Economy

US: Fed’s Kashkari says a June pause on rates wouldn’t  indicate an end to hiking cycle. Minneapolis Fed President Neel  Kashkari is open to holding off on another interest rate hike next  month, but cautioned against reading too much into a pause. Markets currently are putting about an 83% probability that the rate-setting FOMC holds off on what would be an 11th consecutive  increase when it convenes 13-14 June. Kashkari is a voting  member on the FOMC this year. (CNBC)

US: Biden, McCarthy meeting ends with no deal on debt  ceiling. President Joe Biden and House Speaker Kevin McCarthy  ended discussions on Monday with no agreement on how to raise  the US government's USD31.4trn debt ceiling and will keep talking  with just 10 days before a possible default that could sink the US  economy. The Democratic president and the top congressional  Republican have struggled to make progress on a deal, as  McCarthy pressures the White House to agree to spending cuts in  the federal budget that Biden considers extreme and the president  pushes new taxes on the wealthy that Republicans reject. (Reuters)

EU: Construction output declines for first time in 3 months.  Eurozone construction output declined for the first time in three  months in March. Production in the construction sector decreased  2.4% on a monthly basis, in contrast to the 1.7% rise in Feb and the  3.7% gain in Jan. This was the first fall so far this year. Production  in both building and civil engineering declined in March. Building  construction posted a monthly fall of 2.4% and civil engineering  registered a 2.3% decrease. On a yearly basis, total construction  output was down 1.5% in March after a 2.1% rise a month ago.  (RTT)

EU: Consumer confidence improves modestly. Pessimism  among euro area consumers declined for a second straight month  in May, but the improvement was less than expected, preliminary  survey results from the European Commission showed Monday.  The seasonally adjusted flash consumer confidence rose to -17.4  from -17.5 in April. (RTT)

China: Holds lending rates steady as market sees reserve ratio  cut as next move. China kept its benchmark lending rates  unchanged for the ninth month in May on Monday, matching market  expectations, as a weakening yuan and widening yield differentials  with the US limited the scope for any substantial monetary easing.  (Reuters)

Hong Kong: Inflation rises more than expected to 2.1%. Hong  Kong's CPI rose slightly more-than-expected in April after remaining  stable in the previous month. The CPI, climbed 2.1% YoY in April,  faster than the 1.7% increase in March. Utility costs alone grew  17.8% annually in April, and those for clothing and footwear were  6.4% more expensive. (RTT)

Taiwan: Export orders plunge 18.1%. Taiwan's export orders  continued to decline sharply for the eighth consecutive month in  April, though at a slower pace, according to data released by the  Ministry of Economic Affairs on Monday. Export orders registered a double-digit annual fall of 18.1% in April, which was slower than the  25.7% plunge in March. (RTT)

Markets

Apex Equity (Neutral, TP: RM1.15): Largest shareholder  nominates three directors to board. Fun Sheung Development  Ltd — the single largest shareholder in Apex Equity Holdings with a  stake of 15.78% — has submitted a notice of resolutions to  nominate three directors to the company’s board. The nomination of  three directors — namely Quintin Jeyaraj Vello, Lim Tian Huat, and  Hong Kim Heong — will be tabled at its upcoming AGM to be held  on June 19. The trio are Malaysians. (The Edge)

EG Industries: Teams up with Yamaha to set up RM80m  automated factory in Penang. EG Industries has joined forces  with Yamaha Motor Co Ltd to set up 5G automated intelligent  surface mount technology production lines for the group's upcoming  smart lights-out manufacturing plant in Batu Kawan, Penang. EG  Industries is expected to invest up to RM80m in phases over 2  years for the implementation and commissioning of the lines.  Yamaha has established a track record of implementing line  automation for lights-out manufacturing in its own manufacturing  plants in Japan as well as other renowned manufacturers in  Southeast Asia. (The Edge)

Yinson: Announces appointment of new board member. Yinson  Holdings has appointed Fariza Ali @ Taib as a non-independent  non-executive director, effective May 31, 2023. Fariza is the head of  the real estate investment market department at the EPF, where  she oversees both global and domestic real estate portfolios,  responsible for managing a total of RM160bn assets under  management that extend across both listed equities and fixed  income. (StarBiz)

MSM: Johor subsidiary completes turnaround initiative. MSM  Malaysia Holdings' unit MSM Sugar Refinery (Johor) SB (MSM  Johor), has completed its second boiler change out works for  sustainable refinery reliability and availability. Hence, MSM Johor  will have unimpeded ability to produce at its effective design  production capacity of 1m tonnes per annum. With the completion  of the second boiler rectification work, MSM Johor is expected to  achieve utilisation factor rate of minimum 50% as the near-term  target with increased local market demand inclusive of added  varieties and exports. (StarBiz)

Pharmaniaga: BP Healthcare eyes stake. BP Healthcare Group,  founded by Datuk Beh Chun Chuan, said the group has expressed  its interest in financially troubled Pharmaniaga. Pharmaniaga is  understood to have received several proposals from interested  parties looking to take a stake and participate in the pharmaceutical  company’s restructuring. The interested parties include institutional  funds, private equity firms and private entities, who are interested in  buying into Pharmaniaga at an attractive price, and to turn around  the concessionaire which supplies generic drugs to public hospitals.  (The Edge)

REDtone: To be transferred to Main Market on May 24. REDtone  Digital's listing status will be transferred to the Main Market from the ACE Market with effect from May 24. The counter will be listed  under the “Telecommunications & Media” sector. REDtone has  been listed on the ACE Market since Jan 2004. The company,  which is a 47.46% subsidiary of Berjaya Corp. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after US stocks ended Monday  on a muted note, with tech shares inching higher, as investors kept  a close eye on US debt ceiling negotiations ahead of a meeting  between President Joe Biden and House speaker Kevin McCarthy  later in the day. The benchmark S&P 500 closed flat, following small  gains earlier in the session, while the technology-heavy Nasdaq  Composite added 0.5%. Both indices had fallen in the previous  session, after US policymakers paused negotiations over the debt  ceiling deal — raising concerns that they will fail to reach a  compromise ahead of the early-June deadline and trigger an  unprecedented default. Biden and McCarthy discussed the debt  ceiling issue over the phone on Sunday. Stocks in Europe struggled  for direction. The region-wide Stoxx 600 ended flat, Germany’s Dax  fell 0.3% and the FTSE 100 added 0.2%. The Eurozone’s consumer  confidence index came in at minus 17.4 in May, lower than forecast  by a Reuters poll of economists, in a sign that high interest rates  and inflation weighed on the region more than expected.

Back home, Bursa Malaysia snapped four consecutive days of  gains to end lower on Monday on continued selling in financial  services and telecommunication counters despite the upbeat  sentiment on regional bourses. At the closing bell, the FBM KLCI  was down 9.54 points to close at 1,419.00 compared with 1,428.54  at last Friday's close. In the region, Hong Kong’s Hang Seng index  gained 1.2%, China’s CSI 300 rose 0.6% and Japan’s Topix added  0.7%. Chinese semiconductor sector stocks jumped after Beijing  banned operators of important infrastructure from buying products  by US chipmaker Micron Technology, saying it posed “serious  network security risks”

Source: PublicInvest Research - 23 May 2023