Economy

EU: Eurozone investor confidence signals economic downturn. Eurozone investor sentiment weakened in August reinforcing the fears of economic downturn as Germany burdens the entire zone with a deep recession. The Sentix investor confidence index fell to -21.5 in Sept from -18.9 in Aug. The score was forecast to ease to -19.6. At -22.0, the current situation index declined from -20.5 in the previous month. The score was the lowest since Nov 2022. (RTT)

EU: Turkey inflation accelerates to 58.9%, highest in 8 months. Turkey's CPI accelerated for the second month in Aug to the highest level in eight months, largely driven by higher food and transport costs. Separate official data showed that producer prices also continued their sharp upturn in Aug. The CPI surged 58.94% YoY in Aug, faster than the 47.83% rise in the previous month. The expected increase was 55.9%. Further, the latest inflation was the strongest inflation since Dec last year, when prices had jumped 64.27%. Prices for food and non-alcoholic beverages grew 72.86% annually in Aug, and the pace of growth quickened from 60.7% in the prior month. (RTT)

EU: Spain unemployment unexpectedly rises in Aug. Spain's unemployment unexpectedly increased in August. The number of registered unemployed increased 24,826 in Aug from the previous month, while it was forecast to fall 21,300. In the same period last year, unemployment posted a monthly increase of 40,428. By economic sectors, the service sector reported the biggest increase of 23,097 in Aug. At the same time, unemployment in industry climbed 2,483 and that in construction advanced 4,792. Meanwhile, unemployment in agriculture decreased 2,874. (RTT)

Australia: Household spending falls for first time since 2021. Australia's household spending declined for the first time since 2021 in July amid the cost-of-living crisis. Household spending dropped 0.7% in July from a year ago, in contrast to the 2.2% increase in June. This was the first decline since Feb 2021. Households have curbed their spending over the past twelve months amid higher interest rates and inflation (RTT)

Japan: Monetary base jumps 1.2% on year in Aug. The monetary base in Japan climbed 1.2% YoY in Aug, coming in at 667.447trn yen. That was well above forecasts for a decline of 0.7% following the upwardly revised 1.3% contraction in July (originally - 1.4%). Banknotes in circulation rose an annual 0.7%, while coins in circulation fell 2.8%. Current account balances gained 1.3% YoY, including a 0.9% gain among reserve balances. The adjusted monetary base surged 19.4% to 660.849trn yen. (RTT)

India: Seeks to fill a China-sized gap in global economic growth. With China increasingly isolated and the US and its allies seeking a developing-market champion, India is having a moment. The tailwinds are there. The USD3.4trn economy is among the fastest growing globally, and India’s population became the largest in the world earlier this year. Prime Minister Narendra Modi’s government has sought to compensate for low private investment by ploughing billions into new infrastructure and using a mix of tariffs and incentives to lure global manufacturers, especially those seeking to diversify away from China. (Bloomberg)

Markets

Dayang Enterprise (Outperform, TP: RM1.85): Secures contract extension for another Pan Malaysia maintenance job. Dayang Enterprise Holdings’ Pan Malaysia contract with Kebabangan Petroleum Operating Company SB (KPOC) to provide maintenance, construction and modification services has been extended by a year and five months till end-2024. The contract has been extended from July 17, 2023, until Dec 31, 2024. (The Edge)

HSS Engineers: Appointed lead consultant for Sultan Abdul Aziz Shah airport master layout plan. HSS Engineers has accepted the appointment by Malaysia Airports SB to be the lead consultant (civil and structural engineer) for the submission of the amendment to the master layout plan of Sultan Abdul Aziz Shah airport as well as subsequent infrastructure and associated works (Phase 2 and 3). The contract, valued at RM68.52m or 7.1% of the total cost works for the project, will run for a period of five years commencing Aug 29, 2023. (StarBiz)

E&O: Morning Crest ceases to be substantial shareholder. Morning Crest SB has ceased to be a substantial shareholder in Eastern & Oriental (E&O) after selling 18.1m shares or a 11.59% stake. Morning Crest, controlled by E&O former executive deputy chairman and managing director Datuk Terry Tham Ka Hon, disposed of the shares via a direct business transaction on Sept 1. Following the transaction, Morning Crest's stake in E&O is down to 3.9% or 60.8m shares, from 5.06% or 78.8m shares. (The Edge)

Chin Hin Group Property: Plans private placement to raise RM102m to fund projects. Chin Hin Group Property has proposed a private placement of RM102.4m to finance the working capital requirements of its property development projects. The placement involves the issuance of up to 110.1m new shares, representing not more than 20% of the group’s issued share capital, to independent investors to be identified later. (The Edge)

Ireka: Partners property developer for RM310m GDV mixed development. Ireka Corp has joined hands with a property development and construction outfit for a mixed development project in Kajang, with GDV of RM310m. The development is expected to commence end-2023 and be completed in six years. The project is to be developed on a 16,517m2 freehold vacant land in Bandar Kajang. (The Edge)

Aeon Credit: Issues RM250m senior sukuk under RM2bn Islamic bond programme. Aeon Credit Service (M) issued a senior sukuk with a nominal amount of RM250m, having a tenure of five years. This is the third tranche of the financial service provider’s sukuk wakalah programme of RM2bn in nominal value. Proceeds from the senior sukuk issuance will be used for financing disbursements to customers, and refinancing any existing loans of the company or any sukuk. (The Edge)

Comintel: To exit PN17 classification following financial regularisation. Comintel Corp will be uplifted from its PN17 classification effective Sept 5 after its regularised financials no longer meet PN17-related criteria. After due consideration of all facts and circumstances of the matter, Bursa Securities has decided to approve the company's application for an upliftment from being classified as a PN17 company. (The Edge)

Market Update

The FBM KLCI might open higher today after Chinese stocks jumped on Monday after Beijing ramped up efforts to reinvigorate the country’s ailing property sector but a European rally faded on fears of eurozone interest rate rises. The CSI 300 index of Shanghai and Shenzhen-listed stocks closed 1.5% higher and Hong Kong’s Hang Seng rose 2.5%, led by sharp gains for developer stocks. The moves came after Beijing announced policies to allow a dozen of China’s largest cities to reduce downpayments for homebuyers and encouraged lenders to cut interest rates on existing mortgages. Meanwhile, shares in Chinese property developer Country Garden surged 14.6% after the company gained approval from its creditors over the weekend to restructure the repayment of an almost RMB4bn ($550mn) bond that had been set to mature on Saturday. The developer will be able to repay the debt in a series of instalments over the course of three years. Bursa Malaysia ended marginally lower on Monday amid continuous mild profit taking in selected heavyweights and bullish sentiment on the regional market. At the closing bell, the FBM KLCI eased 0.71 of a point to end at 1,462.72.

Source: PublicInvest Research - 5 Sept 2023