HEADLINES

Economy

US:Home builder confidence rises to highest level since July, NAHB says. US home builder confidence rose in March to the highest level since July due to lower mortgage rates and an improved pricing environment amid a continued existing home inventory shortage, the National Association of Home Builders. The NAHB/Wells Fargo Housing Market Index of builder confidence rose to 51 this month from an unrevised 48 in Feb. A Reuters poll showed economists expected the outlook to remain unchanged at 48 in March. (Reuters)

EU: Germany is in recession due to first-quarter slump, survey shows. Germany is in recession and its economy will hardly grow this year, according to a Bloomberg survey. GDP will contract 0.1% in the first quarter, the March 8-14 poll showed. A month ago, analysts were predicting stagnation in the first three months of the year. The Bundesbank has also highlighted that Germany is probably in a six-month slump, though it’s made a point of saying a severe downturn is unlikely. Similarly, the Economy Ministry said most research institutes “expect GDP to fall again in the first quarter of 2024.” (Bloomberg)

EU: Eurozone monthly trade surplus rises to record high. he eurozone’s monthly trade surplus rose to a record high at the start of the year thanks to a sharp drop in the price of energy imports and an uptick in exports. The balance of trade in goods for the single currency zone reached a surplus of EUR28bn in Jan on a seasonally and calendar-adjusted basis, its highest level since the EU’s statistics agency Eurostat started tracking the data in 2002. The rebound — reflecting a similar improvement in Germany’s balance of trade — is good news for the EU economy as it underlines how the huge terms of trade shock caused by Russia’s invasion of Ukraine is being unwound. Last year, the eurozone recorded a trade surplus of EUR64bn, a marked improvement from the record EUR335bn trade deficit it suffered when natural gas and oil prices soared in 2022. (Financial Times)

UK: Asking prices for homes rise by most in 10 months. Prices of homes put up for sale in Britain have risen by the most in nearly a year as the housing market recovery boosts the confidence of sellers, with London seeing the biggest increase in demand, an industry survey showed. Property website Rightmove said asking prices for residential properties rose by 1.5% in the four weeks to 9 March, the strongest four-week increase in 10 months, although they remained nearly GBP5,000 (USD6,400) below their May 2023 peak. Prices were 0.8% higher than a year earlier. (Reuters)

China: Jan-Feb industrial output rises 7%, beats expectations. China's industrial output grew 7.0% YoY in the Jan-Febr period, data showed, accelerating from the 6.8% pace seen in Dec and beating expectations, marking a solid start for 2024 and offering tentative relief to policymakers. The reading released by the National Bureau of Statistics (NBS) was significantly above expectations for a 5.0% increase in a Reuters poll of analysts. Retail sales, a gauge of consumption, rose 5.5% in the first two months of the year, slowing from a 7.4% increase in Dec. (Reuters)

China: Property investment declines slow but sector still shaky. China's fragile housing market opened this year with slower declines in property investment and sales, buoyed by government efforts to arrest a protracted downturn in the sector, however, analysts were wary of calling an end to the downturn just yet. Property investment in China fell 9.0% YoY in the first two months of 2024, compared with a 24.0% fall in Dec 2023, National Bureau of Statistics (NBS) data showed. (Reuters)

Japan: Poised to end negative rates, closing era of radical policy. The BOJ is expected to end eight years of negative interest rates and other remnants of its unorthodox policy, making a historic shift away from a focus of reflating growth with decades of massive monetary stimulus. While the move would mark Japan's first interest rate hike in 17 years, it would still keep interest rates stuck around zero as a fragile economic recovery forces the central bank to go slow in any further rise in borrowing costs. (Reuters)

Markets

MAHB: Enters into new operating agreements with govt, extends concession by 35 years. Malaysia Airports Holdings Bhd (MAHB) and the government signed new operating and land lease agreements that extend the airport operator’s concession to manage 39 airports in the country to Feb 11, 2069, from 2034 previously. The new OAs offer MAHB “flexibility” to pursue strategic investments needed, including partnering with any external parties to improve capacity, facilities and infrastructure of the airports, the company said. (The Edge)

Epicon: Secures RM191m mixed-use development contract in Perak. Epicon has secured a contract for main building works worth RM191.1m from Maju Teluk Batik SB. The contract comprises main building works of two apartments, one carpark building, ancillary building, mechanical and electrical services, and infrastructure and landscape works for a mixed-use development in Bandar Meru Raya, Perak. It is expected to commence on March 19 and be completed in 36 months. (The Edge)

Apollo Food: Plans expansion for market growth. Apollo Food Holdings will explore expansion by developing new markets and new customer segments to maximise potential, deepen its market penetration, and increase sales, according to MD Cheah Jia Ming. “As we embark on our growth journey, we will be maintaining our listing status with a steadfast commitment to enhancing operational efficiency and an unwavering focus on product and service excellence,” he said. (StarBiz)

Ge-Shen: Gets UMA query as share hits record, announces more acquisitions. Ge-Shen Corp has received an unusual market activity query from Bursa Malaysia, after its share price surged 24.3% or 78 sen to its highest on record of RM3.99. On the same day, Ge-Shen announced it was buying a 60% stake each in Amity Research & Development SB (ARD) and Amity Technical Services & Consultancy (M) SB (ATSCM), for RM13.5m cash, to strengthen its position in the electrical and electronics (E&E) sector and expand its income stream. (The Edge)

JAG, KUB: JAG controls 62.72% stake in KUB following MGO. JAG Capital Holdings’ mandatory general offer (MGO) for KUB Malaysia at 60 sen per share, has seen it obtain 163.8m shares, which is equivalent to a 29.4% stake in KUB. KUB said this would increase JAG’s shareholding in the company to 62.7% or 349m shares. In its circular to shareholders, JAG said it does not intend to keep KUB’s listing status if it secures 90% of all KUB shares. It however said that it would maintain KUB’s listing status if it secures between 75% and 90%. (StarBiz)

ITMAX: Subsidiary gets 15-year contract worth RM77m from Kulai Municipal Council. ITMAX System, through its 65%-owned subsidiary Southmax SB, has secured a video surveillance and traffic light system services contract worth RM77.1m from the Kulai Municipal Council. The contract period spans from March 23, 2024 to March 25, 2039 and is expected to contribute positively towards the company's earnings until the end of the 15-year period. (The Edge)

GFM Services: Proposes one-for-two bonus issue of warrants. GFM Services has proposed a bonus issue of free warrants on the basis of one warrant for every two existing shares held. The exercise price of the warrants has been fixed at 21 sen per share. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after Wall Street's main indices closed higher yesterday, with megacap growth stocks such as Alphabet and Tesla supporting a rebound in technology-heavy Nasdaq while investors also waited anxiously for the US Federal Reserve's meeting this week. Google's parent Alphabet provided a sizeable boost to the market after a media report that Apple is in talks to build Google's Gemini AI engine into the iPhone. The Dow Jones Industrial Average rose 75.66 points, or 0.20%, to 38,790.43, the S&P 500 gained 32.33 points, or 0.63%, to 5,149.42 and the Nasdaq Composite gained 130.27 points, or 0.82%, to 16,103.45. European stocks gave up earlier gains and the pan-European STOXX 600 index lost 0.17%. The Bank of England meets on Thursday and is expected to keep rates at 5.25% as wage growth cools, while markets see some chance the Swiss National Bank might ease this week.

Back home, Bursa Malaysia closed marginally higher on Monday as investors exercised caution before a series of significant central bank meetings this week. The markets are awaiting the US Federal Reserve (Fed) and the Bank of Japan’s (BOJ) decisions on interest rates. At the closing, the FBM KLCI inched up 0.81 of a point to 1,553.64 from Friday’s close of 1,552.83. Asian markets closed higher after Chinese data beat expectations. Japan's Nikkei closed up 2.7%, while Shanghai's blue chip index finished up about 1%.

Source: PublicInvest Research - 19 Mar 2024