Economy

US: Crude oil inventories pull back in line with estimates. After reporting a sharp increase in US crude oil inventories in the previous week, the Energy Information Administration released a report showing crude oil inventories pulled back in line with estimates in the week ended May 3rd. The report said crude oil inventories fell by 1.4m barrels last week after surging by 7.3m barrels in the previous week. The decrease matched economist estimates. At 459.5m barrels, US crude oil inventories are about 3% below the five-year average for this time of year, the EIA said. Meanwhile, the report said gasoline inventories rose by 0.9m barrels last week but remain about 2% below the five-year average for this time of year. (RTT)

US: Wholesale inventories decrease 0.4% in March, in line with estimates. The Commerce Department released a report showing a pullback by US wholesale inventories in the month of March. The report said wholesale inventories fell by 0.4% in March after rising by 0.2% in Feb. The decrease by wholesale inventories matched economist estimates. Inventories of non-durable goods led the way lower, tumbling by 1.1% in March after sliding by 0.5% in Feb. The Commerce Department also said inventories of durable goods edged down by 0.1% in March after climbing by 0.7% in Feb. Meanwhile, the report said wholesale sales dove by 1.3% in March after surging by 2.0% in the previous month. (RTT)

EU: German industrial production shrinks for first time this year. German industrial output fell for the first time this year — highlighting the sector’s enduring challenges within Europe’s largest economy. Production decreased 0.4% in March, led by drops in consumer and intermediate goods, and energy, the statistics office said. That was still better than the 0.7% decline estimated by economists in a Bloomberg poll. ECB president Christine Lagarde in April cited recent increases in German manufacturing output as a sign that the worst of the country’s’ troubles may be over. Following two years of near-stagnation, Germany’s economy expanded by more than anticipated at the start of 2024. It remains fragile, though, in particular due to persistent weakness in manufacturing, which plays a bigger role than in other countries in the region. (Bloomberg)

EU: Italy retail sales unexpectedly remain flat. Retail sales in Italy remained unchanged in March after rising slightly in the previous month, the statistical office ISTAT reported. The value of retail sales showed a stagnant change over the month, after a 0.1% recovery in Feb. Meanwhile, sales were expected to increase by 0.2%. ales of food items increased by 0.2% over the month, and those of non-food items dropped by 0.3%. YoY, retail sales value growth eased to 2.0% in March from 2.4% in Feb. Further, data showed that retail sales volume dropped 0.1% monthly while growing by 0.3% annually in March. (RTT)

Japan: Bank of Japan issues stronger warning over yen's impact on policy. The Bank of Japan (BOJ) may take monetary policy action if yen falls affect prices significantly, governor Kazuo Ueda said, offering the strongest hint to date the currency's relentless declines could trigger another interest rate hike. Finance Minister Shunichi Suzuki also voiced "strong concern" over the negative impact of a weak yen, such as boosting import costs, and repeated Tokyo's readiness to intervene in the market to prop up the sagging currency. The remarks, which followed a meeting between Ueda and Prime Minister Fumio Kishida, underscore the resolve of the government and central bank to cooperate in keeping damaging yen falls in check. (Reuters)

Indonesian: Central bank sees no need for more rate hikes. Indonesia's central bank will likely not need to raise interest rates further as last month's hike has attracted capital inflows and stabilised the currency amid a better-than-expected global backdrop, governor Perry Warjiyo said. In a rare media briefing, Warjiyo said Bank Indonesia (BI) was making efforts to further strengthen the rupiah's exchange rate against the US dollar, beyond 16,000 per dollar, around where the currency is presently hovering. "The decision regarding the BI rate will always take into account inflation outlook, exchange rate and economic growth," the governor said. (Reuters)

South Korea: Has USD6.93bn current account surplus. South Korea posted a current account surplus of USD6.93bn in March, the Bank of Korea said. That's up from USD6.86bn in Feb. The goods account recorded an USD8.09bn surplus as exports increased annually by 3.0% to USD58.27bn and as imports decreased by 13.1% to USD50.18bn, both compared to one year earlier. The services account posted a USD2.43bn deficit owing to deficits in the use of intellectual property and travel accounts. (RTT)

Taiwan: Trade surplus shrinks in April. Taiwan's foreign trade surplus decreased somewhat in April as imports rose faster than exports, preliminary figures from the Ministry of Finance revealed. The trade surplus dropped to USD6.46bn in April from USD6.83bn in the corresponding month last year. The surplus also declined from USD8.68bn in March. Exports grew 4.3% YoY in April, which was much slower than the 18.9% surge in the prior month. Economists had forecast 10.15% growth. Shipments of information, communication, and audio-video products jumped 114.6% annually in April, while those of parts of electronic products slid by 17.7%. Imports grew 6.6% annually in April after a 7.1% rebound in March. That was below the 7.6% rise expected by economists. (RTT)

Markets

IHH Healthcare (Outperform, TP: RM7.65): Invests in Belun Technology for devices to tackle sleep disorders. Hospital operator IHH Healthcare said it has invested in Belun Technology Company Ltd that makes devices tackling sleep apnea and other sleep disorders. Financial details of the transaction were not disclosed. Belun’s medical-grade at-home wearable sleep test device and software are the first of its kind cleared by the US Food and Drug Administration, aimed at making detection and diagnosis of sleep apnea more convenient and accessible to patients. (The Edge)

Artroniq: Sells Penang property for RM1.8m. Artroniq’s 60% owned subsidiary, Fujim Digital SB has proposed to dispose of a piece of land in Ayer Itam, Penang and a unit of the single-storey semi-wooden house in Penang for RM1.8m. In a filing with Bursa Malaysia, Artroniq said the build-up area of land and property are approximately 6,011sqft. Fujim acquired the property in Aug 2018 with a cost of investment of RM1.5m. Artroniq said the proceeds from the proposed disposal will be utilized to discharge any charges created on the property and the balance for working capital. (SunBiz)

Fitters: Metronic Global Director Wong emerges as a substantial shareholder of Fitters. Fitters Diversified saw Doris Wong Sing Ee emerge as its substantial shareholder after she acquired 45m shares in the fire protection equipment supplier. Wong acquired 45m Fitters shares from the open market on May 3, raising her stake in the fire protection equipment supplier to 5.12%, Fitters bourse filing. While the acquisition price was not disclosed, a rough calculation estimates the block of shares to be worth RM2.25m, based on Fitters’ closing price of five sen on May 3. (The Edge)

Widad: Largest shareholder appoints Industronics to manage Langkawi golf course, hotel development. Industronics said it has been appointed as the project management company to develop a hotel and golf course on a 155-acre parcel of land in Langkawi. The company said its subsidiary Olympex SB has signed a project management contract with Temoyong Land SB (TLSB) for the development, which is located in Seksyen 4 of Bandar Padang Matsirat on the island. TLSB is owned by Widad Group’s largest shareholder Tan Sri Ikmal Opat Abdullah. TLSB secured the development rights from Langkasuaka Land SB, which is owned by Widad Business Group SB and also linked to Ikmal. Industronics’ executive director Datuk Chu Boon Tiong is also a director in TLSB. (The Edge)

VSTECS: Appointed as the first Amazon Web Services distributor in Malaysia. Vstecs through its wholly-owned subsidiary, VSTECS KU SB been named as the first Amazon Web Services (AWS) distributor in Malaysia. In a statement, the ICT distributor said it would offer AWS’s portfolio of highly scalable and cost-effective cloud services, including compute, storage, databases, analytics, networking, and application services to enterprises in the private and public sectors in Malaysia. It added that its extensive network of channel partners and expertise in cloud services will ensure seamless access and support for Malaysian businesses looking to migrate to the cloud or optimise their existing cloud infrastructure. (StarBiz)

MARKET UPDATE

US markets ended little changed overnight as investors took a breather from recent enthusiasm which had pushed benchmark indices higher over multiple days. All eyes continue to be on earnings reports, with some overnight weakness in technologybased stocks. The technology-heavy Nasdaq Composite slipped 0.2% as the broader-based S&P lost 0.03-points to close fractionally lower. The Dow Jones Industrial Average gained 0.4% meanwhile. European markets were mostly higher however as investors kept eyes on earnings reports within the region. Most sectors ended the day in positive territory, led by food and beverage with a 1.8% gain. Stock-wise, shares of Siemen Energy jumped 12.8% after the company raised its 2024 outlook on the back of strength in its power grid business though BMW’s fell 3.0% after the company reported a lower first-quarter profit margin amid higher costs and muted demand for its cars. Germany’s DAX and France’s CAC 40 rose 0.4% and 0.7% regardless, similarly UK’s FTSE 100 with a 0.5% gain. Asian markets were mostly lower earlier in the day, as investors waited on earnings reports from the likes of Toyota and Mitsubishi. The Shanghai Composite and Hang Seng indices fell 0.6% and 0.9% while the Nikkei 225 fell 1.6%.

Source: PublicInvest Research - 9 May 2024