HEADLINES

Economy

US: New home sales fall; median price lowest in more than 2.5 years. Sales of new US single-family homes unexpectedly fell in Feb after mortgage rates increased during the month, but the underlying trend remained strong amid a chronic shortage of previously owned houses on the market. The median new house price last month was the lowest in more than 2.5 years, while supply was the highest since Nov 2022. Builders are ramping up construction, while offering price to make housing more affordable. (Reuters)

US: Fed expected to cut rates. The US Fed looks on track to cut interest rates as the presidential campaign season heats up, potentially delivering President Joe Biden a boost as Americans dislike his handling of the economy. The Fed could play an outsized and potentially uncomfortable election-year role by helping shape attitudes about stubbornly high inflation and mounting housing costs that have been a drag on Biden's reelection efforts. (Reuters)

US: Sugar industry seek to curb Mexican imports. American sugar producers are seeking to curb imports from Mexico after the US said it would examine whether some shipments from the Latin American nation breached trade deal rules. The American Sugar Coalition wants the government to lower the amount of sugar Mexico is allowed to send to the US by 44%, according to a March 12 letter sent to Secretary of Commerce Gina Raimondo. The curbs would be effective from April 1 and apply to the year ending in Sept. Mexican sugar production slumped last season, but shipments to the US continued to flow. (Bloomberg)

EU: Spain producer prices continue to fall. Spain producer prices continued to decline in Feb and at the fastest pace in five months on falling energy prices. The PPI posted an annual fall of 8.2% in Feb after easing 3.9% a month ago. Producer prices have been falling since March 2023. Within overall prices, energy logged a double-digit sharp decrease of 24.2%. Intermediate goods prices fell by 5.2%. Meanwhile, prices of consumer and capital goods increased 4.5% and 2.5%, respectively. (RTT)

EU: Poland jobless rate steady at 5.4%. The unemployment rate in Poland remained stable in Feb after rising in the previous two months, figures from the statistical office showed. The unemployment rate came in at 5.4% in Feb, the same as in the previous month. In the corresponding month last year, the unemployment rate was 5.6%. The number of registered unemployed people rose to 845,300 in Feb from 837,100 in Jan. The number of unemployed young people under the age of 24 increased to 110,900 in Feb from 109,500 in the previous month. (RTT)

UK: Retailers expect sales to fall again in April. UK retailers expect sales to fall again in April after rising moderately in March. At net 2% of retailers said their sales volume increased in March, which was the first rise after 10 consecutive months of decline. However, retailers said sales will fall again next month, with the net balance falling to 25%. The indicator measuring order volumes fell sharply to 22% in March from 14% in Feb. A net balance of 24% expects orders to fall in April. (RTT)

China: Vows to treat foreign firms equally amid industrial upgrade push. China pledged to treat foreign companies the same way as domestic peers in a bid to attract more foreign investment, cooperation and expertise, as Asia's largest economy moves to upgrade and strengthen its industrial chains. China will fully guarantee national treatment for foreign companies, so that more foreign companies can invest in China with confidence and peace of mind. (Reuters)

Japan: Leading index revised lower to 109.5. Japan's leading index declined more than initially estimated in Jan. The leading index, which measures future economic activity, fell to 109.5 in Jan from a revised score of 109.9 in the previous month. The reading for Jan was 109.9. Likewise, the coincident index dropped to 112.1 from 115.9. The flash score was 110.2. The coincident index measures the current economic situation. The lagging index weakened to 106.0 in Jan from 107.6 in the prior month. (RTT)

Taiwan: Industrial output falls; retail sales growth accelerates. Taiwan's industrial production decreased in Feb after recovering sharply in the previous month. Retail sales expanded at the fastest pace in eight months. Industrial production fell 1.1% YoY in Feb, reversing a revised 15.6% surge in Jan. Among the main sectors, mining and quarrying output declined the most, by 9.8% annually in Feb, followed by that of manufacturing with a 1.2% fall. (RTT)

Singapore: Feb core inflation accelerates to 7-month high amid Lunar New Year. Singapore's Feb core inflation accelerated to its fastest pace in seven months, as seasonal effects from the Lunar New Year drove services and food prices higher. The core inflation rate, which excludes private road transport and accommodation costs, came in 3.6% in Feb from a year earlier, faster than the 3.1% seen in Jan. (Reuters)

Markets

UWC: Sees 75% 2Q net profit dip amid semiconductor downturn. UWC experienced a 75% YoY decline in net profit for its second quarter ended 31 Jan 2024 (2Q24), mainly due to the semiconductor market downturn impacting revenue and increased expenditure for future growth. Net profit fell to RM4.8m from RM19.1m in the previous year, with quarterly revenue decreasing by 33.5% to RM61.1m. Despite challenges, UWC remains optimistic, focusing on new projects, customer acquisition, and long-term growth strategies. The company is venturing into frontend semiconductor engineering businesses and expanding production capacity for its core business and new projects like electric vehicles (EVs). (The Malaysian Reserve)

Sapura Energy: Makes headway in Reset strategy as losses narrow. Sapura Energy Bhd's net loss narrowed to RM508.66m in the year ended 31 Jan, 2024 (FY23) from RM3.16bn net loss last year, which it said reflected a 12 months of operational resilience amid challenges. Group revenue fell to RM4.26bn from RM4.55bn in the previous year. In the fourth quarter (Q4) ended 31 Jan, 2024, Sapura Energy's net loss narrowed to RM728.44m from RM3.26bn in the same quarter in 2023. Group revenue, meanwhile, dipped to RM1.06bn from RM1.22bn a year ago. (New Straits Times)

Binastra: Posts record profit as construction segment continues to drive earnings. Binastra Corp, formerly known as Comintel Corp, posted a record-high net profit of RM15.4m for its fourth quarter ended 31 Jan 2024 (4QFY2024), a jump of 176.32% compared with RM5.6m a year earlier, on the back of higher revenue driven by its construction segment. Revenue more than doubled to RM155.4m from RM73.8m in 4QFY2023. Its construction segment recorded a profit before tax of RM20.7m during the quarter, up 125% from RM9.2m a year earlier, as revenue more than doubled to RM155.4m from RM73.8m. “This segment is the main contributor to the group’s overall revenue and profitability and is expected to continue to deliver positive results and improve the group’s overall results moving forward,” said Binastra. (The Edge)

TCS Group: Bags KL Kepong RM140.27mil retail project. TCS Group’s wholly owned subsidiary, TCS Construction SB (TCSCSB) has secured a RM140.27m contract from KLK Retail Centre SB (KLKRC) for main building works for a proposed commercial complex known as Bandar Seri Coalfields Retail Park in Bandar Seri Coalfields, Selangor. KLKRC is a wholly owned subsidiary of Kuala Lumpur Kepong Bhd (KLK). Construction services provider TCS said the overall contract period shall be nineteen months from the commencement date and the works completed on 24 Oct, 2025. (The Star)

MyNews: 1Q turns to black, plans aggressive retail expansion. MyNews Holdings reported a net profit of RM1.27m for the first quarter ended January 31, 2024 (1Q24), a significant turnaround from a net loss of RM3.21m in the same quarter last year, driven by robust sales growth. Quarterly revenue surged by 6% YoY to RM195.5m, up from RM184.1m previously. It expressed confidence that it has weathered the worst, marking its second consecutive profitable quarter. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks lost ground at the start of a holiday-shortened week on Monday as investors positioned themselves ahead of inflation data. All three major US stock indices ended the session in the red, with the blue-chip Dow suffering the largest percentage loss. The Dow Jones Industrial Average fell 162.26 points, or 0.41%, to 39,313.64, the S&P 500 lost 15.99 points, or 0.31%, to 5,218.19 and the Nasdaq Composite dropped 44.35 points, or 0.27%, to 16,384.47. European stocks reversed a modest sell-off to eke out nominal gains as market participants digested dovish sentiment from major central banks. The Pan-European STOXX 600 index rose 0.04% and MSCI's gauge of stocks across the globe shed 0.24%.

Back home, Bursa Malaysia closed lower on Monday, weighed by selling pressure in telecommunication, plantation, and gaming stocks. At the closing bell, the FBM KLCI declined by 4.85 points to 1,537.54 from last Friday’s close of 1,542.39. Emerging market stocks lost 0.25%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.07% lower, while Japan's Nikkei lost 1.16%.

Source: PublicInvest Research - 26 Mar 2024