HEADLINES

Economy

US: Consumer, producer price inflation data to be in the spotlight this week. After a relatively quiet start, the US economic calendar picks on Tuesday with the release of the Labor Department's closely watched report on consumer prices in the month of Feb. Economists currently expect consumer prices to climb by 0.4% in Feb after rising by 0.3% in Jan. Meanwhile, the annual rate of consumer price growth is expected to come in unchanged from the previous month at 3.1%, while annual core consumer price growth is expected to slow to 3.7% from 3.9%. (RTT)

EU: Spain retail sales growth eases sharply. Spain's retail sales growth slowed for the second straight month in January, data from the statistical office INE showed. Retail sales expanded only 0.3% YoY in Jan, following a 2.7% rise in Dec. On an unadjusted basis, retail sales growth accelerated to 2.1% from 1.1% a month ago. Data showed that retail sales posted a 0.5% monthly drop after a 1.1% decrease. Food sales dropped 1.1% and non-food sales were down 1.2%. (RTT)

UK: Long way for inflation pressures to be consistent with 2% target - BoE's Mann. Britain has a long way to go for inflation pressures to be consistent with the Bank of England's 2% target, one of the central bank's policymakers, Catherine Mann, said. "We have a long way to go on both of them (services and goods inflation)," she told an event organised by hedge fund Citadel, consultancy CEPR and the International Center for Monetary and Banking Studies. "We're nowhere near the historical relationship between services and goods that is consistent with headline at 2(%)." (Reuters)

China: Inflation turns positive for first time in 6 months. China's inflation turned positive in Feb for the first time in six months but the upturn was driven by the timing of the Lunar New Year Holiday, diminishing hopes that the deflationary pressures are over. Consumer prices posted an annual increase of 0.7% in Feb after a 0.8% decrease in Jan, data from the National Bureau of Statistics showed over the weekend. Inflation turned positive for the first time since last Aug. Beijing aims to bring inflation to 3% in 2024. The main factor that helped overall prices to rise in Feb was the slowdown in food price deflation. (RTT)

Japan: Bank of Japan leaning towards exiting negative rates in March — sources. A growing number of Bank of Japan (BOJ) policymakers are warming to the idea of ending negative interest rates this month on expectations of hefty pay hikes in this year's annual wage negotiations, four sources familiar with its thinking said. Upon ending negative rates, the central bank is also likely to overhaul its massive stimulus programme that consists of a bond yield control and purchases of riskier assets, they said. But an imminent shift is a close call as there is no consensus within the nine-member board on whether to pull the trigger in its upcoming March 18-19 meeting, or hold off at least until the subsequent meeting on April 25-26, they said. (Reuters)

Japan: GDP gains 0.1% in 4Q. Japan's GDP expanded a seasonally adjusted 0.1% on quarter in the fourth quarter of 2023, the Cabinet Office said. That was shy of forecasts for an increase of 0.3% following the 0.7% contraction in the previous three months. On an annualized basis, GDP was up 0.4% - exceeding expectations for a contraction of 0.4% after slumping 2.9% in the three month prior. (RTT)

Australia: RBA’s Hunter says households are ‘clearly struggling’ at moment. Australian households are “clearly struggling” at present they confront a number of headwinds, led by inflation, Reserve Bank Assistant Governor Sarah Hunter said a week before the board meets to decide on interest rates. “For some households, interest rate hikes are also challenging and difficult but inflation is the single biggest drag,” Hunter said in her first public remarks since taking her role overseeing economic analysis and research at the RBA in late January. She commented during a panel discussion at an Australian Financial Review business summit in Sydney on Tuesday. (Bloomberg)

Markets

MyEG: Acquires 14.4% stake in HeiTech Padu. MyEG Services’ (MyEG) wholly-owned subsidiary, MyEG Capital SB, has acquired 14.4% equity interest in Heitech Padu for RM31.25m cash. In a filing with Bursa Malaysia, MyEG said MyEG Capital acquired an aggregate of 14.57m ordinary shares representing 14.4% equity interest in HeiTech Padu via open market and direct business transactions. The acquisition is a strategic investment which will allow the company to explore potential collaborations with HeiTech to create synergies by leveraging on the respective expertise and experience of both parties as established e-government service providers. (StarBiz)

HeiTech Padu: Gets one-year extension for provision of immigration system maintenance services. HeiTech Padu announced on Monday that it has secured a contract extension worth RM13.11m for the provision of maintenance services to the Malaysian Immigration System (MyIMMs). The announcement came shortly after the disclosure that e-government services solutions provider MyEG Services has emerged as a substantial shareholder in HeiTech following the acquisition of a 14.4% stake. (The Edge)

Rexit: A slew of boardroom changes at Rexit, Seow Gim Shen made new CEO. Rexit announced a few changes to its boardroom, with the appointment of Datuk Seow Gim Shen as its new chief executive officer effective Monday, succeeding Datuk Chung Hon Cheong stepped down on the same day. Joining Seow is Wong Tack Heng, who was appointed as the chief operating officer following Si Tho Yoke Meng’s resignation, according to the general insurance services provider’s filing with Bursa Malaysia. (The Edge)

Destini: Former speaker Art Harun resigns as Destini chairman. Integrated engineering solutions provider Destini announced the resignation of former Dewan Rakyat speaker Tan Sri Azhar Azizan Harun as its independent and non-executive chairman, after a nine-month tenure at the helm. At the same time, the group redesignated its non-independent director Datuk Abd Aziz Sheikh Fadzir as the group’s new chairman. Destini told Bursa Malaysia on Monday that Azhar’s resignation was due to his personal commitments. (The Edge)

Flexidynamic: Secures RM12m job. Flexidynamic Holdings has received a letter of award worth RM12.4m from Usaha Pammek SB for the supply and installation of mechanical and electrical works at a water treatment plant in Gua Musang, Kelantan. The contract showed Flexidynamic’s expanding capabilities beyond the company’s traditional focus, moving into critical infrastructural developments. In related news, Flexidynamic also welcomed The SEA Capital SB as a substantial shareholder, with a 5.01% stake in the company. (StarBiz)

Perak Corp: Signs agreement to develop Teluk Dalam land. Perak Corp has signed a development agreement to move forward with a housing project that will help rescue the financially-troubled state-owned real estate developer. Development of the Teluk Dalam land, measuring 56.31 acres (22.78 hectare), involves a gated housing scheme with bungalow, semi-detached houses and terraced houses, Perak Corp said in an exchange filing. The project will be developed over four phases to be completed by 2032. (The Edge).

MARKET UPDATE

US markets ended mixed overnight ahead of February’s consumer price index reading, with the previous month’s uptick rattling markets and prompting US Federal Reserve officials to adopt a more cautious tone with regard to policy easing. The recent technology-led market rally also appears to have lost some momentum with share prices of the biggest winners year-to-date continuing to retreat. While the Dow Jones Industrial Average inched 0.1% higher, the S&P 500 and Nasdaq Composite fell 0.1% and 0.4% respectively. European markets were mostly lower, with investors here also keeping a close watch on US inflation data. UK’s FTSE 100 rose 0.1%. Germany’s DAX and France’s CAC 40 slipped 0.4% and 0.1% however. Japan’s Nikkei 225 was the notable loser in Asia with a 2.2% drop after the country averted a technical recession, which may pave the way for the Bank of Japan to start raising rates. Investors also assessed China’s inflation numbers which showed it first uptick after four months of deflationary numbers. The Shanghai Composite Index rose 0.7% while the Hang Seng Index jumped 1.4% higher.

Source: PublicInvest Research - 12 Mar 2024