HEADLINES

Economy

Global: IMF sees slow, steady 2024 global growth; China, war escalation pose risks. The IMF forecast global real GDP growth, opens new tab of 3.2% for 2024 and 2025 - the same rate as in 2023. The 2024 forecast was revised upward by 0.1 ppts from the previous World Economic Outlook's estimate in January, largely due to a significant upward revision in the US outlook. "The global economy continues to display remarkable resilience with growth holding steady and inflation declining, but many challenges still lie ahead," Pierre-Olivier Gourinchas, the IMF's chief economist, told reporters. (Reuters)

US: Economic activity expanded slightly in recent weeks. US economic activity expanded slightly from late February through early April and firms signaled they expect inflation pressures to hold steady, a Federal Reserve survey showed, continuing recent trends that have kept the central bank from being able to cut interest rates. The US central bank released its latest snapshot on the health of the economy a day after Fed Chair Jerome Powell ditched previous guidance on when its benchmark interest rate may be cut and instead said monetary policy needs to be restrictive for longer due to a string of stronger-than-expected inflation readings. (Reuters)

EU: The ECB is seen forgiving Italy its fiscal sins, if needed. The central bank presented its Transmission Protection Instrument (TPI) in mid-2022 as a tool to counter any "unwarranted" widening of bond spreads among the 20 euro zone countries. The scheme, by which the bank would step in to buy the bonds of a country under market attack, has never been used, but analysts say its presence as a backstop encouraged investors to favour high-debt Italy despite its wayward state accounts. (Reuters)

UK: Inflation slows its fall, pushing back rate cut bets. Britain's inflation rate slowed by less than expected in March, adding to signs that a first interest rate cut by the BoE could be further off than previously thought. British consumer prices rose by an annual 3.2%, down from a 3.4% increase in Feb and its lowest in two and a half years, the Office for National Statistics said. But the BoE - which has an inflation target of 2% - and economists polled by Reuters had forecast 3.1%. (Reuters)

Japan: Firms business mood slips as weak yen squeezes households. Business confidence at big Japanese manufacturers and services sector firms slid in April from the prior month, dragged down by cost-of-living pressures and shaky economic conditions in major market China, a Reuters monthly poll showed. The Reuters Tankan sentiment index for manufacturers stood at plus 9, down from the previous month's 10, dragged down by chemicals and food processing. (Reuters)

Indonesia: Indonesia's plunging rupiah twists the policy plot. Indonesia's economy was primed for monetary easing later this year, but an unwelcome plunge in its currency is complicating matters for Bank Indonesia (BI) and could force it to grudgingly raise rates as early as next week. The rupiah sank to a four-year low against a dollar buoyed by expectations that a hot US economy will force the Fed to keep rates higher for longer. (Reuters)

Markets

Menang Corp: To take up 20% stake in Indonesian healthcare JV. Menang Corp (M) has signed an agreement to acquire 20% of an Indonesian healthcare JV for RM4m. It also agreed to subscribe up to 30m preference shares for RM30m in the JV, Alpro Menang Ventures SB. The remaining 80% of the JV will be held by Alpro Alliance SB (ALA), which retails pharmaceutical products. (The Edge)

Excel Force: Chinese national Chen Hui ceases to be substantial shareholder of Excel Force. Excel Force MSC said Chinese national Chen Hui has ceased to be a substantial shareholder after he disposed of 30m shares or a 4.9% stake in the company for RM10.2m through Hong Kong-based company Honest Winner Ltd via a direct business transaction. Following this, Chen’s stake in the firm fell to 3.4%, comprising 20.5m shares. Chen first emerged as a substantial shareholder on Feb 29, after the group fully acquired Orca Capital Holdings Ltd (OCHL) for RM18.2m in a share sale agreement. (The Edge)

Affin Bank: EPF ceases to be substantial shareholder of Affin Bank. Affin Bank said the Employees Provident Fund (EPF) has ceased to be its substantial shareholder after disposing of three million shares in the banking group on April 12. The bourse filing did not specify the value of the transaction, nor did it state the remaining amount of shares held by the EPF. As at Feb 29, EPF held a total of 121.9m shares in the bank, equivalent to a 5.195% stake. It had been reducing its stake in Affin Bank from Jan till endFeb, selling a total of 16.46 million shares during that period. (The Edge)

HeiTech Padu: Proposes private placement to raise RM22.98mil for working capital. Heitech Padu has proposed a private placement of 10.12m new ordinary shares, raising gross proceeds of RM22.98m, which will be utilised for working capital. The issuance of new ordinary shares is representing 10% of the total number of issued shares of the company and the placement shares will be placed to third-party investors to be identified later. "These proceeds shall mainly be utilised for staff salaries, employers’ statutory contributions, payment to suppliers and creditor, office administrative expenses, utilities expenses and overhead expenses,” it said. (Bernama)

Malayan Flour Mills: To invest RM100m in FY24. Malayan Flour Mills (MFM) is investing a total of RM100m in the financial year 2024 (FY24), of which RM32m will be used to install a new milling line in Lumut. MFM chairman Datuk Oh Chong Peng said the new milling line will have new, more efficient, cost-effective technology. It will also raise the existing 1,800-tonne daily capacity by another 600 tonnes. “The balance of RM60mil will be to construct and install flour silos and flour blending facilities in Mekong Flour Mills Ltd in southern Vietnam,” he said in the company’s 2023 annual report. (Bernama)

IPO: Keyfield International’s 4Q net profit surges 72% ahead of Main Market listing. Keyfield International reported a 72.43% surge in its fourth-quarter net profit, driven by higher vessel utilisation and charter rates. Net profit for 4Q2023 totalled RM22.1m compared with RM12.8m in 4QFY2022. Revenue grew 76.82% YoY to RM119.5m from RM67.6m. Looking ahead, the firm expects supply conditions for offshore vessels to remain tight in 2024 due to a shortage of suitable vessels to support offshore activities. (The Edge)

MARKET UPDATE

The FBM KLCI might lose a few points today after US stocks fell in choppy trading on Wednesday as investors assessed the Federal Reserve's interest rate stance and a batch of soft earnings early in the financial reporting season. Travelers tumbled 7.41% and was among the biggest drags on the S&P 500 and largest on the Dow Industrials after the insurance giant missed Wall Street expectations for first-quarter profit. The Dow Jones Industrial Average fell 45.66 points, or 0.12%, to 37,753.31, the S&P 500 lost 29.20 points, or 0.58%, to 5,022.21 and the Nasdaq Composite lost 181.88 points, or 1.15%, to 15,683.37. European shares followed a bruising sell-off with a slight gain, supported by solid earnings from consumer companies, while investors kept a wary eye on developments in the Middle East. The pan-European STOXX 600 index rose 0.06% and MSCI's gauge of stocks across the globe shed 0.34%.

Back home, Bursa Malaysia snapped four consecutive days of losses to end higher on Wednesday as bargain hunting emerged following the recent sell-off. At the closing bell, the FBM KLCI rose 5.42 points, or 0.35%, to 1,540.42 from Tuesday’s close of 1,535.0. Emerging market stocks rose 0.36%. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.38% higher, while Japan's Nikkei lost 1.32%.

Source: PublicInvest Research - 18 Apr 2024