Economy

US: War, pandemic, and inflation deal Fed a complex trifecta. In what now seem the simpler days of Dec, when there was only a pandemic to worry about, Federal Reserve officials rallied around the view they could tame inflation with modest interest rate hikes while the economy and labor market thrived. A war in Europe has now been layered on top of the health crisis, and when US central bank policymakers meet this week they will have to decide just how much damage has been done to that rosy outlook, and whether their hopes for an economic "soft landing" have been diminished or dashed altogether. (Reuters)

US: Consumers lift inflation, spending expectations, NY Fed survey finds . US consumers upped their outlook for where inflation will be a year from now and in three years’ time, and they expect to spend substantially more on food, gas and rent in the next 12 months, according to a survey released by the New York Federal Reserve. Expectations for where inflation will be in one year increased to 6.0% in Feb from 5.8% in Jan, returning to the high reached in Nov for the survey, which was launched in 2013. (Reuters)

EU: Euro zone yields rise, focus on monetary policy tightening . Euro zone government bond yields rose with investors bracing for the outcome of central banks’ policy meetings due this week, while hopes for progress in peace talks over Ukraine propped up risk appetite. Ukraine said it had held talks on a ceasefire, immediate withdrawal of troops and security guarantees with Russia on Monday. Tentative optimism lifted European shares and Wall Street equity futures. (Reuters)

EU: Germany wholesale price inflation accelerates in Feb . Germany wholesale price inflation accelerated further in Feb on higher raw materials and intermediate product prices, data released by Destatis showed. Wholesale price inflation advanced to 16.6% in Feb from 16.2% in Jan. MoM, wholesale prices gained 1.7%, slower than the 2.3% increase in Jan. Mineral oil products prices gained 43.6% and prices of wholesale trade of waste and scrap surged 46.0%, data showed. (RTT)

EU: Spain retail sales recover in Jan . Spain retail sales recovered in Jan, underpinned by non-food turnover, the statistical office INE said. Retail sales climbed 4.0% on a yearly basis, in contrast to the 2.4% fall in Dec. Likewise, on an unadjusted basis, retail sales were up 3.8%, reversing a 3.1% decrease a month ago. Excluding service stations, retail sales were up 3.2% annually, data showed. (RTT)

Hong Kong: Industrial production growth eases in 4Q . Hong Kong's manufacturing output increased at a softer pace in the 4Q, the provisional data from the Census and Statistics Department showed. Manufacturing output gained 5.8% YoY in the 4Q, following a 7.6% increase a quarter ago. On a quarterly basis, manufacturing output fell 1.7% in the 4Q. (RTT)

India: Consumer price inflation rises slightly . India's consumer price inflation rose slightly in Feb, data from the National Statistical Office showed. Consumer price inflation gained marginally to 6.07% in Feb from 6.01% in Jan. In the same period last year, inflation was 5.03%. (RTT)

Markets

Reservoir Link: Gets RM14.9m ECC job for PV plant from Solarvest. Reservoir Link Energy has received a letter of award for the engineering, construction and commissioning (ECC) of a 10.95MW large scale solar photovoltaic (PV) plant to be located in Perak. Its 51%-owned subsidiary Founder Energy SB had landed the project valued at RM14.9m from Atlantic Blue SB, a wholly-owned subsidiary of Solarvest Holdings. (The Edge)

Powerwell: Gets RM40m supply contract for semicon plant in Kulim Hi-Tech Park. Powerwell Holdings has secured a supply contract worth RM40 million for a semiconductor production and testing plant in Kulim Hi-Tech Park. The company said it was awarded the project by Tialoc Malaysia SB. The electrical power distribution equipment manufacturer and solution provider said the contract, which will commence by end March 2022, is targeted to be completed by Oct 2022. (The Edge)

Minetech: Unit bags RM9.49m construction job under Emerald 9 Cheras project. Minetech Resources’s wholly-owned subsidiary Minetech Construction SB (MCSB) has bagged a contract for the construction of an external link bridge and covered walkway, together with associated works, for the Emerald 9 Cheras development in Selangor. The RM9.49m contract was awarded by GLM Emerald Square (Cheras) SB. (The Edge)

Complete Logistic: To be renamed as Hextar Technologies Solutions, expand into ICT. Complete Logistic Services Bhd (CLSB) is planning to diversify into technology businesses, rename itself Hextar Technologies Solutions Bhd and dispose of its entire stake in Classic Scenic for RM32.04m to its majority shareholder Datuk Eddie Ong Choo Meng. CLSB said there was a need to diversify into information communication and technology (ICT) solutions and services to seek an alternative source of revenue and mitigate the risk of relying solely on its existing logistics business. (The Edge)

Artroniq: Ties up with StoreHub to offer F&B solution. Artroniq unit Artroniq Innovation SB has established a partnership with StoreHub SB to deploy omnichannel retail and food & beverage (F&B) solutions in more than 15,000 retail stores nationwide to facilitate digital transformation in the F&B retail sector. (SunBiz)

Cahya Mata Sarawak: Appoints Mukhnizam Mahmud as acting CFO. Cahya Mata Sarawak has appointed Mukhnizam Mahmud as the group's acting chief financial officer (CFO), effective March 15. On Aug 30, 2021, CMSB announced that a legal investigation had been launched against the group's then CFO, Syed Hizam Alsagoff, following a review of the financial management of certain investments and contracts in the past. Syed Hizam had been suspended from duty since May to facilitate the investigation. (The Edge)

Hong Seng: Kenny Khow resigns as director. Hong Seng Consolidated on March 14 announced the resignation of its executive director Kenny Khow Chuan Wah. In a bourse filing, the company cited "to pursue his personal and other work commitments" as the reason for Khow's resignation. (The Edge)

Market Update

The FBM KLCI might open with a cautious note today after US government bond yields rose to multiyear highs on Monday ahead of this week’s Federal Reserve meeting, while optimism about peace talks between Ukraine and Russia lifted European stocks and caused a sharp pullback in oil prices. The US central bank is expected to begin lifting interest rates for the first time since 2018 after its two-day policy meeting, which starts on Tuesday. The yield on the benchmark 10-year Treasury, which rises when prices fall, jumped 0.14 percentage points to 2.15%, its highest level since mid-2019. The prospect of rising rates weighed on US stocks, with Wall Street’s benchmark S&P 500 dropping 0.7% and the Nasdaq Composite — which is dominated by tech stocks that are particularly sensitive to interest rates — falling 2%. The decline in the S&P was exacerbated by falling energy stocks which were knocked by a big drop in oil prices. Oil and other commodity prices have surged since Russia invaded Ukraine last month, but peace talks between the two sides resumed on Monday afternoon and officials on both sides reported tentative progress over the weekend. The positive messaging lifted European stocks, with the continent-wide Stoxx 600 index closing 1.2% higher.

Back home, Bursa Malaysia closed marginally lower as selling pressure in most indices was cushioned by some buying interest, led by healthcare and financial stocks, amidst mixed regional peers. At 5pm, the FBM KLCI was 0.05% or 0.78 of-a-point easier at 1,567.44 from 1,568.22 at Friday’s close. Elsewhere, shares in China fell on signs that widespread lockdowns could again become commonplace as the world’s second-largest economy deals with its biggest Covid-19 outbreak since the start of the pandemic two years ago. Hong Kong’s Hang Seng index fell almost 5% and China’s CSI 300 index dropped 3.1% after 17.5mn residents of Shenzhen were put under lockdown to contain a surge in cases of the Omicron coronavirus variant. The restrictions followed similar measures in Changchun, a city of 9mn in north-east China, with cases rising in Shanghai and a number of other big cities.

Source: PublicInvest Research - 15 Mar 2022