Economy

US: Pending home sales unexpectedly increase for third straight month in Feb. Pending home sales in the US unexpectedly increased for the third straight month in Feb, according to a report released by the National Association of Realtors. NAR said its pending home sales index climbed by 0.8% to 83.2 in Feb after spiking by 8.1% to 82.5 in Jan. Economists had expected pending home sales to slump by 3.0%. The pending home sales index reached its highest level since hitting 88.3 last Aug but was still down by 21.1% compared to a year ago. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. (RTT)

EU: German consumer morale to strengthen in April . Despite the rising recession fears, confidence among German consumers strengthened for the sixth consecutive month on improving income expectations, a closely-watched survey by the market research group GfK revealed. The consumer confidence index for April climbed to -29.5 from -30.6 in March, the Nuremberg-based GfK said. The reading for March was slightly revised from -30.5. The expected score was -29.2.The survey carried out between March 2 and 13 showed a mixed picture. Although consumer sentiment continued its recovery, the momentum was noticeably slower than in the previous months. (RTT)

UK: Mortgage approvals rise in sign of stability returning . UK mortgage approvals rose more than forecast in Feb, adding to signs that the housing market is starting to stabilize following the blow inflicted by the autumn’s market turmoil. Lenders authorized 43,500 home loans compared with 39,600 in Jan, the BoE said. It was the first increase since Aug and more than the 41,300 predicted by economists. The figures suggest improving consumer confidence, resilience in the labour market and an easing of the cost-of-living crisis are feeding into the housing market. Earlier this month, mortgage lender Halifax reported a second consecutive increase in house prices, while Rightmove said sellers are raising asking prices. (Bloomberg)

Singapore: Producer prices fall 0.9% in Feb . Singapore's producer prices decreased in Feb as the oil and non-oil index contracted, data from the Department of Statistics showed. The manufacturing producer price index fell 0.9% YoY in Feb, reversing a 0.9% rise in the prior month. The oil index dropped 1.8% annually in Feb, and the non-oil index showed a decrease of 0.8%. Domestic supply prices were 4.7% lower in Feb from a year ago, after a 1.5% drop in Jan. This was the second successive monthly fall. On a monthly basis, producer prices edged up 0.1% in Feb, in contrast to a 1.7% decline in the previous month. (RTT)

Australia: Inflation moderates in Feb . Australia's consumer price inflation moderated to an eight-month low in Feb adding weight to the expectations that the Reserve Bank will pause its interest rate hike next week. Consumer prices grew at a slower pace of 6.8% after a 7.4% gain in Jan, the Australian Bureau of Statistics reported. The rate was the lowest since June 2022 when it was at the same level. Prices were expected to climb 7.1% in Feb. (RTT)

Thailand: Central bank raises key interest rate, trims growth outlook . Thailand's central bank raised its key interest rate by 25 bps for a fifth straight meeting on March 29, as it attempts to bring inflation back within target while its economic recovery gathers steam against rising global headwinds. The Bank of Thailand's (BOT) monetary policy committee voted unanimously to raise the one-day repurchase rate to 1.75%, as widely expected in a Reuters poll. (Reuters)

Markets

TNB (Outperform, TP: RM12.42): Power generation unit issues RM2bn sustainability sukuk wakalah. Tenaga Nasional Bhd (TNB) wholly owned subsidiary TNB Power Generation SB (TPGSB) issued RM2.0bn in nominal value of sustainability sukuk wakalah, pursuant to the sukuk wakalah programme. The order book was oversubscribed by 2.02 times representing an order book size of RM4.035bn against the issuance size of RM2.0bn, it said. (StarBiz)

Sime Darby (Neutral, TP: RM2.37): No decision to divest Ramsay Sime Darby Health Care. Sime Darby reiterated that it has not made a decision to divest its joint venture (JV) with Australia’s Ramsay Health Care Ltd. “However, Sime Darby continuously evaluates corporate opportunities to enhance value for its shareholders,” adding that it will make necessary announcements when there is a definite corporate proposal. Sime Darby’s filing was in response to a Reuters article which said the JV partners plan to revive the sale of Ramsay Sime Darby Health Care SB. (The Edge)

MKH: Proposes Main Market listing of oil palm plantation arm. MKH plans to list its oil palm plantation arm MKH Oil Palm (East Kalimantan) (MKHOP) on the Main Market of Bursa Malaysia by the 4Q of 2023. MKH proposes to undertake an initial public offering (IPO) of 24.5% of MKHOP’s enlarged share capital, after completing a slew of pre-listing corporate exercises. Prior to the IPO, MKHOP is to undertake a one-to-six share split which would result in the unit’s share base expanding from 110.47m shares to 662.81m shares, with a maintained issued share capital of 110.47m. (The Edge)

Bintai Kinden: Slips into PN17 after unit defaults on RM109m financing facility. Bintai Kinden Corp said it has been classified as a Practice Note 17 (PN17) issuer after its subsidiary defaulted on RM109m worth of financing facilities. This came after MBSB Bank terminated Bintai Kinden's role as the corporate guarantor for the RM109m Islamic banking facilities granted to the group’s wholly owned unit Optimal Property Management SB. (The Edge)

Reach Energy: Completes debt settlement exercise, to see Super Racer emerge as major shareholder. Hong Kong-based Super Racer Ltd (SRL) is to emerge as the new major shareholder of Reach Energy with a 48.5% stake after the oil and gas (O&G) exploration and production (E&P) company completed its debt settlement exercise. This came after the listing of 1.03bn shares in Reach Energy slated for SRL at 20 sen apiece, as part of the company’s debt settlement exercise to settle RM206.51m or 76% of the debt it owes to SRL. (The Edge)

BDB: Acquires companies for RM13m. Bina Darulaman Bhd (BDB) has proposed to acquire Gemi Puncak SB and Gemi Puncak Quarry SB for RM13m. Executive director Raja Shahreen Raja Othman said that the acquisition plan was part of the group's business growth strategy, particularly involving the engineering, construction, and quarry (ECQ) division. (StarBiz)

Coraza: Plans placement to raise RM69.5m to enhance capabilities. ACE Market-listed Coraza Integrated Technology has planned a private placement of up to 20% of its share base to raise an estimated RM69.54m, mainly to fund the purchase of new machinery. The placement will comprise the issuance of up to 85.85m shares to independent third parties to be identified, at an issue price to be determined. (The Edge)

Market Update

The FBM KLCI might open higher today after US stocks rose on Wednesday as waning fears of further turmoil in the banking sector whipped up investor appetite for finance and tech stocks. Wall Street’s S&P 500 index added 1.4% in a broad-based rally led by the real estate, tech and consumer discretionary sectors. The Nasdaq Composite advanced 1.8%. Both indices are on track for modest monthly gains in March despite the recent collapses of three US banks. Europe’s region-wide Stoxx 600 index added 1.2%, with shares in UBS up 3.7% after the bank said it would bring back Sergio Ermotti as chief executive to steer its takeover of Credit Suisse. Europe’s Stoxx 600 Banks index gained 1.9%. London’s FTSE 100, meanwhile, rose 1%, helped by real estate stocks after UK mortgage approvals edged up in February, rising to 43,500 from 39,600 in January.

Back home, bargain hunting for oversold blue chips amid an upbeat regional performance gave Bursa Malaysia a boost on Wednesday. A rebound in oil prices and easing fears over the banking turmoil in the US and Europe also contributed to improved sentiments on the local front. At the closing bell, the FBM KLCI had advanced 11.26 points, or 0.80%, to 1,420.35 from Tuesday's closing at 1,409.09. In the region, Alibaba’s Hong Kong-listed shares rose more than 12%, following similar gains on Wall Street the day before, while the Hang Seng Tech index, which tracks the largest technology companies listed in the city, climbed 2.4% to its highest level since late February. China’s CSI 300 rose 0.2%. The moves came after Alibaba announced a radical restructuring plan on Tuesday that would split the company into six business groups. Long under pressure from domestic regulators, the company’s shares have fallen almost 70% from their October 2020 peak

Source: PublicInvest Research - 30 Mar 2023