Economy

EU: Lifts Eurozone growth and inflation projections. The European Commission raised the euro area economic growth and inflation projections for this year but warned that the single currency bloc faces several risks that policymakers must monitor closely. The currency-bloc is projected to grow 1.1% this year and 1.6% in 2024. These figures reflect upward revision from 0.9% and 1.5%, respectively. Data suggested a smaller-than-estimated contraction in the final quarter of 2022 and positive growth in the first quarter of this year. The region weathered the energy crisis with the rapid diversification of supply and a marked decline in consumption. (RTT)

EU: Eurozone industrial production falls most in 17 months. Eurozone industrial production declined at the fastest pace in nearly 1.5 years in March, largely led by a slump in the capital goods output, and suggested that a downward revision to the first quarter economic growth was likely. Industrial production logged negative monthly growth of 4.1% in March, reversing a 1.56% gain in Feb. That was above the 2.5% fall economists had expected. The decline in March brings industrial production back to the lowest reading since Oct 2021. The downward trend was largely influenced by a sharp fall in the computer, electronics, and optical products industries in Ireland. (RTT)

EU: Germany wholesale prices fall for first time since late 2020. Germany's wholesale prices logged its first decline since Dec 2020 driven by the sharp fall in mineral oil product prices. The wholesale price index declined 0.5% in April from the last year, following March's 2.0% increase. Prices dropped for the first time since December 2020, when the index slid 1.2%. Prices were forecast to drop 0.7% in April. Selling prices in wholesale trade of mineral oil products plunged 15.7% and that of scrap and residual minerals declined 31.5%. (RTT)

China: Keeps medium-term lending facility rate unchanged. China's central bank kept the rate on one-year medium term lending facility unchanged. The People's Bank of China infused CNY125bn into the financial market through one-year MLF. The rate on the MLF was retained at 2.75%. The operation was conducted to maintain reasonable liquidity in the banking system. The bank also conducted CNY2bn of seven-day reverse repos at a rate of 2.00%. As the MLF rate was kept unchanged today, the PBoC is likely to (RTT)

Japan: Machine tool orders plunge 14.4%. Japan's machine tool orders declined for the fourth straight month in April amid lower demand both domestically and internationally. Machine tool orders plunged 14.4% YoY in April, slightly slower than the 15.2% fall in the previous month. Domestic demand was 21.2% lower in April compared to last year, and foreign orders contracted 10.9%. On a monthly basis, machine tool orders fell 5.9% in April, reversing a 13.6% gain in the prior month. (RTT)

South Korea: Export prices sink 7.5% on year in April. Export prices in South Korea were down 7.5% on year in April - exceeded expectations for a decline of 9.0% following the 6.2% drop in March. On a monthly basis, export prices rose 0.1% - slowing from 2.2% in April. Individually, prices for agricultural and forestry exports shed 7.4% on month and 0.6% on year, while prices for manufacturing products dropped 7.5% on year and rose 0.1% on month. (RTT)

Thailand: GDP growth exceeds expectations in 1Q. The Thai economy registered a faster-than-expected growth in 1Q underpinned by exports, household spending and investment. GDP posted an annual growth of 2.7% after expanding 1.4% in the preceding quarter. GDP was expected to grow 2.3%. QoQ, GDP grew 1.9%, reversing a 1.1% fall in the prior period. This was also faster than the 1.7% economists' expectations. The economy is projected to expand 2.7-3.7% driven by the recovery in tourism sector and the continual growth of private consumption and investment. The forecast was unchanged from the previous outlook. (RTT)

Markets

CapitaLand Malaysia Trust: Acquires second logistics property for RM39.7m. CapitaLand Malaysia Trust (CLMT), has entered into a SPA with Cynnyx SB to acquire a freehold logistics warehouse at the Hicom-Glenmarie Industrial Park in Shah Alam worth RM39.7m. CapitaLand Malaysia REIT Management SB (CMRM) is the manager of CLMT while MTrustee is the trustee. CLMT said that in tandem with the proposed acquisition, CMRM has also executed a letter of offer with a reputable international luxury fashion retailer to lease the building for 10 years. (Bernama)

Tomei: To buy stakes in Pajak Gadai JP for RM3.8m. Tomei Consolidated has proposed to acquire a 100% stake in Pajak Gadai JP SB (JP) from Datuk Ng Yih Pyng and Datin Choong Chow Mooi for RM3.8m cash. Tomei said its wholly owned subsidiary, Tomei Services SB (TS) had entered into a sale and purchase agreement (SPA) to purchase four million ordinary shares representing 100% equity interest in JP from Ng and Choong. Ng is the managing director of Tomei while Choong is the executive director of Tomei. (StarBiz)

G Capital: 4.5MWp solar power plant for Muda Holdings commences operation. G Capital’s 70%-owned solar photovoltaic 4.5 MWp electric power generation system for Muda Holdings’ unit in Penang has been completed and commenced operation on Monday (15 May). The plant will be contributing revenue and earnings to G Capital over a span of 25 years from the commercial operation date. (The Edge)

GDB: Files fresh lawsuit against KSK Land claiming RM102m for 8 Conlay jobs. GDB Holdings’ unit filed a fresh lawsuit against KSK Land SB, claiming an outstanding sum of RM102.1m in relation to the corporate guarantee KSK Land made in August last year. GDB’s wholly-own Grand Dynamic Builders SB had filed a writ of summons and statement of claim in the High Court here against KSK Land. (The Edge)

Teo Seng Capital: Continues to adapt to challenges. Teo Seng Capital remains vigilant and proactive on implementing strategies to address the challenging business environment. In view of the high feed cost and uncertainty market conditions, the directors are in opinion that the financial performance remains challenging for the remaining nine-months period ending 31 Dec 2023 (FY23) and the directors remain vigilant and pro-active on implementing strategies to address these challenges. In the first quarter ended 31 March, Teo Seng’s net profit surged to RM19.7m from RM4.2m posted a year ago. (StarBiz)

Samchem: 1Q net profit weighed down by lower sales volumes, margins. Samchem Holdings’ net profit tumbled 66.6% YoY to RM6.54m or 1.2sen per share for the 1QFY2023, against RM19.6m or 3.6 sen per share a year ago, weighed down by lower sales volumes and margins. The integrated chemicals and lubricants distributor registered a lower revenue of RM255.39m down 29.9% YoY, from RM364.5m in 1QFY2022, amid decrease in average selling price and sales volume. On QoQ basis, the group managed to return to profitability versus a net loss of RM2.1m in 4QFY2022 due to improvement in gross profit margin, gains in disposal of property and equipment, forex gains and improvements in operational efficiency despite revenue falling 7% from RM273.3m. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks were subdued on Monday as investors awaited news about debt ceiling negotiations and assessed fresh data pointing to a cooling economy. The tech-heavy Nasdaq Composite index rose 0.7%, extending its gains from the previous week, while Wall Street’s benchmark S&P 500 added 0.3%. The moves in US equities came as traders were looking ahead to a breakthrough between the White House and Republican lawmakers in talks to raise the federal borrowing limit and avoid a national default, ahead of President Joe Biden’s meeting with Congressional leaders on Tuesday. The KBW regional banking index, which has been buffeted by the failures of three lenders since March, added 3%. In Europe, the region-wide Stoxx 600 rose 0.2%, while France’s CAC 40 and Germany’s Dax ended the day flat, having steadied after trading down during much of the session

    Back home, Bursa Malaysia closed lower for the fifth consecutive session on Monday, as weak market sentiment due to external developments weighed on investors’ risk appetite. At the closing bell, the FBM KLCI had fallen 5.55 points, or 0.39%, to 1,417.37, from last Friday’s close at 1,422.92. Regional stocks mostly rose, with China’s CSI 300 climbing 1.6% and Hong Kong’s Hang Seng index adding 1.8%. China’s renminbi fell on Monday to its weakest level against the dollar in two months

Source: PublicInvest Research - 16 May 2023