Economy

US: Employment jumps in Apr but job growth in prior months downwardly revised. Job growth in the US far exceeded economist estimates in the month of Apr, although the jump in employment followed notable downward revision to the two previous months. The non-farm payroll employment shot up by 253,000 jobs in Apr compared to economist estimates for an increase of about 179,000 jobs. (RTT)

EU: German construction sector stays in deep contraction zone. Germany's construction sector continued to contract in Apr as rising interest rates and high construction prices dampened activity. The HCOB construction PMI fell to 42.0 in Apr from 42.9 in the previous month. The score has remained below the 50.0 mark that separates growth from contraction. Moreover, the reading signaled the weakest performance since Dec last year. The fall in construction activity was broad-based in Apr with the housing sector posting the sharpest decline. (RTT)

EU: Italy Retail Sales Remain Flat In Mar. Italy's retail sales remained flat for the second straight month in Mar, in line with expectations. The retail sales value showed no variations in Mar, the same as in the previous month. The value of sales of both foods and non-food items was stationary at the end of the first quarter. On a yearly basis, retail sales growth held steady at 5.8% in Mar. Food sales advanced 7.7% and those of non-food items grew 4.1%. Online sales were 10.3% higher in Mar compared to last year, well above the 5.7% rise in the preceding month. Data also showed that the volume of retail sales dropped 0.3% monthly and by 2.9% yearly in Mar.(RTT)

EU: French Industrial Production Declines In Mar. France's industrial production declined more than expected in Mar after the strikes in the refineries dampened refined products output, Industrial production dropped 1.1% from Feb, when output was up 1.4%. Production was expected to drop only 0.3%. Similarly, manufacturing output decreased 1.1% in Mar after a 1.3% rise. The manufacture of coke and refined petroleum plunged 45.6%, following a 0.8% rise due to the strikes in the refineries, data showed. (RTT)

UK: Construction activity expands for third month. The British construction sector remained in expansion territory for the third straight month in Apr as rising volumes of commercial and civil engineering work were largely offset by a steep decline in the housing activity. The Chartered Institute of Procurement & Supply construction PMI, rose slightly more-than-expected to 51.1 in Apr from 50.7 in Mar. The expected reading was 51.0. Among the three monitored sectors, commercial building was the fastest-growing area with the rate of expansion the second-strongest since Oct last year. (RTT)

China's service sector remains a bright spot as factory data disappoint. China’s services activity remained well within growth territory in Apr, even as a private survey showed a softer reading compared with Mar. The Caixin/S&P Global services PMI fell to 56.4 in Apr from 57.8 in the previous month. That’s still the second highest figure recorded since Nov 2020. (CNBC)

Taiwan: Inflation stable at 2.35%. Taiwan CPI held steady in Apr after easing in the previous two months, data released. The CPI, rose 2.35% yoy in Apr, the same rate of increase as in Mar. Economists had forecast inflation to drop to 2.20%. Food prices were 4.19% more expensive compared to last year, and education and entertainment costs moved up 3.29%. Housing costs climbed 2.34%, while clothing prices showed a fall of 0.65%. (RTT)

Indonesia: GDP growth tops expectations. Indonesia's economy expanded at a faster-than-expected pace in the first quarter on the back of robust household spending and foreign demand, official data revealed. GDP grew 5.03% on a yearly basis in the 1Q, following the fourth quarter's 5.01% expansion in the preceding period. (RTT)

Markets

Sapura Energy (Underperform, TP: RM0.02): Labuan unit placed under voluntary winding-up . Sapura Energy said its unit in Labuan, Sapura Drilling Kinabalu Pte Ltd (SDKPL), has been placed under voluntary winding up. It said the notice for declaration of dissolution pursuant to Section 131A of the Labuan Companies Act 1990 and Labuan Companies (Amendment) Act 2022 was lodged with the Labuan Financial Services Authority on May 5. SDKPL is fully owned by Sapura Drilling (Bermuda) Ltd, which in turn is a wholly-owned subsidiary of Sapura Energy. (The Edge)

Bright Packaging: Partners with Datai Plantations to invest in Sarawak oil palm plantation . Bright Packaging Industry has entered into a new joint venture agreement with Datai Plantations SB (DPSB) for further diversification and increase its investment in oil palm plantation with facilities and provision of services ancillary on land located in Sarikei, Sarawak with an investment of RM5.3m. It said the agreement was also to supersede the previous joint venture agreement dated Aug 19, 2021 between both parties. (The Edge)

F&N: Optimistic of achieving better growth in 2H23 . Fraser and Neave Holdings (F&N) anticipates better growth for the second half of 2023 (2H 2023), underpinned by strong domestic demand in Thailand, an influx of tourists from China, and contribution from Cocoaland Holdings. F&N chief executive officer Lim Yew Hoe said the group would also focus on the volume and brand development for the food and beverages (F&B) segment in Malaysia for the rest of 2023. (StarBiz)

YKGI Holdings: Seeks to diversify into construction, property development . YKGI Holdings said its venture into construction and property development will potentially contribute 25% or more to the group's net profit or net assets. YKGI said it diversified into construction in 2019 when its 80.36%-owned indirect subsidiary, Asteel Development SB (ADSB), undertook construction and renovation works relating to the installation of industrialised building system (IBS) products for the group's customers. (The Edge)

SDS Group: To transfer to Main Market on May 8 . ACE Market listed bakery product manufacturer SDS Group Bhd will be migrated to the Main Market of Bursa Malaysia under the “consumer products & services” sector on May 8. SDS transfer to the Main Market is expected to “enhance the group’s prestige and reputation”, and will accord it “greater recognition and acceptance among investors”, in particular institutional investors, it had said. (The Edge)

Eversendai: Auditors raise doubts over Eversendai’s ability to continue as a going concern . Eversendai Corp said its independent auditors have raised concerns about the loss-making construction firm’s ability to operate as a going concern in its audited financial statements for the year ended Dec 31, 2022 (FY2022). Messrs Baker Tilly Monteiro Heng PLT highlighted that the group incurred a net loss of RM366.9m and that its current liabilities exceeded their current assets by RM168.3m. (The Edge)

Westports: Posts higher 1Q net profit of RM183.6m . Westports Holdings reported a throughput volume of 2.55m TEUs in the first quarter of 2023 with much of the volume underpinned by intra-Asian shipments. The port operator reported a pre-tax profit of RM236.9m in 1QFY23, lower than RM248.8m in the same quarter in 2022. (StarBiz)

Market Update

The FBM KLCI might open higher today after US regional bank shares and Apple led a rebound for Wall Street stocks on Friday, while government bond prices sank after strong jobs data revived concerns the Federal Reserve would keep interest rates higher for longer. After a sell-off on Thursday, the benchmark S&P 500 stock index rose 1.9%, but finished the week 0.9% lower. The tech-heavy Nasdaq Composite closed 2.3% higher and was virtually flat for the week. In Europe, the region-wide Stoxx Europe 600 advanced 1.1% and London’s FTSE 100 gained 1%. Germany’s Dax rose 1.4%, pushed higher by a 8.9% gain for sportswear maker Adidas, even after figures showed that German factory orders fell 10.7 % in March from the previous month, a much bigger drop than economists had expected. That raised concerns about a sharp slowdown in Europe’s biggest economy. The European Central Bank on Thursday raised interest rates by a quarter of a percentage point, a slowdown from previous increases, but warned that the fight against inflation was not yet won.

Back home, the FBM KLCI closed 0.35% or 5.05 points higher at 1,431.04, from Wednesday’s close at 1,425.99. The benchmark index opened 2.38 points lower at 1,423.61, and moved between 1,421.78 and 1,431.15 throughout the day. The regional markets finished mixed with the Hang Seng gained 0.50% and the Nikkei 225 rose 0.12%. The Shanghai Composite lost 0.48%.

Source: PublicInvest Research - 8 May 2023