HEADLINES

Economy

US: 'Upside' inflation risks keep Fed officials wary of turn to rate cuts. Another two Federal Reserve (Fed) officials added their voices to the wave of US central bankers downplaying any urgency to cutting rates amid sticky inflation, with one warning a failure of price pressures to further abate might even push the central bank to raise rates again. Although inflation has fallen quite a bit and will likely continue to move back toward the 2% target “we are still not yet at the point where it is appropriate to lower the policy rate, and I continue to see a number of upside risks to inflation”, Fed Governor Michelle Bowman told a gathering of the Shadow Open Market Committee in New York. Those inflation potentialities could change the outlook for future policy decisions, she said. (Reuters)

US: Job growth blows past expectations; unemployment rate falls to 3.8%. US employers hired far more workers than expected in March and continued to lift wages at a steady clip, suggesting the economy ended the first quarter on solid ground and potentially delaying anticipated Federal Reserve interest rate cuts this year. The Labor Department's closely watched employment report also showed the unemployment rate fell to 3.8% last month from 3.9% in Feb. The decline in the jobless rate reflected a sharp rebound in household employment, which more than absorbed the 469,000 people who joined the labour force. (Reuters)

EU: Eurozone Retail Sales Fall 0.5%. Eurozone retail sales decreased in Feb due to lower demand for both food and non-food items, official data revealed. Retail sales registered a monthly decline of 0.5% in Feb after remaining flat in the previous month, Eurostat reported. Economists had forecast a 0.4% drop. Sales of food, drinks, and tobacco decreased 0.4%, while non-food product sales, except automotive fuel, slid 0.2%. Sales of automotive fuel in specialized stores logged a fall of 1.4%, reversing a 0.2% increase in Jan. (RTT)

EU: German factory orders recover in Feb. Germany's factory orders expanded in Feb after declining sharply at the start of the year, signalling that the recession is likely to be relatively mild. Factory orders posted a monthly growth of 0.2% in Feb, in contrast to the revised 11.4% decline in Jan, data from Destatis showed. However, the rebound was weaker than economists' forecast of 0.8% growth. In three months to Feb, new orders advanced 2.8% from the previous three months. The increase was mainly due to large orders in Dec. Excluding major orders, incoming orders dropped 2.0% from the previous three months. (RTT)

UK: PMI signals economy is growing again in all major sectors. The UK economy’s rebound from recession appeared to be gathering momentum in March, with a key industry survey showing growth across all three main sectors for the first time in almost two years. S&P Global’s construction purchasing managers’ index edged up to 50.2 in March from 49.7 the previous month, ending a six-month period of falling output. Readings above 50 signals growth, and the score was slightly stronger than the 49.9 expected. (Bloomberg)

Singapore: Retail sales surge 8.4%. Singapore's retail sales expanded at the fastest pace in a year in Feb, largely led by higher sales demand for food and alcohol, preliminary data from the Department of Statistics showed. Retail sales surged 8.4% YoY in Feb, much faster than the 1.8% gain in Jan. Sales excluding motor vehicles grew 9.4% from last year, versus a 1.8% decrease in the prior month. There was a 31.4% jump in sales of food and alcohol from last year. Retailers in the watch and jewellery industries saw annual growth in sales of 16.8%. Sales at supermarkets and hypermarkets alone rose by 19.2%. (RTT)

India: Keeps key interest rates unchanged. India's central bank decided to retain its key interest rates, as inflation is on a declining trajectory. The Monetary Policy Committee of the Reserve Bank of India led by Governor Shaktikanta Das, voted 5-1 to leave the repo rate unchanged at 6.50%. The RBI has raised the key rate by 250 bps since May 2022 to contain inflationary pressures. The committee also decided by a majority of 5 out of 6 members to remain focused on withdrawal of accommodation to ensure that inflation progressively aligns to the target, while supporting growth. (RTT)

Markets

Farm Fresh: KWAP now a substantial shareholder as it raises stake in Farm Fresh to 5.07%. Retirement Fund Inc (KWAP) bought an additional 4m shares in home-grown dairy producer Farm Fresh, raising its stake to 5.07%. According to a bourse filing, KWAP bought the block of shares, which is equivalent to a 0.21% stake. The latest share purchase pushed the retirement fund’s shareholding beyond the 5% threshold necessary to be deemed a substantial shareholder. KWAP’s current 5.07% shareholding consists of a 2.45% direct stake and 2.62% indirect stake. The filing with the stock exchange did not reveal the purchase price. (The Edge)

UEM Edgenta: Bags contracts for hospital support services in Singapore. UEM Edgenta's indirect wholly-owned subsidiary UEMS Solutions Pte Ltd has secured contracts for the provision of hospital support services to various hospitals in Singapore for an estimated total value of RM934.57m to RM963.49m. In a filing with Bursa Malaysia, the group said the contracts have a duration of five years, commencing on April 1, 2024. The contracts are expected to contribute positively to the future earnings and net assets per share of UEM Edgenta Group. (StarBiz)

KLCC Property: Issues RM1.95bn sukuk to fund 40% stake buy in Suria KLCC. KLCC Property Holdings (KLCCP) said it has made the first issuance of Sukuk Wakalah amounting to RM1.95bn in nominal value under the RM5bn programme, to finance the acquisition of a 40% stake in Suria KLCC SB. The Sukuk Wakalah has a tenure ranging from three to five years, offering a periodic distribution rate between 3.73% and 3.85% per annum, according to KLCCP’s bourse filing. Currently, KLCCP holds a 60% stake in Suria KLCC. (The Edge)

TDM: Says no listing plan for its healthcare arm. Plantation and healthcare group TDM, whose share price has been rising recently, said that it has no plans to list its healthcare arm KMI Healthcare SB. The group is wholly committed to growing its businesses as outlined in the group's strategic plan, said TDM in a statement to Bursa Malaysia to clarify the group's recent trading activities, amid growing market valuation ascribed to its healthcare-related businesses, particularly after the RM5.7bn disposal of Ramsay Sime Darby Health Care SB (RSDH) to Columbia Asia Healthcare SB. (The Edge)

Mah Sing: Acquires JB land for RM103.75m. Mah Sing Group ’s wholly owned subsidiary Venice View Development SB has entered into a conditional sale and purchase agreement to acquire 40.4686 hectares (100 acres) for RM103.75m. Located in Johor, the site is about 400 metres from a June 2023 purchase of 30.63ha (75.7 acres) known as M Tiara. This latest acquisition is estimated to have a gross development value of RM1.45bn. (StarBiz)

Fast Energy: Pays RM14m for 28.15% stake in Vsolar via rights issue. Loss-making oil bunkering services provider Fast Energy Holdings has emerged as a substantial shareholder in Vsolar Group after subscribing to 140 shares in Vsolar’s rights issue exercise for RM14m, or 10 sen apiece. The right issue subscription has resulted in Fast Energy owning a 28.15% stake in Vsolar, which is involved in renewable energy, media publishing, software solutions and production house businesses, according to Fast Energy’s stock exchange disclosure. (The Edge)

MARKET UPDATE

US stocks advanced on Friday while Treasury yields climbed following another stronger-than-expected jobs report that could shift the Fed's stance on cutting interest rates this year. The Nasdaq Composite gained 1.2% but still closed the week down 0.8%. The S&P 500 rose 1.1% to finish the week 1% lower. The Dow Jones Industrial Average added 0.8% but lost 2.3% over the week after falling every other day. Meanwhile, European markets close lower in lacklustre short trading week with the UK’s FTSE, Germany’s DAX and France’s CAC down 0.8%, 1.2% and 1.1% respectively. Shares of Delivery Hero ended 3% lower on reports that activist investor Sachem Head built a 3.6% stake in the German delivery business and may be seeking to oust CEO Niklas Oestberg. Markets in Asia-Pacific moved lower, led by declines for Japan’s Nikkei 225 after comments from US officials fueled worries that the central bank could hold off on rate cuts. Singapore’s Straits Times and Korean’s KOSPI were down 0.8% and 1% respectively while the Hang Seng was flat. China and Taiwan markets remained shut for public holiday.

Back home, FBM KLCI was marginally higher to close at 1,555.25. Plantation and healthcare group TDM Bhd clarified that it has no intention of listing its healthcare arm, KMI Healthcare Sdn Bhd. The company emphasised its commitment to growing its businesses as outlined in its strategic plan. TDM's recent trading activities have led to a rise in its share price to a three-year high, reaching 32.5 sen amid growing market valuation ascribed to its healthcarerelated businesses.

Source: PublicInvest Research - 8 Apr 2024