Economy

US: Trade deficit widens to largest in six months on more imports . The US trade deficit widened in April to the largest in six months as imports picked up and exports declined. The shortfall in goods and services trade grew by USD14bn, or 23% from a month earlier, to USD74.6bn, Commerce Department data showed. The figures aren’t adjusted for inflation. The median estimate in a Bloomberg survey of economists called for a widening to USD75.8bn. (Bloomberg)

EU: Germany industrial output rises less than expected in April . Germany's industrial production grew at a slower than expected pace in April raising possibilities for another economic contraction in the second quarter. Industrial output advanced 0.3% on month, in contrast to the 2.1% decrease in March, data from Destatis showed. The growth rate was well below the expected 0.6%. The manufacture of basic pharmaceutical products surged 6.4%. Meanwhile, motor vehicles output dropped 0.8% and engineering output eased 0.5%. Construction output was up 2.0% after a 2.9% fall. (RTT)

UK: Set to have highest inflation among big economies in 2023 — OECD . Britain will have the highest inflation of any leading economy in 2023, according to forecasts from the Organisation for Economic Co-operation and Development (OECD), which show that Prime Minister Rishi Sunak will miss his promise to halve price growth this year. (Reuters)

Japan: Keeps growth focus but signals end to crisis-mode fiscal largesse. Japan is committed to putting the economy before fiscal reform, Prime Minister Fumio Kishida's government said in its draft mid-year policy framework, while signalling an end to crisis mode stimulus spending to return to one in "peacetime". (Reuters)

Taiwan: Trade surplus grows to USD4.89bn. Taiwan's trade surplus increased notably in May from a year ago, as exports fell much slower than imports, preliminary figures from the Ministry of Finance revealed. The trade surplus climbed to USD4.89bn in May from USD2.12bn in the corresponding month last year. (RTT)

Australia: GDP rises 0.2% in 2Q. Australia's GDP expanded by a seasonally adjusted 0.2% on quarter in the first quarter of 2023, the Australian Bureau of Statistics said. That missed expectations for an increase of 0.8% and was down from 0.5% in the previous three months. On an annualized basis, GDP was up 2.3% - again missing forecasts for a gain of 2,7%, which would have been steady from the three months prior. (RTT)

Markets

Sapura Energy (Underperform, TP: RM0.02): Says extension of restraining orders necessary to finalise restructuring schemes. Cash-strapped Sapura Energy said the nine-month extension of the restraining orders granted to the group and 22 wholly-owned subsidiaries is necessary to finalise the group's proposed restructuring schemes with its financiers and other creditors to resolve its unsustainable debt and overdue payables. The group is currently in the process of further refining the restructuring schemes with the aim of reaching an agreement in principle with the financiers on certain key items. (The Edge)

Revenue Group: Proposes private placement to raise up to RM24.3m. Two months after giving an assurance that its operations remain unaffected amid a boardroom tussle, Revenue Group has proposed a private placement of not more than 10% of its issued shares to raise up to RM24.3m, mainly for working capital. The placement entails the issuance of up to 53.3m new shares to independent third-party investors, the e-payment solution provider said. (The Edge)

PRG Holdings: Unit gets two contracts worth RM20m. A unit of PRG Holdings has obtained two contracts with a combined value of RM20m from two Singapore-based companies. PRG Holdings announced that Measurement & Verification Pte Ltd (a wholly owned subsidiary of Furniweb Holdings, which in turn is a 50.45%- owned subsidiary of PRG) had been awarded the two contracts. The first contract is with Obayashi Singapore Private Limited, a subsidiary of Obayashi Corporation, one of Japan’s largest general contractors, to carry out fit out work. The contract took effect on May 19 and is expected to be completed in Dec. (The Edge)

Kejuruteraan Asastera: Now known as Kinergy Advancement. Kejuruteraan Asastera said the company's change of name to Kinergy Advancement Bhd took effect on June 2 following the receipt of the relevant notice from the Companies Commission of Malaysia. It said the new name, which was proposed on April 6, signifies the company's commitment to expand its sustainable energy solutions (SES) business regionally. (The Edge)

Umedic: Q3 financial results improve. Umedic Group recorded a 48% YoY increase in revenue to RM9.6m and a 58% YoY rise in net profit to RM2.0m or EPS of 0.54 sen for its third quarter ended April 30, 2023. (StarBiz)

Eupe Corporation: Launches Phase 2 of Villa Natura in Sungai Petani. Eupe Corporation (EUPE) launched Phase 2 of Villa Natura at its show village in Sungai Petani, Kedah with a gross development value of RM47.5m. (The Edge)

IPO: MST Golf Group inks IPO underwriting agreement. MST Golf Group has signed an underwriting agreement with RHB Investment Bank for its proposed IPO and listing on Bursa Malaysia’s Main Market in the 3Q of 2023 with the prospectus to be launched by end-June. (StarBiz)

IPO: Glostrext inks underwriting agreement with M&A Securities for IPO. Geotechnical instrumentation service provider Glostrext has inked an underwriting agreement with M&A Securities SB for its IPO in conjunction with its listing on the ACE Market of Bursa Malaysia. (StarBiz)

Market Update

The FBM KLCI might open lower today after US stocks fell on Wednesday dragged lower by tech, while Treasuries slid after an unexpected increase by the Bank of Canada stoked expectations that central banks may not be done raising rates. Wall Street’s benchmark S&P 500 lost 0.4%, pulled down by tech and communications stocks. The tech-heavy Nasdaq Composite fell 1.3%. The Russell 2000 index of small-cap companies rose to its highest level since the US regional banking crisis in March, before slipping 0.3%. The index has risen almost 8% since the end of May, outperforming the S&P 500 and the Nasdaq Composite over the same period, which have both risen 2%. European indices followed Wall Street lower. The region-wide Stoxx 600 ended the day down 0.2% while France’s CAC 40 fell 0.1%. London’s FTSE 100 traded flat. Germany’s Dax finished 0.2% lower after data showed industrial production in the Eurozone’s largest economy rose 0.3% in April, rebounding from the previous month’s contraction but missing economists’ expectations of a 0.6% rise.

Back home, Bursa Malaysia was lower on Wednesday, but closed off its intraday low, dragged down by extended selling pressure from the outflow of foreign funds. At the closing bell, the FBM KLCI had fallen 4.52 points or 0.33% to 1,378.65, from 1,383.17 at Tuesday’s close. The regional equities were mixed, with Hong Kong’s Hang Seng index adding 0.8% but Japan’s Topix off 1.3%. China’s CSI 300 lost 0.5% after data showed Chinese exports contracted more than expected in May, in a further dent to the country’s hopes for a strong economic rebound from the Covid-19 pandemic.

Source: PublicInvest Research - 8 Jun 2023