HEADLINES

Economy

US: Consumer credit jumps much more than expected in Jan. Consumer credit in the US increased by much more than expected in the month of Jan, according to a report released by the Fed. Consumer credit jumped by USD19.5bn in Jan after inching up by a revised USD0.9bn in Dec. Economists had expected consumer credit to climb by USD9.3bn compared to the USD1.6bn uptick originally reported for the previous month. The report said revolving credit, which includes credit cards, rose by USD8.4bn, while nonrevolving credit, such as auto loans and student loans, advanced by USD11.1bn. (RTT)

US: Home buying sentiment up; owners sense a good time to sell. US home buying sentiment rose for a third consecutive month in Feb largely because a growing view among current homeowners that no is a good time to sell their house could bode well for a muchneeded uptick in home listings. Fannie Mae’s Home Purchase Sentiment Index increased by 2.1 points in Feb to 72.8 from 70.7 in Jan. On a YoY basis, it rose by more than 25%. The share of consumers surveyed who said it is a good time to sell a home rose to 65% in Feb from 60% the month prior. That component was the largest contributor to the index's gain. (Reuters)

EU: ECB hints at June rate cut as it trims inflation forecast. The ECB lowered its annual inflation forecast, as it’s confirmed a widely expected hold of interest rates. ECB President Christine Lagarde, meanwhile, suggested market pricing for a June rate cut was coming into line with policymakers’ outlook. Staff projections for inflation in 2024 were updated to an average 2.3% from 2.7%. Looking ahead, staff see inflation hitting the ECB’s 2% target in 2025 and cooling further to 1.9% in 2026. (CNBC)

UK: Halifax house prices rise again in Feb. UK house prices increased for the fifth consecutive month in Feb vindicating the view that the property market is on a recovery path. House prices advanced 0.4% from Jan, mortgage lender Halifax reported. However, the pace of growth eased sharply from 1.2% in Jan, and was also weaker than economists' forecast for an 0.8% increase. On a yearly basis, property prices increased 1.7% following a 2.3% rise. (RTT)

China: Exports top forecasts as global demand returns. China's export and import growth in the Jan-Feb period beat forecasts, suggesting global trade is turning a corner in an encouraging signal for policymakers as they try to shore up a stuttering economic recovery. China's improved export data joins those of South Korea and Germany, and Taiwan, who all saw their shipments top expectations over the first two months of the year, with the Asian economies benefiting from a surge in demand for semiconductors. (Reuters)

Taiwan: Inflation rises to 3.08%, highest in 19 months. Taiwan CPI accelerated in Feb to the highest level in just over one-and-ahalf years, data released by the Directorate General of Budget, Accounting, and Statistics showed. The CPI, rose 3.08% YoY in Feb, faster than the 1.80% rise in Jan. Economists had forecast inflation to climb to 2.54%. Further, this was the weakest inflation rate since July 2022, when prices had risen 3.35%. Food inflation increased to 4.49% from 4.11%. (RTT)

Markets

DNeX: Plans collaboration with South Korea's paperless trade infra operator. Dagang NeXchange (DNeX) is planning to collaborate with Korea Trade Network (KTNET) on several initiatives involving port community system, electronic customs and IT consultancy services for trade facilitation. DNeX's wholly owned Dagang Net Technologies SB (DNT) has inked a two-year MoU with KTNET for the deployment of home-grown technologies from DNT and global capabilities from KTNET to assist in the transformation of the trade facilitation industry by leveraging on the expertise of both parties. (The Edge)

PLS Plantations: In tie-up to build Johor market. PLS Plantations has entered into memorandum of business exploration with China-based Guangzhou Jiangnan Agriculture Development Co Ltd to build a regional one-stop wholesale market in Johor for the processing and marketing of Malaysian agricultural produce. (StarBiz)

MUI: To sell significant stake in Pan Malaysia. Malayan United Industries (MUI) is expected to make a loss of RM1.2m from the proposed disposal of a significant portion of its stake in Pan Malaysia Holdings (PMHB) for a total consideration of RM36.7m. The diversified goup announced it had disposed of 612.1m PMHB shares, representing approximately a 65.9% equity interest in the company to Exsim Hospitality Holdings SB. It would still own about 22.4m shares, or an approximately 2.4% equity interest, in PMHB. (StarBiz)

Tex Cycle: Subscribes to perpetual MTN worth RM10m. Tex Cycle Technology (M) has subscribed to a perpetual medium-term note (MTN) with a nominal value of RM10m. Tex Cycle said the perpetual MTN offers a fixed return of 7.5% per annum, providing a steady and predictable income stream through regular semiannual interest payments until redemption. The first call date is set for five years from the issue date, with the option for the company to step up the coupon rate by 1% per annum, cumulatively each year, capped at a maximum rate of 15% per annum. (The Edge)

KESM Industries: Prepares for rising chip demand amid market shift. KESM Industries is well-equipped to meet its customers' evolving needs for more advanced chips, with the majority of its recent equipment investments now certified for volume production. The group is optimistic that the short-term softened demand in the non-automotive sector is likely to benefit from the surge in chip processing demands. (StarBiz)

Lotte Chemical Titan: Future in flux amid sale buzz. Lotte Chemical Titan Holding (LCT) clarified that Lotte Chemical Corp (LCC) is currently exploring various strategic measures regarding the company without having made any decisions. LCC, holding a 74.7% stake in LCT, is one of its major overseas subsidiaries. (The Malaysian Reserve)

Teo Seng: To distribute one treasury share for every 67 shares after record earnings. Teo Seng Capital declared non-cash dividend as its fourth interim dividend following the poultry company's record-high earnings in the year ended 31 Dec 2023. The dividend-in-specie will be in the form of treasury shares of the company, distributed on the basis of one share dividend for every 67 Teo Seng shares held by shareholders. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher after Wall Street charged ahead on Thursday, with the S&P 500 rising 1% to a record closing high while the Nasdaq composite finished up 1.5%, with the biggest boosts from technology and growth stocks on increasing investor optimism about prospects for Federal Reserve rate cuts this year. The Philadelphia Semiconductor index outperformed the broader market to finish up 3.36% at a record closing high as investors piled into chip companies, which they see as key beneficiaries to artificial intelligence related demand. The Dow Jones Industrial Average rose 130.30 points, or 0.34%, to 38,791.35. In Europe, the FTSE 100 rose 0.17%, the CAC 40 added 0.77% and the Dax 30 tacked on 0.71%.

Back home, Bursa Malaysia closed higher on Thursday as risk appetite was lifted after Bank Negara Malaysia (BNM) kept the overnight policy rate (OPR) unchanged at 3%, a move seen as supportive of the domestic economy. At the closing bell, the FBM KLCI added 4.32 points to 1,535.83 from Wednesday's close of 1,531.51. Regional markets ended mostly lower with the Hang Seng Index down 1.27% while the Shanghai Composite Index lost 0.41%.

Source: PublicInvest Research - 8 Mar 2024