its policy approach would depend substantially on economic data. Speaking after the policy decision, Fed chair Jay Powell said the central bank still expected inflation would take time to reach its target range. Across the Atlantic, Europe’s region-wide Stoxx 600 fell 0.5% after the European Central Bank raised rates by a quarter of a percentage point to 3.25%, in a move that marks a slowdown from consecutive half-point rises this year. Elsewhere, the Hang Seng added 1.27% while China's Shanghai Composite rose 0.82%.

Source: PublicInvest Research - 5 May 2023