Economy

US: Jobless aid programs bilked of up to USD135bn during COVID, watchdog says. Up to USD135bn of jobless benefits paid out by US states during the coronavirus pandemic may have arisen from fraudulent claims, Washington’s top government watchdog said in a report suggesting the problem is much bigger than previously estimated. Waves of fraudulent claims for unemployment insurance benefits have episodically inflated the volumes of new filings reported each week to the Labour Department by all 50 states, the District of Columbia, Puerto Rico and the US Virgin Islands, often confounding economists tracking the data for a read on the health of the job market. (Reuters)

EU: German housing construction cancellations at new high. Germany's residential construction sector crisis continued to intensify in Aug with the number of project cancellations hitting a new high, mainly due to rising costs and higher interest rates, a survey from the ifo Institute revealed. In Aug, 20.7% of companies reported cancelled housing projects, up from 18.9% in the previous month, the findings of a survey by the think tank showed. (RTT)

EU: Spain inflation accelerates for second month. Spain's consumer prices inflation climbed for the second month in a row in Aug, while core price growth slowed slightly, latest data from the statistical office INE showed Tuesday. The consumer price index, or CPI, rose 2.6% YoY in Aug following a 2.3% rise in July. Core inflation, which excludes the volatile prices of fresh food and energy, eased to 6.1% from 6.2%. On a MoM basis , the CPI moved up 0.5% following a 0.2% increase in July. Inflation based on the harmonized index of consumer prices, or HICP, accelerated to 2.4% from 2.1%. (RTT)

EU: Portugal inflation unrevised at 3.7%. Portugal's consumer price inflation accelerated, as initially estimated in Aug, the latest data from Statistics Portugal showed on Tuesday. Consumer price inflation rose to 3.7% in Aug from 3.1% in the previous month. That was in line with the flash data published on September 12. The core inflation rate, which excludes energy and unprocessed food products, also moderated to 4.5% in Aug from 4.7% in July. Energy prices decreased at a slower rate of 6.5% annually in Aug versus a 14.9% plunge in the prior month. (RTT)

Japan: Producer prices rise 0.3% on month in Aug. Producer prices in Japan were up 0.3% on month in Aug, the Bank of Japan said. That beat forecasts for an increase of 0.1%, which would have been unchanged from the July reading. On a yearly basis, producer prices climbed 3.2% - in line with expectations and down from the downwardly revised 3.4% increase in the previous month (originally 3.6%). Export prices were up 0.5% on month and down 0.8% on year, the bank said, while import prices slumped 0.9% on month and 15.9% on year. (RTT)

India: Inflation eases more than expected; industrial output growth accelerates. India's consumer price inflation eased more than expected in Aug, data published by the National Statistical Office showed. Underpinned by robust growth in mining and electricity, industrial production growth accelerated more-than expected in July. The consumer price index posted an annual increase of 6.83% in Aug, slower than the 7.44% increase in July. In the same period last year, inflation stood at 7.00%. Inflation was expected to ease to 7.00% in Aug. (RTT)

South Korea: Export prices slump 7.9% on year in Aug. Producer prices in Japan were down 7.9% on year in Aug, the Bank of Japan said moderating from the 12.8% drop in July. On a monthly basis, prices climbed 4.2%. Individually, export prices for agricultural products fell 1.0% on month and 14.6% on year, while manufacturing products added 4.2% on month and fell 7.9% on year. Import prices rose 4.4% on month and slumped 9.0% on year. Individually, prices for raw materials were up 7.2% on month and down 14.5% on year, while intermediate goods rose 3.7% on month and lost 8.2% on year, capital goods gained 1.6% on month and 1.3% on year and consumer goods gained 1.9% on month and shed 3.0% on year. (RTT)

Markets

MyEG: Illegally renewing workers permits . Malaysia government's electronic services provider MY E.G. Services (MyEG) was alleged to be renewing workers permits illegally till today. Khoo Poay Tiong (Kota Melaka-PH) said the companies were still being allowed to do so even though the service had been terminated by the government. He said that companies were able to renew foreign worker and maid worker permit renewals as advertised on their website. (New Straits Times)

Sunway: Gets Singapore land for condo project . Sunway, via a joint-venture with Hoi Hup Realty Pte Ltd, has been awarded a land parcel in Singapore to develop a condominium at Tengah Plantation Close, Singapore. Singapore’s Housing and Development Board awarded the land parcel for a 99-year lease term executive condominium development at USD348.5m to Hoi Hup and Sunway Developments Pte Ltd (SDPL), following a tender process. (StarBiz)

Hektar REIT: In RM150m academic building purchase . Hektar Real Estate Investment Trust (REIT) has proposed to acquire buildings from KYS College SB for RM150m. The proposed acquisition is to acquire one-half, two and three-storey buildings categorised into administration, academic, residential and student facilities forming part of the fully residential and co-educational private school known as Kolej Yayasan Saad in Ayer Keroh, Melaka. (StarBiz)

Hong Seng: Terminates Penang land lease after suspending glove venture . Hong Seng Consolidated has terminated its plan to sub-lease industrial land at Penang’s Prai Bulk Cargo Terminal from Penang Port SB (PPSB), signaling the end of its venture in the glove-making industry due to the weak market sentiment in the industry. The sub-lease, spanning an area of approximately 12,140 sq m (approximately 3 acres) was originally intended for a 20-year term with a total rental payment of RM8.53m. (FMT)

SCIB: Sarawak Consolidated and MRT Jakarta Collaborate on transit-oriented development projects . Sarawak Consolidated Industries (SCIB) has signed a MoU with PT MRT Jakarta (Perseroda) to explore potential partnership opportunities for Transit Oriented Development Area projects. The MoU outlines a framework for discussions, data exchange, and related matters. The agreement is initially valid for one year and can be extended by mutual agreement. (The Malaysian Reserve)

Betamek: Terminates MOU with Singapore’s Krakatoa to develop battery management system for EVs . Betamek has terminated its MOU with Singapore-based semiconductor company Krakatoa Technologies Pte Ltd to develop a battery management system-on-a-chip for EVs. The EMS provider said that its wholly-owned unit Betamek Electronics (M) SB (BESB) had given Krakatoa three months' notice of termination as stated within the MOU. (The Edge)

Berjaya Land: Berjaya Rail appoints Johor’s Tun Aminah as chairperson . Berjaya Rail SB, the rail arm of Berjaya Land (BLand), has appointed the daughter of Sultan of Johor, Tunku Tun Aminah Sultan Ibrahim Ismail, as its chairperson. The property and hospitality company said Tun Aminah, who holds a 30% stake in Berjaya Rail, brings a wealth of experience from her leadership roles in various private companies. (The Edge)

Market Update

The FBM KLCI might open lower today after US stocks declined and oil prices hit 2023 highs on Tuesday, stirring investors’ concerns about mounting price pressures a day before the release of the closely watched US inflation report. Wall Street’s benchmark S&P 500 slipped 0.6%, as declines for Apple and several other big tech stocks outweighed an advance for oil and gas companies. The Nasdaq Composite fell 1%. Oil prices surged further on Tuesday, after Opec in its monthly report forecast a tighter supply outlook and growing demand in 2024. Brent crude, the international benchmark, settled 1.6% higher to $92.06 per barrel on Tuesday and US marker West Texas Intermediate added 1.8% to $88.84. Both prices reached their highest level since November 2022. In Europe, the region-wide Stoxx Europe 600 gave up early gains to end the day 0.2% lower.

Back home, Bursa Malaysia closed slightly lower amid mixed regional market sentiments as investors awaited the US inflation data. At the closing bell, the FBM KLCI fell 1.65 points to 1,453.39 from 1,455.04 at Monday's close. The regional equities were mixed, with Hong Kong’s Hang Seng index down 0.4% and China’s CSI 300 losing 0.2%, while Japan’s Topix rose 0.8%.

Source: PublicInvest Research - 13 Sept 2023