Economy

US: Wholesale inventories dip slightly more than expected in July. A report released by the Commerce Department 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. Meanwhile, the Commerce Department said wholesale sales advanced by 0.8% in July after sliding by 0.8% in June. (RTT)

EU: Eurozone to undergo slower growth on subdued domestic demand, tight policy. The euro area economy is set to log a weaker-than-estimated growth this year and next as rising consumer prices continue to weigh on domestic demand and monetary policy tightening works its way through the economy. In the summer interim forecast, the European Commission said the 20-nation currency bloc will grow 0.8% in 2023, which was revised down from 1.1% projected in the Spring Forecast. (RTT)

EU: Italy industrial production falls 0.7%, more than forecast. Italy's industrial production decreased for the first time in three months in July, and at a faster-than-expected rate, the statistical office ISTAT showed. Industrial production dropped 0.7% MoM in July, reversing a 0.5% increase in June. Meanwhile, production was forecast to fall by 0.3%. All components contributed negatively in July, except energy production, which grew 3.7%. Production of consumer goods fell the most, by 1.6% over the month, closely followed by capital goods with a 1.5% decrease. (RTT)

EU: Dutch exports fall further in July. Exports in the Netherlands declined for the fourth straight month in July, according to figures published by the statistical office CBS. Exports dropped 0.9% YoY in July, following a 1.0% rise in the previous month. The nation exported fewer chemical and metal products in July, the agency said. At the same time, shipments of machinery and equipment advanced from last year. Data showed that the volume of imports was 2.2% higher in July compared to a year ago. Citing its export radar, the CBS said conditions for exports in Sept were more unfavourable than in July, mainly due to the fact that German producer confidence was more negative, and the growth of German industrial production turned into a contraction. (RTT)

China: Easing of property market curbs gives Beijing home sales a boost. New home sales in Beijing jumped last week, keeping property showrooms open late into the night to meet demand, a sign of government efforts to revive the sector are yielding some results in the Chinese capital if not elsewhere in the country. A survey by real estate research firm China Index Academy showed new homes transactions in Beijing rose 16.9% by area sold in the week of Sept. 4-10 from the previous week even as they fell 20% on average across the country. (Reuters)

China: Inflation to rebound on economic recovery. China's consumer price inflation is set to rebound further over the coming months as the economy is set to recover moderately driven by policy measures, Capital Economics' economists said. Official data released over the weekend showed that consumer prices climbed 0.1% annually in Aug, reversing a 0.3% drop in July, which was the first decline since Feb 2021. Beijing has set an inflation target of around 3% for this year. (RTT)

Japan: Machine tool orders plunge 17.6%. Japan's machine tool orders declined for the eighth straight month in Aug largely due to weak domestic demand, preliminary data from the Japan Machine Tool Builders Association, or JMTBA, showed. Machine tool orders plummeted 17.6% YoY in Aug, though slower than the 19.7% fall in the previous month. Domestic demand was 31.1% lower in Aug compared to last year, and foreign orders contracted 9.1%. On a monthly basis, machine tool orders rose 0.4% in Aug, compared with a 6.4% decline in the prior month. (RTT)

Markets

CIMB Group (Outperform, TP: RM6.70): Targets RM100bn "green" financing by 2024, revised from RM60bn . CIMB Group Holdings has raised its sustainable finance target to RM100bn by 2024 under the company's green, social, sustainable impact products and services (GSSIPS) framework. The target was revised after the group achieved its RM60bn target announced in 2022. To date, CIMB has mobilised around RM70bn in sustainable finance since 2021. (New Straits Times)

Serba Dinamik: Liquidator to hold meeting of contributories on 10 Oct . Serba Dinamik Holdings (SDHB)’s liquidator has set 10 Oct as the date for the meeting of contributories to provide a status update of the company’s liquidation, and consider the appointment of a Committee of Inspection. Contributories are entities liable to help with adding to the assets of the companies that are being wound up. (The Edge)

KLK: KLK inks agreement with Boustead and LTAT for 22 Sept cut-off date for BPlant deal . Kuala Lumpur Kepong Bhd (KLK) has entered into a LoA with Boustead Holdings (BHB) and the Armed Forces Fund Board (LTAT) to agree for the cut-off date for a strategic collaboration agreement (SCA) to be 22 Sept or such other date as may be agreed in writing between KLK, BHB and LTAT. (The Edge)

UEM Sunrise: To sell Kiara Bay land for RM85m, keep development rights . UEM Sunrise is disposing of a 4.01-acre parcel of land in Kiara Bay, KL for RM85m to repay its debt obligations and fund its working capital for new product launches. UEM Sunrise’s indirect unit Mega Legacy (M) SB (MLSB) is selling the land to Pembinaan Kery SB (PKSB), a unit of Melati Ehsan Holdings. (The Edge)

Artroniq: Signs transformative distribution agreement with PT. Terang Dunia Internusa . Artroniq’s wholly-owned subsidiary, Artronic Itech SB has entered into a transformative distribution agreement with Indonesia-based PT. Terang Dunia Internusa, the parent company of United Motors. The deal aims to propel Artroniq and PT. Terang to the forefront of the burgeoning electric vehicle market while enhancing their reach across the Asean economic community. (StarBiz)

OCK: To raise RM700m via sukuk murabahah issuance . OCK Group has issued sukuk murabahah pursuant to its Islamic medium-term notes programme of up to RM700m in nominal value over a tenure of 30 years. The telecommunications network solutions provider said in a statement that the proceeds raised from the issuance will be used to finance general working capital and capital expenditure and to restructure existing borrowings along with other general corporate purposes. (StarBiz)

Sarawak Energy: Unveils battery energy storage plan . Sarawak Energy has embarked on a pilot 60 MW battery energy storage system (BESS) at its Sejingkat coal fired power plant here. According to Sarawak Premier Tan Sri Abang Johari Tun Openg, the BESS will provide critical grid services, such as peak shaving as well as spinning reserve and optimise generation assets to minimise the carbon emissions associated with traditional power generation. (StarBiz)

Market Update

The FBM KLCI might open higher today after US stocks rose on Monday as a jump in Tesla shares led a rally in megacap tech stocks, while investors awaited the closely watched US inflation report later this week. Wall Street’s benchmark S&P 500 finished 0.7% higher on Monday, while the tech-focused Nasdaq Composite gained 1.1%. Europe’s region-wide Stoxx 600 rose 0.3 %, lifted by gains in the basic materials sector, which was boosted by positive economic data from China at the weekend. France’s Cac 40 added 0.5% and Germany’s Dax advanced 0.4%. Investors in Europe prepared for a busy week of economic data releases and an interest rate decision from the European Central Bank on Thursday. While the majority of market participants still think the ECB will keep its policy unchanged in September, firmer energy prices and hawkish remarks from policymakers last week lifted the probability of a rate increase to 40%.

Back home, Bursa Malaysia's FBM KLCI pared losses and eked out marginal gains at the close on Monday, on the back of financial counters amid a mixed regional performance dampened by worries over China’s property sector. At the closing bell, the KLCI added 0.09 of a point to 1,455.04 from 1,454.95 at Friday’s close. In China, the benchmark CSI 300 index added 0.7% after Saturday’s inflation data showed consumer prices rose 0.1% in August, following July’s deflationary figures. But Hong Kong’s Hang Seng index slid 0.6%, dragged lower by steep declines in property stocks as new home sales in China’s biggest cities shrank by half in the first week of this month.

Source: PublicInvest Research - 12 Sept 2023