Economy

US: Job openings unexpectedly jump to 9.6m in Aug. Job openings in the US unexpectedly showed a notable increase in the month of Aug. The job openings surged to 9.61m in Aug from an upwardly revised 8.92m in July. The jump surprised economists, who had expected job openings to edge down to 8.8m from the 8.83m originally reported for the previous month. Job openings in professional and business services shot up by 509,000, while job openings in finance and insurance, state and local government education, nondurable goods manufacturing and federal government also increased. Meanwhile, the report also said the number of hires and total separations were little changed at 5.9m and 5.7m, respectively. Within separations, quits (3.6m) and layoffs and discharges (1.7m) also showed little change over the month. (RTT)

EU: Spain unemployment logs unexpected increase. Spain's unemployment registered an unexpected increase in Sep due to the weakness in the service sector. The number of registered unemployed people increased 19,768 or 0.73% from the previous month. Economists had expected a monthly fall of 12,200 for Sep. Unemployment totalled 2.72m in Sep. However, unemployment decreased by 219,451 from the previous year. Registered unemployment declined in all economic sectors except services, where jobless claims surged by 18,820. Unemployment slid 3,718 in construction and by 2,100 in agriculture. The decrease in industry was 184. Further, data showed that unemployment among people aged below 25 years rose by 17,043 in Aug compared to the previous month. Youth unemployment totalled 205,000, the lowest figure in the last fifteen years. (RTT)

EU: Portugal industrial production falls 4.0%. Portugal's industrial production declined for the sixth straight month in Aug, led by a sharp fall in manufacturing output. Industrial production dropped 4.0% YoY in Aug, which was worse than the 2.8% decrease in July. Excluding energy, industrial output fell 5.2% in Aug compared to a 3.3% decline in the prior month. Manufacturing production alone contracted 5.5%, while mining and quarrying output advanced 7.3%. Among large industrial groups, production in the intermediate goods sector plunged 8.3% from last year, while that in the energy segment showed a rebound of 2.5%. On a monthly basis, industrial production increased 0.7% versus a 0.6% rise in the preceding month. (RTT)

South Asia: To grow more than any other developing country region. The World Bank said South Asia is set to log growth higher than any other developing country region in the world this year. In the latest South Asia Development Update, the World Bank forecast South Asia to expand 5.8% in 2023. However, this would be slower than its pre-pandemic pace and also not sufficient to achieve its development goals. Going forward, as post pandemic rebounds fade amid tighter monetary policy, fiscal consolidation and weak global demand, South Asia will grow at a moderate pace of 5.6% next year and 2025. Countries need to urgently manage fiscal risks and focus on measures to accelerate growth, including by boosting private sector investment and seizing opportunities created by the global energy transition. (RTT)

Japan: Monetary base spikes 5.6% on year in Sept. The monetary base in Japan jumped 5.6% on year in Sep, coming in at JPY669.860trn. That shattered expectations for an increase of 1.6% following the upwardly revised 1.2% increase in Aug (originally 1.1%). Banknotes in circulation rose 0.5% on year, while coins in circulation fell 2.5%. Current account balances jumped an annual 6.9%, including a 6.6% increase in reserve balances. The adjusted monetary base surged 31.5% to JPY676.105trn. For the third quarter of 2023, the monetary base climbed 1.8% on year. (RTT)

India: Manufacturing growth remains strong in Sept. India's manufacturing activity logged a further solid expansion in Sept, as both output and demand showed substantial rises. The manufacturing PMI, dropped to 57.5 in Sept from 58.6 in Aug. However, a reading above 50 indicates expansion in the sector. The expected score was 58.1. New orders grew sharply in Sep on the back of favourable demand trends, positive market dynamics, and fruitful advertising. Nonetheless, the rate of growth slowed in Aug. Consequently, output increased substantially at the start of the third quarter, though it was the softest in three months. (RTT)

South Korea: Surprising output jump eases growth concerns. Aug’s surprising jump in South Korea’s industrial production suggests growth may have more momentum than expected. A sharp increase in semiconductor and machinery manufacturing contributed to the expansion. The fact that the jump came despite falling exports to China indicates that manufacturers are diversifying their customers. The production rebound signals 3Q GDP growth will slow less than we have anticipated and reinforces our view that the BoK will stick to its hawkish hold at October’s meeting. Industrial production rose 5.5% from July, when it declined 2.0%. The result was above the consensus estimate for a 0.2% increase. We had expected a 1.1% contraction. (Bloomberg)

Australia: Services sector returns to expansion in Sept. The services sector in Australia moved back up into expansion territory with a services PMI score of 51.8. That's up from 47.8 in Aug and it moves back above the boom-or-bust line of 50 that separates expansion from contraction for the first time in three months. After a modest fall in Aug, incoming new business returned to growth in the latest survey period. Moreover, the pace of expansion was the most pronounced in fifteen months. This was underpinned by better underlying demand conditions according to survey respondents. Greater tourism activity and increased international student intakes were also mentioned by panelists, which led to higher new export business. (RTT)

Markets

KLK (Neutral, TP: RM21.39): Stake sale by LTAT still pending final decision between transacting parties. The acquisition of a 33% stake in the Boustead Plantations by Kuala Lumpur Kepong Bhd (KLK) from the Armed Forces Fund Board (LTAT) “is pending a final decision between the transacting parties”, the two companies said, noting that the cut-off date for fulfilling the condition precedent is Friday (6 Oct). Both Boustead Plantations and KLK had been queried by the stock exchange to confirm or deny whether the acquisition had fallen through after The Edge, citing anonymous sources, reported that KLK’s RM1.15bn acquisition of the 33% stake had been scrapped after two deadline extensions for the cut-off date, first from 11 Sept to 22 Sept, and later to 6 Oct. (The Edge)

Capital A: AirAsia secures USD150m term loan with guarantee from parent. AirAsia Bhd, the aviation arm of Capital A, has secured a five-year term loan of up to USD150m (approximately RM708.46m). The loan will be used to fund its aircraft and engines maintenance and working capital. The term loan was secured shortly before Capital A is due to submit its regularisation plan to the stock exchange on 7 Oct. Capital A said the term loan was granted by a financial institution with a corporate guarantee from Capital A, which shall remain throughout the term of the term loan. (The Edge)

Malaysia Airports: Sees highest daily passenger movement for 2023 in August amid state elections and holidays. Malaysia Airports Holdings (MAHB) saw 11.2m total passengers movement in August for both its Malaysia and Turkiye airport networks with Malaysia contributing 7.4m passengers while the remaining 3.8m from its Turkiye operations. Local airports in Malaysia also saw the highest average total daily passenger at 240,000 passengers. (The Edge)

NetX and Saudee: To launch fast-food chain. Netx Holdings has entered into a partnership with Saudi Cold Storage SB, a unit of Saudee Group, in a venture into the fast-food consumer market in Malaysia. In a statement, NetX said the business will be carried out by a joint venture company, in which it will own a 51% equity stake while the remaining 49% will be held by Saudi Cold Storage. It said the flaship outlet of the new fast-food chain with the brand name Saudi Burger is scheduled to open in Dec 2023 at Sungei Wang Plaza in Bukit Bintang, Kuala Lumpur. (The Star)

Cuscapi: Hit with RM20m claim over alleged defamatory statements five years ago. Cuscapi has been served with claims of RM20m over alleged defamatory statements it made back in 2018. Cuscapi said that it had received a letter accompanied with a writ of summons and statement of claim from Messrs KS Chew & Associates. The writ of summons and statement of claim named Cuscapi as the first defendant and former principal officer as the second defendant while the plaintiff in the suit refers to Cuscapi’s former chief executive officer (CEO) Her Chor Siong. (The Edge)

Kretam Holdings: Raises stake in Bahvest to 12.22%. Kretam Holdings has raised its stake in Bahvest Resources to 12.22% or 151.49m shares, after a series of transactions on Bursa Malaysia. Kretam said its fully owned subsidiary Innosabah Capital Holdings SB acquired 12.95% or 160.58m shares in the Sabah gold miner (Bahvest) from the open market for RM43.73m shares, or an average of 28.87 sen per share, between Nov 29, 2022 to Oct 2, 2023. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after the yield on 30-year US Treasuries hit a 16-year high on Tuesday, as a sell-off in global bond markets pushed equities down and rocked currencies such as the yen and the rouble. The 30-year US yield reached 4.95% for the first time since 2007 — before the financial crisis — as markets adjusted to the prospect of a long period of high interest rates and governments’ vast borrowing needs. Stock markets fell on both sides of the Atlantic, while the yen briefly breached ¥150 to the dollar and the rouble weakened past 100 against the US currency. Wall Street’s tech-heavy Nasdaq Composite closed 1.9% lower, having fallen more than 2% earlier in the session, while the broader S&P 500 fell 1.4%. Europe’s region-wide Stoxx 600 index declined 1.1%.

Back home, Bursa Malaysia ended slightly higher on Tuesday amid mixed regional markets. At the closing bell, the FBM KLCI edged up 1.25 points to 1,420.01 from Monday’s closing of 1,418.76. Elsewhere, the Hang Seng led the Nikkei 225 lower. They fell 2.69% and 1.64% respectively.

Source: PublicInvest Research - 4 Oct 2023