HEADLINES

Economy

US: Consumer sentiment index for March unexpectedly upwardly revised. The University of Michigan released revised data showing an unexpected improvement in U S consumer sentiment in the month of March. The report said the consumer sentiment index for March was upwardly revised to 79.4 from the preliminary reading of 76.5. Economists had expected the reading to be unrevised. With the unexpected upward revision, the consumer sentiment index for March is now above the final Feb reading of 76.9. The index also reached its highest level since hitting 81.2 in July 2021. (RTT)

US: Pending home sales increase moderately. Pending home sales in the US rose 1.6% in Feb, spurred by modest inventory increases and job gains. The National Association of Realtors (NAR) Pending Home Sales index rose 1.6% to 75.6 from a revised 74.4 the month prior. Economists expected a 1.5% increase, a Reuters poll showed. On a yearly basis, pending home sales fell 7% in Feb. Contracts on pending homes dropped in 2023 as prospective buyers faced shortened inventory and higher mortgage rates, tracking with the Fed's rate hike campaign. While the average 30-year fixed-rate has eased from two-decade highs in October falling to 6.87% for the week ended March 21, according to Freddie Mac, foot traffic in the existing homes market is expected to stir as inventory recovers. (Reuters)

US: Economy unexpectedly grew faster than previously estimated in Q4. The US economy unexpectedly grew by more than previously estimated in the fourth quarter of 2023, the Commerce Department revealed in a report released. Revised data showed real gross domestic product surged by 3.4% in the fourth quarter compared to the previously reported 3.2% jump. Economists had expected the pace of GDP growth to be unrevised. The Commerce Department said the stronger than previously estimated growth primarily reflected upward revisions to consumer spending and nonresidential fixed investment that were partly offset by a downward revision to private inventory investment. (RTT)

EU: Italy producer prices fall further. Italy's producer prices continued to decline sharply in Feb, data from the statistical office ISTAT showed. Producer prices posted an annual decrease of 10.8% after a 10.7% drop in Jan. Producer prices have been falling since April 2023. The annual decline in Feb was largely due to cheaper costs for chemical products, metals and metal products, and the wood, paper, and printing industries, the agency said. Prices in the domestic market were down 14.2%, and those in the foreign market decreased by 1.3%. (RTT)

EU: Ireland retail sales fall 2.0%. Ireland's retail sales decreased for the first time in four months in Feb, preliminary data from the Central Statistics Office showed. The volume of retail sales rose a seasonally adjusted 2.0% MoM in Feb, reversing a 2.0% gain in the previous month. Among categories, the largest monthly increase was observed in sales of motor vehicles, which fell by 9.0%. A 7.1% decrease was seen in sales at department stores. Meanwhile, the biggest monthly volume decrease was observed in sales at bars, by 11.8%. On a yearly basis, retail sales growth eased to 1.1% from 5.3% in Jan. (RTT)

UK: Public's inflation expectations fall again in March. The British public's expectations for inflation over the next year and the longer term fell in March. Public expectations for inflation in 12 months' time fell to 3.3% in March from 3.6% in Feb, while expectations for the five- to 10-year period fell to 3.4% from 3.5%. Data from Citi/Yougov for Feb also showed a fall in the public's inflation expectations. The falling trend in the public's inflation expectations should provide further encouragement to the BoE's monetary policy committee that second-round effects of inflation are fading, Nabarro added. Data last week showed British inflation slowed to 3.4%, the lowest since Sept 2021, raising expectations that the Bank of England could start cutting interest rates in the months ahead. (Reuters)

Singapore: Producer price inflation accelerates. Singapore's producer price inflation accelerated in Feb amid an increase in the non-oil index, data from the Department of Statistics showed. The manufacturing producer price index climbed 2.2% YoY in Feb, faster than Jans 1.8% rise. The non-oil index rose 3.3% annually in Feb, while the oil index showed a decrease of 3.0%. Domestic supply prices were 2.8% lower in Feb than a year ago, after a 2.7% decline in the prior month. On a monthly basis, producer prices moved up 0.3% in Feb versus a 0.2% rise in Jan. The import price index fell 5.1% over the year, following a 5.0% decrease in the previous month. (RTT)

Australia: Retail sales rise in Feb. Australia's retail sales expanded in Feb as Taylor Swift concerts lifted spending on clothing, merchandise, accessories and dining out, the Australia Bureau of Statistics said. Retail sales increased 0.3% in Feb, following a 1.1% rise in Jan and a fall of 2.1% in Dec. Sales were forecast to climb 0.4%. Looking past the temporary and one-off impact of the Taylor Swift concerts, underlying growth in retail turnover was up only 0.1% in trend terms. Another increase in turnover for catering services, cafes, restaurants and takeaway businesses suggested that consumers are still prepared to spend at large social events as seen last month with the big crowds at the tennis and cricket. (RTT)

Markets

KNM: To dispose of entire stake in FBM Hudson Italiana for RM84.77m. KNM’s wholly-owned indirect subsidiary KNM Europa BV planned to dispose of its entire stake in FBM Hudson Italiana SpA (FBMHI) for EUR16.5m (RM84.77m). KNM said KNM Europa has entered into a conditional share purchase agreement with BM Carpenterie Oil and Gas SrL to dispose of its 60% share capital in FBMHI for EUR9.90m, while its 40% share capital of FBMHI will be sold to Officine Piccoli SpA for EUR6.6m. (The Star)

Theta Edge: Partners India’s KEC International to bid for TNB grid projects. Theta Edge said it has teamed up with India-based power transmission giant KEC International Ltd in bidding for TNB future grid projects. It inked a MOU with KEC International and its Malaysian unit to submit a contractor prequalification assessment related to grid infrastructure work via a joint venture partnership. Under the MOU, the parties intend to submit their application for prequalification and appoint either KEC International or KEC Malaysia as the subcontractor to Theta Edge for providing supply and installation solutions for power transmission infrastructure. (The Edge)

SCIB: Gets shareholder approval for debt capitalisation, LTIP. Sarawak Consolidated Industries (SCIB) has got the green light from its shareholders for two proposals aimed at bolstering its financial framework and retaining talent. The group said the first proposal passed at an extraordinary general meeting held recently involves the capitalisation of an aggregate RM11.3m debt owed to Goh Hardware & Construction SB by SCIB Properties SB, a subsidiary of SCIB. Via the initiative, SCIB will issue about 18.5m new ordinary shares at an issue price of 61.1 sen, significantly above the current market price of 31 sen. (The Star)

Eduspec bags RM30m 5G hardware testing job from EG Industries unit. Eduspec Holdings has secured a RM30m contract from electronic manufacturing services (EMS) provider EG Industries to provide testing services for EG Industries’ 5G optical modules and other related components. The job was awarded to Eduspec Technology SB, from EG Industries’ wholly-owned subsidiary SMT Technologies SB (SMTT). The independent testing services Eduspec is to provide under the contract include testing and validating SMTT’s 5G optical printed circuit board assembly and other related components and products. (The Edge)

KJTS: Bags contracts. KJTS’ subsidiary, ETC Cleaning Services SB, has clinched six contracts from an international electronics manufacturing company. The contracts, awarded between 20 March and 26 March, 2024, encompass housekeeping and floor polishing services across six key locations. Despite the contract amounts not being disclosed in the award letters, it is anticipated that they will be finalised upon the signing of the respective agreements. (The Malaysian Reserve)

PT Resources: 3Q profit jumps on higher domestic and overseas sales. PT Resources reported a net profit of RM14.56m for its latest quarter, over seven times the RM1.97m it made a year earlier, as revenue increased amid higher domestic and overseas demand. EPS rose to 2.47sen from 0.37sen. Revenue for the 3QFY2024 came in at RM165.04m, up 42.96% from RM115.44m in 3QFY2023. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after the S&P 500 closed out the week with slight gains yesterday, with the benchmark index notching its strongest first quarter in five years, as investors digested the latest batch of economic data while looking towards the next inflation reading. Data on Thursday showed the US economy grew faster than previously estimated in the fourth quarter, partly due to strong consumer spending, while a separate report showed initial jobless claims indicated the labour market remains on solid footing. While US equity markets will be closed for the Good Friday holiday, the focus will be on the release of the Personal Consumption Expenditures Price Index (PCE), the Fed's preferred inflation gauge, for clues on the timing and size of rate cuts this year from the central bank. The Dow Jones Industrial Average rose 47.29 points, or 0.12%, to 39,807.37, the S&P 500 gained 5.86 points, or 0.11%, to 5,254.35 and the Nasdaq Composite lost 20.06 points, or 0.12%, to 16,379.46. Europe's STOXX 600 closed at a record high on Thursday, finishing its second-straight quarter in gains, with retailer JD Sports notching its strongest day in over four years after reiterating its annual profit forecast. The Pan-European STOXX 600 ended 0.2% up, closing a week that was marked by four range-bound sessions ahead of a holiday extended weekend.

Back home, Bursa Malaysia closed lower on Wednesday as the short-term market sentiment remains jittery amid the uncertain global performance. At the closing bell, the FBM KLCI slipped 7.82 points to 1,530.6 from Tuesday’s close of 1,538.42. Elsewhere in the region, Shanghai Composite Index added 0.59%, Hong Kong’s Hang Seng rose 0.91% and Australia’s ASX taken on 0.99%.

Source: PublicInvest Research - 29 Mar 2024