Economy

US: Small business sentiment declines moderately. US small business sentiment declined slightly again in Sept on continued concern over inflation and persistent labor shortages. The Small Business Optimism Index fell half a point last month to 90.8, according to the National Federation of Independent Business (NFIB). The index in Sept also remained below its 49-year average of 98 points for the 21st-straight month. (Reuters)

US: Housing industry urges Powell and the Fed to stop raising interest rates. Top real estate and banking officials are calling on the Fed to stop raising interest rates as the industry suffers through surging housing costs and a historic shortage of available homes for sale. The officials voiced their worries about the direction of monetary policy and the impact it is having on the beleaguered real estate market. (CNBC)

EU: Hungary inflation decelerates to 15-month low. Hungary's inflation decelerated to a 15-month low in Sept due to a notable fall in fuel prices. Consumer prices climbed 12.2% YoY in Sept, the Hungarian Central Statistical Office said. Inflation was forecast to ease to 12.5% from 16.4% in Aug. The rate was the weakest since June 2022, when inflation stood at 11.7%. Nonetheless, inflation continued to remain well above central bank's target of 2-4%. Core inflation weakened to 13.1% from 15.2% a month ago. The rate was also below economists' forecast of 13.6%. (RTT)

EU: Norway inflation slowest since early 2022. Norway's CPI slowed more-than-expected to the weakest since early 2022, easing pressure on the central bank to hike the interest rate further. Consumer prices registered an annual increase of 3.3% in Sept after climbing 4.8% in Aug. The rate was slower than economists' forecast of 4.0% and also the weakest since Jan 2022, when prices were up 3.2%. Norges Bank aims to keep CPI close to 2% over time. In Sept, the bank had raised the benchmark rate by 25bps to 4.25% and hinted at another hike in Dec. (RTT)

UK: Retail sales growth weakens in Sept. UK retail sales growth slowed in Sept as households reduced spending on big ticket items. Retail sales advanced 2.7% on a yearly basis compared to an increase of 4.1% in Aug. In the same period last year, sales advanced 2.2%. Food sales posted an annual growth of 7.4%, while non-food sales were down 1.2%. (RTT)

UK: Grocery inflation eases to lowest level since July 2022. British grocery inflation eased to its lowest rate for 15 months heading into Oct, providing more relief for shoppers hurt by high prices and for the government whose key economic pledge is to bring inflation down. Annual grocery inflation was 11% in the four weeks to 1 Oct, down from 12.2% in its Sept report. All of the country’s major supermarket groups have cut the prices of essential products in recent months. Market leader Tesco said last week it had reduced the prices on 2,500 products in its first half and predicted food inflation would continue to fall in the second. (Reuters)

Japan: 2.279trn yen current account surplus in Aug. Japan posted a current account surplus of 2.279trn yen in Aug. That was shy of expectations for a surplus of 3.091trn yen following the 2.771trn yen surplus in July. Exports were down 2.6% on year at 7.893trn yen, while imports slumped an annual 18.2% to 8.643trn yen for a trade deficit of 749.5bn yen. (RTT)

Markets

Sapura Energy (Underperform, TP: RM0.035): Says Singapore EPCI contract terminated by Shell. Sapura Energy said a contract for the engineering, procurement, construction and installation (EPCI) of the single buoy mooring (SBM) Pipeline Rejuvenation Phase II Project in Singapore has been terminated. The contract had been initially bagged together with its consortium partner Dredging International Asia Pacific back in 2020, and formed part of a larger cluster of contracts worth RM766m. (The Edge)

Perak Transit: Unit gets MOF nod for investment tax allowance in Bidor Sentral project. Perak Transit has secured approval from the MOF for an investment tax allowance (ITA) on qualifying capital expenditure in relation to the development of an integrated public transportation terminal in Bidor, Perak. The company has been granted a 50% ITA on qualifying capital expenditure, which can be applied as a deduction against 50% of the statutory income for the year of assessment in respect of the bus terminal activity only. (The Edge)

Bina Puri: Unit gets winding-up petition. Bina Puri Holdings announced that its wholly owned subsidiary Bina Puri SB (BPSB) has been served with a winding-up petition from the lawyers of Thai Soon Hang (Sabah) SB at the High Court of Sabah and Sarawak, due to a default payment amounting to RM198,116.60. (The Edge)

PTT Synergy: Acquires development land in Penang for RM70.6m. PTT Synergy Group has entered into a sale and purchase agreement (SPA) to acquire two parcels of freehold development land for RM70.6m via indirect wholly owned subsidiary Projek Tetap Teguh SB (Projek TT). The 7.28 ha of land is located in Seberang Perai Selatan, Penang. (The Edge)

Focus Lumber: Secures rights to harvest 5,000 ha of Sabah’s Sungai Pinangah Forest Reserve until 2097. Focus Lumber has entered into an industrial tree planting agreement (ITPA) with Rakyat Berjaya SB (RBSB) to plant, rehabilitate and harvest forests in a 5,000-ha area in Sabah’s Sungai Pinangah Forest Reserve. Through the agreement, Focus Lumber will have access to forests until Sep 2097. (The Edge)

ITMAX: Clinches RM79.6m smart city contract from Pasir Gudang City Council. ITMAX System has secured a RM79.6m contract from Pasir Gudang City Council, Johor, to design, install and maintain a smart command centre, a closed-circuit camera system with AI features, as well as a smart traffic lights system within the district. The company has secured a letter of award (LOA) for the 15-year project. (The Edge)

Digistar: Sells Melaka land at loss. Digistar Corp is selling two parcels of freehold land in Melaka for RM7.76m cash. The land, measuring a combined 4.1197 ha, is a vacant agricultural land. The group is expecting a loss of RM98,000 arising from the land sales. (The Edge)

AWC: Secures RM100m Islamic loan to fund 49% stake buy in waste collection system provider. AWC has secured Islamic banking facilities of up to RM100m from AmBank Islamic. The amount will be used to finance the acquisition of a 49% equity stake in automated waste collection system provider Stream Group SB. AWC is buying the remaining 49% stake it does not own in Stream Group, for RM110m. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks rose for a third straight session and bonds had their best day since August, after optimism built that the Federal Reserve’s campaign to raise interest rates is winding down. The broader US stock market finished higher Monday, with the Dow Jones Industrial Average and S&P 500 each rising 0.6% while the Nasdaq Composite edged up 0.4%. European stocks also finished up Tuesday, with the Stoxx Europe 600 index growing 1.96% to 452.48. The French CAC 40 index rose 2.01% to 7,162.43, the German DAX increased 1.95% to 15,423.52 and the FTSE 100 index gained 1.82% to 7,628.21.

Back home, Bursa Malaysia closed on a positive note on Tuesday, buoyed by buying activities and improved regional markets’ performance. At the closing bell, the FBM KLCI rose 17.91 points to 1,435.17 from Monday’s closing of 1,417.26. The regional markets finished mixed with the Nikkei 225 gained 2.43% and the Hang Seng rose 0.84%. The Shanghai Composite lost 0.70%.

Source: PublicInvest Research - 11 Oct 2023