HEADLINES

Economy

US: Economy cooling in first quarter; inflation appears sticky. US retail sales rebounded less than expected in Feb, suggesting a slowdown in consumer spending in the first quarter amid rising inflation and high borrowing costs. Retail sales rose 0.6% last month, the Commerce Department's Census Bureau said. Data for Jan was revised lower to show sales tumbling 1.1% instead the previously reported 0.8%. (Reuters)

EU: ECB could start rate cuts in June. The European Central Bank could start cutting interest rates in June after a reduction in euro zone inflation, ECB policymaker Pablo Hernandez de Cos said in an interview. The ECB kept borrowing costs at a record high this month but said it had made good progress in bringing down inflation and has started a preliminary discussion about dialling back monetary tightening. (Reuters)

UK: Bank of England set to play for time before first rate cut. Governor Andrew Bailey maintained the tentatively optimistic tone this week when he said inflation expectations seemed to be under control and worries about a price-wage spiral were easing. But Bailey showed no urgency about cutting Bank Rate from a 16-year high of 5.25%, saying problems with labour market data left him unsure about the jobless rate. (Reuters)

China: Central bank leaves key policy rate unchanged, as expected. China's central bank left a key policy rate unchanged while withdrawing cash from a medium-term policy loan operation on Friday, as authorities continued to prioritise currency stability amid uncertainty over the timing of expected Federal Reserve interest rate cuts. The Fed's historic monetary tightening has bolstered the dollar and pressured the yuan over the past few years. (Reuters)

China: Home prices extend declines despite support measures. China's new home prices dropped for an eighth straight month in Feb, suggesting the fragile property market is struggling to find a bottom despite a slew of measures to shore up the sector. New home prices fell 0.3% MoM, in line with Jan decline, according to Reuters calculations based on National Bureau of Statistics (NBS) data. On a YoY basis, prices fell 1.4%, faster than the 0.7% drop in Jan and the biggest decline in 13 months. (Reuters)

Japan: Feb inflation likely quickened as BOJ weighs ditching negative rates. Inflation in Japan is expected to have accelerated further in Feb as the effects of government fuel subsidies faded, a Reuters poll showed, boosting expectations the BOJ will end negative interest rates soon. The nationwide CPI, which excludes fresh foods but includes energy items, was seen up 2.8% in Feb from a year ago, rising at the fastest pace since Oct, the median forecast of 15 economists showed. (Reuters)

India: Feb trade deficit at USD18.7bn, in line with forecast. India's merchandise trade deficit in Feb stood at USD18.7bn billion, according to a Reuters calculation based on export and import data released by the government on Friday. Economists had expected the country's Feb trade deficit to be USD18.3b, according to a Reuters poll. (Reuters)

Markets

Binastra: Wins RM370m construction contract. Binastra Corp has secured a RM370m construction contract from Exsim Jalil Link SB. Binastra said the contract is for construction and completion of the proposed development of three blocks of suites apartments (residential) (1558 units) at Bukit Jalil, Kuala Lumpur. The contract shall complete within 41 months from the date of commencement which will be notified in due course by architect’s instruction. Binastra said the contract is expected to contribute positively to the earnings and net assets per share of the group for the financial years ending Jan 31, 2025 to 2028. (StarBiz)

RHB Bank: Subscribes additional 3.4m shares in Boost Bank. RHB Bank has subscribed for an additional 3.4m new Boost Bank shares for RM3.4m cash to maintain its 40% equity interest in the digital bank. RHB Bank said Boost Holdings, an indirect subsidiary of Axiata Group, had also subscribed for an additional 5.1m new Boost Bank shares worth RM5.1m to maintain its 60% equity interest in Boost Bank. (Bernama)

Petronas Gas: Commits to compressor station project costing up to RM650m. Petronas Gas (PetGas) has made the final investment decision for the development of a new compressor station costing up to RM650m in Jeram, Selangor. The project involves construction of a two-unit gas compressor to boost capacity of the Peninsular Gas Utilities (PGU) pipeline network to meet rising demand for gas starting from 2026. This project is targeted to be completed in 2026. It is part of the PGU III expansion and falls under the incentive-based regulation framework, which will play a crucial role in determining the cost recovery of the project through the transmission pipeline tariff. (The Edge)

Microlink: Plans RM89m rights issue to finance debt repayment, working capital. Microlink Solutions plans to raise up to RM89.4m via a rights issue of redeemable preference shares (RPS) with detachable warrants to repay its bank borrowings and finance working capital. The issue will offer up to 89.37 million redeemable preference shares (RPS) at RM1 each, with 268.1m free detachable warrants, on a basis of one RPS and three warrants for every 12 existing shares. The tenure of the RPS is five years and it has a dividend rate of 6% per annum based on the issue price. (The Edge)

Fajarbaru: Wins Australian Defence contract, expands at RMAF Base in Penang. Fajarbaru Builder Group along with Avionics Pty Ltd (APL), has secured a delivery phase (Early Works) contract from the Australian Department of Defence, with the group’s portion of the contract worth RM11.04m. Fajarbaru said the award further expands its involvement in the design and construct infrastructure project to redevelop military facilities at the Royal Malaysian Air Force (RMAF) Base Butterworth, Penang, Malaysia. (StarBiz)

MN Holdings: Appoints ex-Tenaga chief Baharin as chairman. MN Holdings has appointed Tenaga Nasional Bhd’s former chief executive officer Datuk Seri Baharin Din as its independent nonexecutive chairman. Baharin served as CEO of the national utility giant for three years from March 2021 to February 2024. He was also the MD of Sabah Electricity SB from March 2007 to Nov 2011. His appointment as MN Holdings’ chairman is effective immediately. (The Edge)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks fell onFriday, led by technology-related megacaps that have propelledthis year’s rally, while investors weighed the interest rate outlookahead of next week’s Federal Reserve meeting. Shares of Adobedropped 13.7%, a day after it forecast second-quarter revenuebelow analysts’ estimates, citing competition and weak demand forits artificial intelligence-integrated photography, illustration andvideo. The Dow Jones Industrial Average fell 190.89 points, or0.49%, to 38,714.77. The S&P 500 lost 33.39 points, or 0.65%, at5,117.09 and the Nasdaq Composite dropped 155.36 points, or0.96%, to 15,973.17. European shares also dipped on Friday asrisk sentiment remained subdued due to mounting concerns theFederal Reserve may delay interest rate cuts, though strength intelecommunications stocks helped stem losses. The pan-EuropeanSTOXX 600 index ended 0.2% lower after touching record highs inthree of the past five sessions.Back home, late buying in selected heavyweights, led by telecommunications and media counters pushed Bursa Malaysia to end at its intraday high for the second day running on Friday, despite the downbeat sentiment on the regional markets. At the closing bell, the FBM KLCI rose 9.08 points to 1,552.83 from Thursday's close of 1,543.75. MSCI'S global equity index was down 0.2%, while Hong Kong's Hang Seng Index slid 1.4%.

Source: PublicInvest Research - 18 Mar 2024