Economy

US: Wholesale inventories dip slightly more than expected in July. A report released by the Commerce Department on showed a modest decrease by US wholesale inventories in the month of July. The Commerce Department said wholesale inventories dipped by 0.2% in July after falling by a revised 0.7% in June. Economists had expected wholesale inventories to edge down by 0.1% compared to the 0.5% decrease originally reported for the previous month. The modest decline in wholesale inventories came as a 0.3% drop by inventories of durable goods more than offset a 0.1% uptick in inventories of non-durable goods. (RTT)

EU: Germany inflation eases to 6.1% as estimated. Germany's inflation slowed marginally in Aug as estimated but the rate remained elevated due to the increases in energy and food prices, final data from Destatis revealed. CPI slowed to 6.1% in Aug from 6.2% in July. The statistical office confirmed the provisional estimate published on Aug 30. "The increases in energy and food prices exceed overall inflation and keep the inflation rate high," Federal Statistical Office President Ruth Brand said. "The base effect stemming from last year's 9-euro ticket was also apparent in Aug, when it drove inflation up and reduced the dampening effect of the Germany ticket on prices," she added. (RTT)

EU: Spain industrial output declines at slower pace. Spain industrial output declined at a slower pace in July despite sharp fall in energy and durable consumer goods production, the statistical office INE reported. Industrial output declined by adjusted 1.8% in July from a year ago, which was slower than the 3.2% decrease in June. Output was expected to drop 2.0%. On an unadjusted basis, the annual decrease in industrial production worsened to 1.8% from 1.5% in June. (RTT)

UK: Job placements drop on weaker economic outlook. UK permanent job placements declined the most in over three years in Aug as weaker economic outlook weighed on hiring policy, while candidate availability continued to increase, a survey report compiled by S&P Global showed. Permanent staff appointments decreased at the fastest rate in over three years in Aug, the KPMG/REC Report on Jobs said. At the same time, temp billings fell for the first time since July 2020. Respondents said firms were hesitant to take additional staff and adopted recruitment freezes due to weaker economic climate. (RTT)

China: Deflation pressures ease, more steps expected to spur demand. China's consumer prices returned to positive territory in Aug while factory-gate price declines slowed, data showed, as deflation pressures ease amid signs of stabilisation in the economy. But analysts say more policy support is needed to shore up consumer demand in the world's second-biggest economy, with a labour market recovery slowing and household income expectations uncertain. (Reuters)

Japan: Yen rises after Ueda comments on wage growth and negative rates. The yen advanced against all Group-of-10 currencies as traders mulled potentially hawkish comments from Bank of Japan Governor Kazuo Ueda on the negative interest rate policy. Ueda told the Yomiuri newspaper it’s possible the BOJ will have enough information by year-end to judge if wages will continue to rise a key factor in deciding whether or not to end its super-easy policy. Still, the central bank chief also said the BOJ is some distance away from achieving its price stability target and would continue its patient monetary easing. (Bloomberg)

Indonesia: Consumer confidence rebounds in Aug. Indonesia's consumer confidence strengthened in Aug after weakening in the previous two months amid improvement in the assessment of the current situation as well as the outlook, survey data from Bank Indonesia showed. The consumer confidence index climbed to 125.2 from 123.5 in July. The current conditions index rose to 115.5 from 113.8 in the previous month. The expectations measure increased to 135.0 from 133.2 in July. All component index of the survey increased, particularly the sub-index reflecting the sentiment on purchasing durable goods. (RTT)

Taiwan: Trade surplus grows sharply in Aug. Taiwan's foreign trade surplus increased markedly in Aug from a year ago as imports fell much faster than exports, preliminary figures from the Ministry of Finance revealed. The trade surplus climbed to USD8.59bn in Aug from USD2.99bn in the corresponding month last year. The surplus also grew from USD8.47bn in July. Exports fell 7.3% YoY in Aug, which was slower than the 10.4% plunge in the prior month. Economists had forecast an 8.05% fall. (RTT)

Markets

KNM: Signs deal to sell FBM Hudson at a loss of RM95m. KNM Group, which is in the midst of a boardroom tussle, is selling its interest in FBM Hudson Italiana SPA for RM110.18m (EUR22m) at a loss of RM95m. FBM Hudson is a designer and manufacturer of heat exchangers and high-pressure equipment for oil and gas, chemical, petrochemical, oil refining, power and fertiliser. KNM Group's subsidiary KNM Europa BV has entered into a conditional share purchase agreement with Petro Mat FZCo to dispose of its 100% equity interest in FBM Hudson. (New Straits Times)

AAX: Promotes Fam Lee Ee as deputy chairman. AirAsia X (AAX) has promoted its non-independent non-executive director Datuk Fam Lee Ee as deputy chairman effective Friday. Fam, 61, has served on the board of AirAsia X since March 2008, according to its annual reports. The lawyer by profession also serves as non executive director of AAX’s sister company Capital A. The low-cost, long-haul carrier has been profitable since 2H2022, riding on the back of booming demand post-pandemic seen across the global aviation industry. (The Edge)

E&O: Executive chairman and executive director increase their stake via conversion of ICULS. Eastern & Oriental (E&O) saw its executive chairman and executive director increase their stake in the group with the conversion of irredeemable convertible unsecured loan stocks (ICULS) to ordinary shares. Kerjaya Prospek Development (M) SB, a wholly-owned subsidiary of Kerjaya Prospek Group, saw its shares in E&O rise by 100m to 114.93m shares on 6 Sept. (The Edge)

PMC: Acquires A&W Malaysia 49% equity for RM69.4m. PMC Group had entered into a conditional sale and purchase agreement with Inter Mark Resources SB to acquire the remaining 49% equity interest in A&W (Malaysia) SB for a purchase consideration of RM69.45m. The group aims to satisfy the purchase via a combination of cash payment of RM41.67m and the issuance of new ordinary shares in the group at an issue price of RM0.25 per Consideration Share. (BTimes)

Iqzan: To appeal 19 Sept delisting, but suspension on 15 Sept to proceed. Iqzan Holding plans to submit an appeal to Bursa Securities on the bourse regulator’s decision to delist the company on 19 Sept. The wooden crate and pallet maker said that upon submission of the appeal and pending Bursa Securities’ decision, the company’s delisting will be deferred. Iqzan will have to submit an appeal by 14 Sept for it to be considered by Bursa Securities. (The Edge)

TT Vision: Khazanah Nasional sells 4.62% stake in TT Vision for RM26m. Khazanah Nasional has disposed of a 4.62% stake in ACE Market-listed TT Vision Holdings for RM25.92m. According to a bourse filing on Friday, the sovereign fund sold a 1.41% stake or 6.6m shares, and a 3.21% stake or 15m shares on Tuesday. The shares were sold in direct business transactions via Malaysian Technology Development Corp SB. (The Edge)

Market Update

The FBM KLIC might open higher today after US stocks edged higher on Friday, but had a weekly decline alongside global equities that have slipped in recent sessions as investors assess the outlook for regional economies and interest rates. Wall Street’s benchmark S&P 500 finished 0.1% higher on Friday, losing 1.3% in the holiday shortened trading week. The tech-focused Nasdaq Composite climbed 0.1%, trimming decline across the past four sessions to 1.9%. The weekly losses are partly due to stock market heavyweight Apple enduring a two-day sell-off that wiped almost $200bn from its market capitalisation following reports the Chinese government was planning to broaden a ban on iPhone use. Shares of the tech group edged 0.3% higher on Friday. The FTSE All World index finished flat after three straight days of declines that left it down 1.3% for the week. On Friday, Europe’s broad Stoxx 600 index closed 0.2% higher to end a seven-session losing streak. The advance was helped along by energy stocks, which continued to track the rising price of oil.

Back home, Bursa Malaysia extended Thursday's losses to end lower on Friday, in line with weaker regional market sentiment, due to growing concerns over the bearish economic outlook. At the closing bell, the FBM KLCI had declined 5.12 points to settle at 1,454.59, from 1,460.07 at Thursday’s close. The regional markets edged lower on Friday, with China’s benchmark CSI 300 down 0.5%, while Japan’s Topix fell 1%. Hong Kong markets were shut because of storms and flooding.

Source: PublicInvest Research - 11 Sept 2023