Economy

US: Yellen upbeat on US economy, says Bidenomics is driving investment, job growth . Treasury Secretary Janet Yellen made a robust pitch in the swing state of Nevada that President Joe Biden's policies are powering historic job growth and rebuilding competitiveness, despite polls showing Americans remain skeptical. Speaking at a union hall just off the famous Las Vegas strip, Yellen underscored the importance of the climate-focused Inflation Reduction Act, which marks its anniversary on Wednesday, especially in a summer that has made headlines with record heat and climate change-related disasters. "It’s our nation’s boldest-ever climate action. And it is beginning to spark an economic renaissance in communities that had been left behind," Yellen said. (Reuters)

US: Fed playing waiting game to try to avoid a recession. An increasing number of economists — including the US Fed’s own staff — are predicting the US will escape a recession, though it’ll be well into 2024, before anyone can be sure of it. Fed chair Jerome Powell said he expects the central bank to navigate a path where the US economy expands with inflation rates falling back to the 2% target, though the task will be challenging. On one side, a failure to act aggressively enough against price pressures could result in rebounding inflation that requires harsher moves later. There’s also the risk that the lagged effects of what’s already the most aggressive tightening in four decades could tip the economy into a recession. (Bloomberg)

EU: Germany wholesale prices continue to fall in July . Germany's wholesale prices continued to decline in July, figures from Destatis showed. Wholesale prices posted an annual decline of 2.8% in July but slightly slower than the 2.9% fall in June. This was the fourth consecutive decline in prices. The annual fall largely reflects 20.8% decrease in the wholesale prices of petroleum products. Similarly, wholesale prices of waste and scrap were down 32.8%. On the other hand, fruits and vegetable prices increased 27.5%. MoM, wholesale prices dropped 0.2%, the same pace of decline as seen in June. (RTT)

India: Inflation rises to 15-month high as food costs rise . India's consumer price index (CPI) rose to a 15-month high of 7.44% from a year earlier, according to government data on Aug 14. That’s faster than a median forecast for a 6.5% gain in a Bloomberg survey of economists, and a revised reading of 4.87% in June. Retail inflation in July breached the upper-end of the Reserve Bank of India’s (RBI) tolerance level for the first time in five months due to surging food costs, reinforcing the central bank’s concern over uneven monsoon rains affecting crop production. (Bloomberg)

Indonesia: Behind Indonesia’s 5% growth lies a less rosy economic picture . Indonesia’s growth performance last quarter is poised to top most of its peers in Southeast Asia, but its path ahead is tricky, amid widening cracks in the economy after the pandemic. While its latest GDP print shows a consumption boom that’s hovering near levels a decade before the pandemic, it has largely left behind lower-income households beset by low wages and limited opportunities. Without the spending on major Muslim holidays that propped up growth in Southeast Asia’s largest economy to 5.2% in the April-June period, economists expect a deceleration to 5%, then 4.9% in the next two quarters. (Bloomberg)

Singapore: Warns of ‘unpredictable’ risks amid US-China tensions . Singapore’s prime minister-in-waiting called for the global economy to be “prepared for the unpredictable”, amid strained relations between the US and China over matters of trade and geopolitics. “Intense, extreme competition will be the defining feature in the bilateral relationship,” Deputy Prime Minister Lawrence Wong said, referring to ties between the world’s two largest economies. He was speaking at a conference Reinventing Destiny in Singapore. (Bloomberg)

Singapore: Flags ‘structural decline’ without migrant workers . Singapore’s declining birth rate and its ageing population require a sustained yet well calibrated influx of migrant workers, according to Deputy Prime Minister Lawrence Wong. “If we are not able to bring in immigrants to top up the population, then we are in structural decline, and eventually the population will decline, the workforce will decline, and Singapore will decline,” Wong said at the Reinventing Destiny conference in Singapore. (Bloomberg)

Markets

Astro (Neutral, TP: RM0.70): Secures RM400m term loan from Sumitomo Mitsui to refinance debts. Astro Malaysia Holdings’ wholly-owned unit Measat Broadcast Network Systems SB (MBNS) secured a term loan facility of up to RM400m Sumitomo Mitsui Banking Corp Malaysia. The facility is to refinance the existing term loan facility of RM380m obtained from SMBC on Aug 9, 2018. (The Edge)

Country Heights: Defaults on RM181m payment for Islamic financing facilities. Country Heights Holdings, the property developer founded by tycoon Tan Sri Lee Kim Yew, has defaulted on the payment of Islamic term financing facilities totalling RM181.1m provided by MBSB Bank. Country Heights attributed the default to differences in cash flow timing due to delays in client payments, resulting in a temporary cash flow constraint. (The Edge)

Iris: Says NIISe contract with Home Ministry terminated with immediate effect. Iris Corp said the Ministry of Home Affairs had cancelled its contract for the National Integrated Immigration System (NIISe), with immediate effect. I t said its wholly owned Iris Information Technology Systems Sdn Bhd (IITS), the appointed developer of the new immigration system which Iris is in the midst of selling an 80% stake in, received a notice of termination dated Aug 10 from the ministry. (The edge)

Sunway: Unit inks share transactions agreement with IASB and SIDSB. Sunway’s wholly owned unit Sunway City SB (SunCity) today inked a share transactions agreement with Iskandar Assets SB (IASB) and Sunway Iskandar Development SB (SIDSB). It said consequent to the completion of the proposed acquisition and redemption of non-convertible non-cumulative redeemable preference shares (NCRPS), SIDSB will become a wholly owned subsidiary of SunCity. (StarBiz)

Coraza: Buys land in Penang for expansion. Coraza Integrated Technology has acquired a parcel of freehold land in Penang for RM17.7m to boost its production capacity. The land, measuring 8,538sqm, has offices and factories erected on it. (The Edge)

Harn Len: Explores partnership in pineapple business. Harn Len Corp has entered into an agreement with Jutawan Enterprise to explore a collaboration in the pineapple plantation business. (StarBiz)

GFM Services: Seeks transfer to Main Board. GFM Services has proposed to transfer from the ACE Market of Bursa Malaysia to the Main Market. Its group managing director Ruslan Nordin said the proposed transfer opens up new avenues to boost its visibility and credibility, garnering recognition from potential investors, particularly institutional shareholders. (BTimes)

Carlo Rino: Proposes transfer to ACE Market. Carlo Rino Group, which listed on the Leading Entrepreneur Accelerator Platform (LEAP) on Nov 2018, is now eyeing a transfer to the ACE Market on Bursa Malaysia. (The Edge)

Market Update

The FBM KLCI might open higher today after Wall Street stocks rose on Monday as investors prepared for data and earnings reports from the US retail sector this week, hoping to gauge the mood of the American consumer. The benchmark S&P 500 finished 0.6% higher, led by tech stocks, while the tech-focused Nasdaq Composite added 1.1%. The Federal Reserve on Wednesday will release minutes from its July meeting, which will provide insight into its members’ decision to raise the federal funds rate to its highest level in 22 years. In Europe, the region-wide Stoxx Europe 600 closed 0.2% higher, after switching between minor gains and losses throughout the day. Germany’s Dax rose 0.5% and France’s Cac 40 finished 0.1% higher.

Back home, Bursa Malaysia reversed most of its earlier losses to end mixed on Monday on late buying of selected financial services, telecommunications and media counters, amid weak sentiments on regional stock markets. At the closing bell, the FBM KLCI had eased 0.16 of a point to 1,457.0, from 1,457.16 at last Friday’s close. Equities were down in the region, as China’s flagging property sector heightened investors’ concerns over the health of the world’s second-largest economy as it reopened after three years of severe Covid-19 lockdowns. Over the weekend Chinese property developer Country Garden suspended trading in at least 10 of its mainland bonds. The company, once the largest developer in China by sales, missed international bond payments last week, bolstering investor fears that a two-year liquidity crisis across the country’s real estate sector was threatening to escalate. Hong Kong’s Hang Seng index fell 1.6%, with the Hang Seng Mainland Properties index — which tracks China’s real estate developers — down 3.7%. In mainland China, the benchmark CSI 300 dropped 0.7%. Elsewhere in Asia, Japan’s Topix lost 1% and South Korea’s Kospi slipped 0.8%.

Source: PublicInvest Research - 15 Aug 2023