Economy

Global: Key debt ratio resumes rise as global debt burden hits record USD315trn, IIF says. A key measure of world indebtedness has resumed its climb as global debt hit a record high of USD315trn in the first quarter of the year, fuelled by borrowing in emerging markets, the US and Japan, a study showed. The global debt-to-output ratio — a measure describing the ability of a borrower to pay back debt (Reuters)

EU: Eurozone retail sales recover in March. Eurozone retail sales recovered in March driven by higher sales of food and auto fuels, data from Eurostat showed. Retail sales rebounded 0.8% on a monthly basis in March, in contrast to the 0.3% fall in Feb. Economists had forecast an increase of 0.6%. Sales of food, drinks and tobacco advanced 1.2%, reversing a 0.5% drop in the previous month. Non-food product sales remained flat after a 0.3% gain. Automotive fuel in specialised stores posted an expansion of 2.0%, offsetting Feb's 0.9% decrease. YoY, retail sales registered a 0.7% rise after declining 0.5% in Feb. The retail sales volume in the EU27 grew 1.2% on month and advanced 2.0% from the same period last year. The highest annual increases in the total retail trade volume were recorded in Poland, Luxembourg and Croatia. Meanwhile, Belgium, Estonia and Austria reported the largest decreases. (RTT)

EU: German construction downturn intensifies in April. Germany's construction sector continued to deteriorate sharply at the start of the second quarter amid ongoing weakness in demand, survey results from S&P Global showed. The construction purchasing managers' index dropped to 37.5 in April from 38.3 in March. Any score below 50.0 indicates contraction. The current sequence of decline stretches back to April 2022. Among the three broad construction categories, the decline was more evident in housing activity. The pace of decline in commercial activity was likewise broadly in line with that seen in March. (RTT)

UK: Car registrations rise 1.0% in April. New car sales in the UK rose for the twenty-first consecutive month and logged the best performance for April since 2021, data from the Society of Motor Manufacturers & Traders, or SMMT, showed. In April, new car registrations grew by 1.0% to reach 134,274 units. However, the uptake was still 16.6% below the pre-pandemic level. Fleets accounted for all of the growth, with registrations rising by 18.5% to 81,207 units, continuing the year-long trend, the SMMT said. The number of private buyers fell by 17.7% to 50,458 units, and the number of business registrations dropped by 16.1% to 2,609. Electric cars remained the key drivers of market expansion. Overall, battery electric vehicle uptake rose 10.7%, indicating a market share of 16.9%. (RTT)

Taiwan: Inflation slows to 1.95%. Taiwan consumer price inflation eased more-than-expected in April, data released by the Directorate General of Budget, Accounting, and Statistics showed. The consumer price index, or CPI, rose 1.95% YoY in April, slower than the 2.15% rise in March. Economists had forecast inflation to moderate fractionally to 2.10%. Food inflation eased to 2.58% from 2.86%. Transportation and communication costs also increased at a slower pace of 0.69% versus a 1.29% rise seen in March. On a monthly basis, consumer prices edged up 0.1% in April after a 0.25% increase in the prior month. Data also showed that producer prices rose 2.06% annually in April, after a 0.49% gain a month ago. (RTT)

Australia: Holds interest rates, vigilant on inflation risks. Australia's central bank held interest rates for a fourth straight meeting, while noting inflation was easing more gradually than hoped and that it was vigilant to upside price pressure risks. Wrapping up its two-day May policy meeting, the Reserve Bank of Australia (RBA) kept rates at a 12-year high of 4.35%. However, it stopped short of reinstating a tightening bias as some economists had expected after first quarter inflation and the labour market failed to cool as much as expected. (Reuters)

Markets

Sime Darby Plantation (Neutral, TP: RM4.02): To work with PNB to develop 404ha Kerian Integrated Green Industrial Park. Sime Darby Plantation (SD Plantation) today said it will work with major shareholder Permodalan Nasional to develop the 404hectare Kerian Integrated Green Industrial Park (KIGIP), in Perak. In a statement today, the company said a joint proposal was submitted to the Ministry of Investment, Trade & Industry (MITI) in Feb. The development will be located in SD Plantation's Tali Ayer Estate in Perak. KIGIP, conceptualised to attract green electrical and electronics (E&E) investments into the country, was announced by the government in the 2024 Budget. (BTimes)

Sapura Energy: Gets contracts worth USD1.8bn. Sapura Energy’s joint venture entities, Seabras Sapura Holding GmbH and Seabras Sapura Participacoes SA, have been awarded contracts worth USD1.8bn for its six multi-purpose pipe-laying support vessels (PLSVs), as part of a Petrobras tender process. The contracts were offered to Seagems Solutions Ltda, Sapura Diamante GmbH, Sapura Topazio GmbH, Sapura Jade GmbH, Sapura Onix GmbH and Sapura Rubi GmbH, which are entities of Seabras Sapura Holding and Seabras Sapura Participacoes. (SunBiz)

Pekat: Inks agreement to acquire stake in local switchgears supplier. Solar power specialist Pekat Group said that it has signed a non-binding agreement to acquire a stake in switchgears supplier EPE Switchgear (M) SB to expand its businesses. Under the MOU, Pekat and EPE Switchgear’s sole shareholder Apex Power Industry SB agreed to negotiate exclusively until June 30, 2024, or such later date as may be agreed mutually in writing, the company said in an exchange filing. (The Edge)

Siab: Raising funds to acquire Taghill. Siab Holdings has announced plans to raise RM103.98m through private placement, of which RM12m has been completed on Dec 28, 2023, and rights issue with warrants. In a statement, Siab said the funds would be used to finance the acquisition of Taghill Projects SB. The rights issue with warrants, valued at RM91.98m, will be underwritten by M&A Securities SB, the principal adviser, managing underwriter and joint underwriter to the company, as well as NewParadigm Securities SB, the joint underwriter to Siab. (StarBiz)

OCK: Marks entry into Laos with a 15-year tower leasing deal with Best Telecom. Telecommunication tower company (towerco) OCK Group has entered into a 15-year tower leasing agreement with Best Telecom Co Ltd, marking its entry into Laos, where Best Telecom plans to launch their 5G network by the end of the year. OCK said the agreement with Best Telecom marked the group’s official entry into Laos, though the deal's value remains undisclosed. (The Edge)

Mobilia: Home furniture maker Mobilia plans one-for-four free warrants. Home furniture maker Mobilia Holdings is planning to issue up to 218.75m free warrants (Warrants-B), on the basis of one Warrant-B for every four existing shares held by entitled shareholders. The warrants' indicative exercise price is 15 sen apiece, representing a 10% discount to Mobilia’s closing price of 16.5 sen on Tuesday. At 16.5 sen, Mobilia is valued at RM115.5m. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after US stocks held steady Tuesday, as trading on Wall Street calmed following some sharp recent swings. The S&P 500 edged up by 6.96 points, or 0.1%, to 5,187.70. It was a quiet day following three straight leaps for the index of at least 0.9%. The Dow Jones Industrial Average added 31.99, or 0.1%, to 38,884.26, and the Nasdaq composite slipped 16.69, or 0.1%, to 16,332.56. Wall Street still considers the latter a possibility this year following some events last week that traders found encouraging. Federal Reserve Chair Jerome Powell said the central bank remains closer to cutting its main interest rate than hiking it, despite a string of stubbornly high readings on inflation this year. A cooler-than-expected jobs report on Friday, meanwhile, suggested the US economy could pull off the balancing act of staying solid enough to avoid a bad recession without being so strong that it keeps inflation too high. Elsewhere, indices jumped across much of Europe and Asia. Stocks rose 2.2% in Seoul, 1.6% in Tokyo and 1.2% in London. Australia’s S&P/ASX 200 advanced 1.4% after the central bank decided to keep interest rates unchanged. Back home, the FBM KLCI increased 0.52% or 8.29 points to 1,605.68 from yesterday’s close of 1,597.39, making this the highest level for the key index since April 2022.

Source: PublicInvest Research - 8 May 2024