HEADLINES

Economy

US: Factory orders plunge 3.6% in Jan, more than expected. The Commerce Department released a report showing a steep drop in new orders for US manufactured goods in the month of Jan. Factory orders plunged by 3.6% in Jan after falling by a revised 0.3% in Dec. Economists had expected factory orders to tumble by 2.9% compared to the 0.2% uptick originally reported for the previous month. The bigger than expected decrease in factory orders partly reflected a nosedive by durable goods orders, which plummeted by 6.2% in Jan after slipping by 0.3% in Dec. Orders for non-durable goods slumped by 1.1% in Jan after falling by 0.3% in the previous month. (RTT)

US: Growing share of US workers get a pay freeze in Atlanta Fed data. Most US workers have been getting pay hikes that exceed the rate of inflation in recent months, but the average hides the outliers, and a growing share are seeing their wages frozen. More than 12% of workers have not received a raise over the last 12 months, the most in more than two years, which measures the distribution of pay gains as well as the average. By one smoothedout measure, the share of the workforce that’s experiencing a pay freeze is rising at the fastest pace since 2010. The backdrop is a slowing rate of inflation, which is easing the pressure for pay to keep up with the cost of living. There’s now more optimism that the Fed can tame inflation without triggering a recession, which would be good news for workers because, along with job losses, wage freezes also became more prevalent in the last two economic downturns. (Bloomberg)

US: Services sector slows in Feb; inflation moderating. US services industry growth slowed a bit in Feb amid a decline in employment, but a measure of new orders increased to a six-month high, pointing to underlying strength in the sector. Despite the weakness in employment, comments from services businesses in the Institute for Supply Management (ISM) survey were generally upbeat, and suggested labor shortages remained a constraint for some. There were also no signs that inflation was picking up after a jump in prices at the start of the year, welcome news for Federal Reserve officials. (Reuters)

EU: Eurozone producer prices plunge 8.6%. Eurozone producer prices logged a further steep decline in Jan amid a continued downward trend in energy prices, data published by Eurostat showed. Producer prices fell 8.6% YoY in Jan, slower than the revised 10.7% decrease in Dec. Prices were expected to decline by 8.1%. Excluding energy, the producer price index dropped only 1.5% at the start of the year. Data showed that the decline in energy prices was 21.3% versus a 27.3% plunge in the previous month. Prices for intermediate goods fell 5.8%. (RTT)

EU: Eurozone private sector moves closer to stabilization. The euro area private sector moved closer to stabilization as renewed services activity expansion offset further contraction in manufacturing, final survey results from S&P Global showed. The HCOB composite output index rose to an eight-month high of 49.2 in Feb from 47.9 in Jan. The score was well above the flash 48.9. However, a reading below 50.0 indicates contraction. The services PMI advanced to 50.2 from 48.4 in the previous month. The flash reading was 50.0. Among big-four economies, solid expansion was seen in Spain. Italy also contributed positively. However, these upturns were counteracted by the euro area's two largest economies, France and Germany. (RTT)

UK: Service sector expands for fourth month. The UK service sector expanded for the fourth consecutive month in Feb underpinned by robust new order growth and further rise in employment, final data from S&P Global showed. The services PMI fell to 53.8 in Feb but down from 54.3 in Jan. The flash reading also stood at 54.3. New business grew at the fastest pace since May 2023 on rising business and consumer spending. Improving export sales helped to boost total order books. There was a moderate increase in staffing numbers. The increase was the fastest since July 2023. Business optimism remained the strongest since Feb 2022. However, companies noted challenges arising from elevated economic and political uncertainty around the world. (RTT)

UK: New car sales register biggest Feb in two decades. New car sales in the UK rose for the nineteenth consecutive month and logged the best performance for Feb since 2004, data from the Society of Motor Manufacturers & Traders, or SMMT showed. In Feb, new car registrations grew by 14.0% to reach 84,886 units. The double-digit growth in Feb was primarily driven by fleets investing in the latest vehicles. Indeed, fleets and businesses were responsible for the entirety of Feb's increase, with registrations up 25.2% and 15.5%. Data showed that private uptake continued to struggle in Feb, falling 2.6% to register a 33.7% market share. (RTT)

Singapore: Retail sales up 1.3% in Jan, tourism, concerts could boost takings in coming months. Retail sales in Singapore improved slightly in Jan. Takings at the till inched up 1.3% YoY in Jan, compared with a 0.5% dip in Dec, according to figures released by the Singapore Department of Statistics on March 5. However, excluding motor vehicles, retail sales fell 2.1%, extending a 2.8% decline in Dec, with half of the categories experiencing a drop in sales. Compared with Dec and seasonally adjusted, Jan’s retail sales fell 0.7%, reversing the previous month’s 0.1% rise. Sales of motor vehicles rose 37.3% YoY in Jan, corresponding to a higher certificate of entitlement quota. Food and alcohol retailers saw their takings grow by 8.5%, while sales of watches and jewellery rose 5.3%. (The Straits Times)

Markets

Solarvest: To install solar power systems in 300 Petronas stations. Solarvest Holdings, via its subsidiary Solarvest Energy SB, has been appointed by Gentari Renewables SB to install solar power systems at over 300 Petronas stations in Malaysia. The project is aimed to commence in April 2024 and will see the installation of more than 5.4 MWp of solar capacity across more than 300 Petronas stations. The solar systems are expected to be operational by 2027. (StarBiz)

Crest Builder: Order book rises to record RM1.8bn with new contract worth RM448m. Crest Builder Holdings’ order book has reached a record high of RM1.8bn after the group bagged a commercial development from Sunway Velocity Three SB for a total contract value of RM448.5m. Its unit Crest Builder SB has accepted a letter of award for the construction of the Sunway Velocity 3 commercial development in Kuala Lumpur. Sunway Velocity Three was formerly known as Tanda Warisan SB, a member of the Sunway Group. The construction works will take approximately 43 months to complete from its scheduled site possession date of 15 March and targeted to be completed by 14 Oct 2027. (The Edge)

Fajarbaru: Wins RM121m contract for Johore Golf & Country Club construction. Fajarbaru Builder Group has secured an RM120.8m contract from Tanjung Nakhoda (M) SB for the construction and completion of partially completed works of Johore Golf & Country Club (JGCC). Its wholly owned subsidiary, Fajarbaru Builder SB accepted a letter of award from Tanjung Nakhoda. The project involves the construction and completion of a 2-storey clubhouse and accompanying carpark, a 4-storey driving range complex featuring a one-storey multi-purpose hall and a carpark, a guard house, and an electricity sub-station. (StarBiz)

Nextgreen Global: Plans RM121m private placement for Green Technology Park development. Nextgreen Global is planning for a private placement, targeting up to 10% of its issued shares to be allocated to unidentified third-party investors. The anticipated proceeds from this private placement, around RM120.8m, are earmarked for its Green Technology Park (GTP) project and working capital needs. The GTP project, located in Pekan, Pahang, focuses on green technology and aims to address sustainability concerns. (The Malaysian Reserve)

PPB Group: GSC expects tough year ahead, to focus on local, regional movies. PPB Group, which operates Golden Screen Cinemas (GSC), expects a tough year ahead for its film exhibition and distribution business. To offset the impact, GSC is shifting its focus to local and regional movies, including participating in local film production, to gain better control over the content at its cinemas. GSC is working on co-producing local movies on profitsharing, with costs ranging between RM8m and RM20m for each production. (The Edge)

Paramount: Aims for RM1.4bn sales in FY2024, flags potential property price increase. Paramount Corp aims to sell RM1.4bn worth of properties in FY2024, as the company ramps up launches. It plans launch projects worth RM2.4bn in gross development value this year, including some delayed projects. Some of the projects were stalled in 2023, due to delays in obtaining the necessary approvals. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after Wall Street three major indexes all retreated more than 1% yesterday, with weakness in megacap growth companies such as Apple Inc and the chip sector weighing most on the Nasdaq ahead of this week's crop of economic data and remarks from Federal Reserve Chair Jerome Powell. The Dow Jones Industrial Average fell 404.64 points, or 1.04%, to 38,585.19. The S&P 500 lost 52.3 points, or 1.02%, at 5,078.65 and the Nasdaq Composite dropped 267.92 points, or 1.65%, to 15,939.59. Europe's main index dipped on Tuesday, as mining shares weakened with metal prices on a lack of substantial stimulus from top consumer China, while investors awaited this week's euro zone and U.S. economic data and an ECB policy decision. The pan-European STOXX 600 index shed 0.3%, a day after hitting an all-time high, with technology losing 1.6%, tracking weakness in its US peers.

Back home, Bursa Malaysia recouped most of its earlier losses to close slightly lower on Tuesday as late buying in gaming, telecommunications and banking stocks supported the benchmark index, amid the downbeat performance in most regional markets. At the closing bell, the FBM KLCI shed 2.29 points to 1,536.98 from Monday's close of 1,539.27. In the region, the Hang Seng Index closed up 0.16% while the Nikkei 225 was down 0.8%.

Source: PublicInvest Research - 6 Mar 2024