HEADLINES

Economy

US: Key Fed inflation measure rose 2.8% in March from a year ago, more than expected. Inflation showed few signs of letting up in March, with a key barometer the Fed watches closely showing that price pressures remain elevated. The personal consumption expenditures price index excluding food and energy increased 2.8% from a year ago in March, the same as in Feb, the Commerce Department reported. That was above the 2.7% estimate from the Dow Jones consensus. Including food and energy, the all-items PCE price gauge increased 2.7%, compared with the 2.6% estimate. On a monthly basis, both measures increased 0.3%, as expected and equaling the increase from Feb. (CNBC)

US: Debt-sale plan seen benefiting from Fed that stops hurting. The US Treasury is set to keep its sales of long-term debt steady in a new plan this week, with the government expected to get relief soon from the Fed’s rapid run-down in its securities holdings. Dealers anticipate the Treasury on Wed will follow through on its Jan guidance of holding off on further increases in its so-called quarterly refunding auctions, which are now approaching the record sizes seen in the Covid crisis. (Bloomberg)

EU: Eurozone consumers' 12-month inflation expectations lowest since Dec 2021. Euro area consumers' inflation expectations for the next 12 months hit their lowest since Dec 2021, results of a monthly survey by the European Central Bank showed. Median expectations for inflation over the next 12 months eased to 3.0% from 3.1% in Feb, the ECB Consumer Expectations Survey for March showed. (RTT)

EU: Spain unemployment rate rises in Q1. Spain's unemployment rate increased at the start of the year, quarterly data from the statistical office INE revealed. The unemployment rate rose to 12.29% in the first quarter from 11.8% in the previous quarter. The number of unemployed increased 117,000 to 2.98m. Compared to last year, unemployment decreased 208,500. (RTT)

Japan: BoJ keeps monetary policy unchanged. The Bank of Japan left its key interest rate unchanged and raised its inflation outlook. The policy board unanimously decided to hold the uncollateralized overnight call rate to remain at around 0% to 0.1%. The board also voted to conduct its bond purchase programme in line with the decisions made at the March meeting. In the Outlook for Economic Activity and Prices report, the bank said inflation is set to rise through fiscal 2025 driven by the rise in crude oil prices and waning of the effects of government's economic measures. The bank today upgraded its inflation outlook for the fiscal 2024 to 2.8% from 2.4%. Likewise, the projection for the fiscal 2025 was lifted to 1.9% from 1.8%. Inflation is seen at 1.9% in the fiscal 2026. (RTT)

Singapore: Industrial production tumbles 9.2%. Singapore's industrial production declined at the fastest pace in seven months in March, data from the Economic Development Board revealed. Industrial production declined 9.2% YoY in March, reversing 4.4% growth in Feb. The expected fall was 1.5%. Further, this was the steepest drop since Aug 2023, when production had risen 12.9%. (RTT)

Markets

D&O (Outperform, TP: RM4.20): Optimistic of revenue growth, plans new RM200m facility. D&O Green Technologies is optimistic of at least 10% revenue growth this year and plans to build another facility in anticipation of significant growth over the next decade. The third plant, spanning 1m sq ft, is expected to generate annual revenue of RM2bn once it’s fully operational. Construction is slated to begin in 2024 for completion in two years at a cost of RM200m. The management is optimistic of achieving double-digit revenue growth in 2024. (The Edge)

Majuperak: Forms renewable energy partnership with Shizen Group. Majuperak Holdings has inked a MoU with Shizen International Inc, to explore opportunities to set up ground-mounted or floating solar photovoltaic-based renewable energy (RE) generation projects in Perak. The Shizen Energy Group has successfully developed 1,321.7MW of RE capacity in Japan and internationally. This initiative aligns with the National Energy Transition Roadmap, which seeks to enhance sustainable energy production in the country. (StarBiz)

Microlink; Bags RM56m contract from Bank Islam Brunei. Microlink Solutions has clinched a contract valued at RM56.5m to deploy and manage a new core banking system for Bank Islam Brunei Darussalam. Microlink’s subsidiary, Microlink System SB has inked three agreements covering software provision, services, and maintenance for the project. The implementation phase is slated to span one year, commencing on 24 April 2024.The project, inclusive of a five-year maintenance and support period, is poised to bolster revenue, earnings per share, and net assets per share for FY2025. (The Malaysian Reserve)

MAA: To sell entire stake in Turiya for RM53m. MAA Group has agreed to sell its entire 57.8% stake in Turiya for RM52.9m, or 40 sen a share, to Khidmat Kejora SB (KKSB) and Neo Pixel SB (NPSB). MAA acquired the Turiya stake in June 2021 from lthmaar Bank BSC for RM23.8m or 18 sen a share. The move resulted in it having to make an unconditional mandatory general takeover offer (MGO) for the remaining Turiya shares at 18 sen a share. (StarBiz)

Gadang: Bags RM280m contract for Klang Valley data centre development. Gadang Holdings has clinched a RM280m contract to undertake the design and development of Klang Valley Data Centre Block 2 in Cyberjaya from TM Technology Services SB. The contract was awarded to Gadang’s wholly owned unit, Gadang Engineering SB, for a duration of two years, spanning from 24 April 2024 to 23 April 2026. The company anticipates that this contract will have a positive impact on its earnings and subsidiaries starting from the financial year ending 31 May 2025. (The Malaysian Reserve)

YNH: Has remedied technical default involving sukuk programme. YNH Property (YNH) said it has remedied the technical default involving its sukuk programme that led to a downgrade of the company's rating by MARC Ratings recently, and assured that it will maintain compliance to prevent further technical defaults. The balance for the second monthly payment due 26 April 2024 has also been met by topping up the fund in the SPA account. It has issued a clarification to bondholders via Malaysian Trustee on the issue, as well as its mall sale proceeds, bond collateral and the appointment of a new auditor. (The Edge)

MARKET UPDATE

The FBM KLCI might open stronger today after US stocks closed higher last Friday, buoyed by a rally in megacap growth stocks following robust quarterly results from technology heavyweights Alphabet and Microsoft in addition to moderate inflation data. US Commerce Department data showed monthly inflation rose moderately in March on an annual basis while coming in line with estimates on a monthly basis. The report offered some relief to financial markets spooked by worries of stagflation a day after data showed inflation surging and economic growth slowing in the first quarter. After the data, money markets priced in a firmer chance of a Federal Reserve rate cut in September. The yield on the benchmark 10-year Treasury note fell after the data, last standing at 4.6630 %. The Dow Jones Industrial Average rose 153.86 points, or 0.40 %, to 38,239.66, the S&P 500 gained 51.54 points, or 1.02 %, to 5,099.96 and the Nasdaq Composite gained 316.14 points, or 2.03 %, to 15,927.90. Europe's benchmark stock index had its biggest one-day gain in more than three months on Friday, propelled by banking and industrial stocks, while the technology sector got a boost from upbeat results from U.S. megacaps. The pan-European STOXX 600 index closed 1.2% higher, notching up a weekly gain of 1.8%, its biggest since late January.

Back home, Bursa Malaysia closed higher last Friday with the key index rising 0.4%, driven by a positive outlook on the local bourse and amid an upbeat performance by regional peers. At the closing bell, the FBM KLCI rose 5.91 points to 1,575.16. Elsewhere in the region, Hong Kong’s Hang Seng added 2.12%, Singapore’s STI lost 0.23% and ASX 200 gave away 1.39%.

Source: PublicInvest Research - 29 Apr 2024