Economy

EU: Eurozone trade surplus at record high. The euro area trade surplus increased to a record high in Dec driven by higher exports, data from Eurostat showed. The trade surplus increased to a seasonally adjusted EUR27.5bn from EUR24.9bn in Nov. This was the largest surplus recorded over the period for which data are available. Exports grew 1.1% on month, while imports decreased 0.3% from Nov. On a yearly basis, exports increased for the first time since Feb 2020. Exports climbed 2.3%, while imports fell 1.3%. As a result, the trade surplus increased to EUR29.2bn from EUR22.6bn in the same period last year. (RTT)

EU: Greece consumer prices continue to decline. Greece's consumer prices continued to decline in Jan, data from the Hellenic Statistical Authority showed. The consumer price index fell 2.0% YoY in Jan, following a 2.3% decline in Nov. Prices for transportation declined 5.7% annually in Jan. Prices of housing decreased 3.4% and clothing and footwear cost fell 3.5%. Prices household equipment and miscellaneous goods and services grew by 2.2% and 2.4%, respectively. On a monthly basis, consumer prices fell 1.3% in Jan, after a 0.4% growth in the prior month. The EU measure of harmonized index of consumer prices, fell 2.4% annually in Jan. (RTT)

Japan: Extends economic recovery as exports, capex shake off Covid hit. Japan’s economy expanded more than expected in the 4Q, extending the recovery from its worst postwar recession thanks to a rebound in overseas demand that boosted exports and capital spending. But the recovery slowed from the 3Q’s brisk pace and new state of emergency curbs cloud the outlook, underscoring the challenge policymakers face in preventing the spread of Covid19 without choking off a fragile recovery, especially in the battered consumer sector. The world’s third-largest economy grew an annualised 12.7% in Oct - Dec, exceeding a median market forecast of 9.5%. (Reuters)

India: Jan trade deficit narrows to USD14.54bn - government. India’s trade deficit in goods narrowed to USD14.54bn in January as exports grew faster than imports, revised data released by the government on Monday showed. The merchandise trade deficit was USD15.3bn in January 2020. The merchandise exports rose 6.16% in January from a year earlier to USD27.45bn, while imports were up 2.03% to USD42bn, the data showed. (Reuters)

India: Wholesale price inflation increases in Jan. India's wholesale prices increased in Jan, data from the Ministry of Commerce & Industry showed. The wholesale price index rose 2.03% YoY in Jan, after a 1.22% increase in Dec. Economists had expected a 1.3% rise. The primary articles price index declined 2.24% annually in Jan, following a 1.61% growth in the previous month. Food prices dropped to 0.26% in Jan, after a 0.92% rise in the previous month. Fuel and power prices declined 4.78% in Jan, following a 8.72% fall in the prior month. Prices of manufactured products grew 5.13% in Jan, following a 4.24% gain in the previous month. (RTT)

South Korea: Export prices slip 2.3% on year in January. Export prices in South Korea were down 2.3% on year in Jan, the Bank of Korea said, beating forecasts for a decline of 5.1% after sinking 5.4% in Dec. Prices for agricultural and forestry products fell an annual 5.7% and manufacturing products slid 2.2%. Import prices sank an annual 6.7% versus expectations for a drop of 11.2% after falling 10.2% in the previous month. Prices for raw materials plunged 14.9%, while intermediate, capital and consumer goods also were down. On a monthly basis, export prices rose 1.8% after rising 0.6% in Dec. (RTT)

Indonesia: Trade balance swings to surplus. Indonesia's trade balance swung to a surplus in Jan, as exports rose and imports declined, figures from Statistics Indonesia showed. The trade balance registered a surplus of USD1.958bn in Jan versus a deficit of USD636.7m a year ago. In Dec, the trade surplus was USD2.099bn. Exports grew 12.24% YoY in Jan. Economists had expected a rise of 13.59%. Imports fell 6.49% annually in Jan. Economists had forecast a decrease of 2.77%. On a monthly basis, exports declined 7.48% and imports decreased 7.59% in Jan. (RTT)

Thailand: GDP contraction slows in 4Q. Thailand's economy contracted at a slower pace in the 4Q underpinned by household and government spending, the National Economic and Social Development Council said. Nonetheless, the coronavirus pandemic pushed the economy into its worst recession since the Asian Financial Crisis in 1998. GDP fell 4.2% YoY in the 4Q, slower than the 6.4% decline in the previous quarter and the economists' forecast of -5.4%. On a quarterly basis, GDP grew 1.3% but weaker than the 6.2% growth logged in the 3Q. In 2020, the economy contracted 6.1%, reversing an expansion of 2.3% in 2019. (RTT)

Markets

UEM Sunrise (Neutral, TP: RM0.55), Mulpha: Call off RM5bn JV. UEM Sunrise and Mulpha International have called off their JV for a RM5bn GDV mixed development in Nusajaya, Johor. The development fell through as the conditions precedent, which included the obtaining of written approvals and planning approvals for the parcels of land, had not been fulfilled or waived during the conditional period. The conditional period had previously been extended twice. (The Edge)

Yong Tai (Neutral, TP: RM0.28): Denies vaccine application rejected by ministry. Yong Tai has denied rumours in the social media that its Covid-19 vaccine application has been rejected by the Ministry of Health’s (MoH) National Pharmaceutical Regulatory Agency. “Yong Tai is still working closely with its Chinese partner to escalate the application process and urge all stakeholders to be patient and stop spreading untrue statement, given the importance of the vaccine to help the nation achieve herd immunity,” it said. (The Edge)

Menang Corp: Suspends two directors with immediate effect. Menang Corp has suspended two non-independent and non-executive directors from exercising their duties and functions as directors of the company with immediate effect. The board of directors had resolved to suspend Datuk Shun Leong Kwong and Marianna Aly Shun. The reason for Shun's suspension is to investigate his handling of some land transactions in Seremban 3 and the company's subsidiaries. Meanwhile, the suspension of Marianna is to investigate her conduct in the planning and the organising of the last AGM of the company held on Dec 30, 2020. (The Edge)

UMW: Auto division starts healthy sales in January. UMW Holdings’ automotive business kicked off 2021 on an encouraging note with healthy sales recorded in Jan by both its subsidiary UMW Toyota Motor (UMWT) and associate company Perodua. It said UMWT sold 3,845 units last month, up 4.1% YoY. Meanwhile, Perodua registered sales of 16,894 units in the month under review. “The sustained demand was due to the sales tax exemption incentive, which has now been extended to June 30, 2021,” it said. Toyota Vios, Yaris and Hilux continued to be UMWT’s best-selling models in Jan. (SunBiz)

MAHB: Vaccine roll-out plan expected to improve air traffic numbers. Malaysia Airports (MAHB) expects the government's national vaccination plan, which will be rolled out starting April 2021 and the reciprocal green lane/travel corridor arrangement (RGL/TCA) between Malaysia and Indonesia will have a positive impact on the recovery of the national aviation industry in the near term.It said international passenger traffic grew by about 25% MoM in January 2021, despite border closures and strict quarantine measures. (The Edge)

ARB: 4Q net profit grows 54% as revenue surges. ARB’s net profit for 4QFY20 grew 54.4% YoY to RM19.74m, on the back of a surge in revenue. Its quarterly revenue climbed 61.03% YoY to RM72.46m due to contributions from enterprise resource planning (ERP) and Internet of Things (IoT) segments of RM69.85m and RM2.61m respectively. On its prospects, ARB said the ERP and IoT segments are expected to contribute impressive future earnings as they will continue growing and contribute profit for the group. (The Edge)

Market Update

The FBM KLCI might open higher today after global shares rose for the 11th day in a row to reach a fresh peak on optimism about the rollout of COVID-19 vaccines and new fiscal aid from Washington, while tensions in the Middle East drove oil to a 13- month high. As more people are vaccinated across key markets such as the United States, and with US President Joe Biden looking to pump an extra USD1.9trn in stimulus into the economy, the so-called reflation trade has gathered steam in recent days. Taking its cue from a stronger, albeit holiday-thinned, Asian session, Europe’s major indices were a sea of green in early deals, with Britain’s FTSE 100 up 2.2%. With China and Hong Kong markets still closed for the Lunar New Year holiday, Japan’s Nikkei led the way, climbing 1.9% to reclaim the 30,000-point level for the first time in more than three decades. Meanwhile, the FBM KLCI started first trading day after the Lunar New Year break, with a gain of 0.54% or 8.65 points to settle at 1,608.07.

Source: PublicInvest Research - 16 Feb 2021