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MACRO RESEARCH
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Oil war again?
by Tee
Sze Chiah
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FBMKLCI fell 8.12pts to close at 1,717.42 yesterday
amid profit taking activities. Market breath was equally negative
with losers outpacing gainers by 558 to 345. A total of 3.36b shares
worth MYR2.44b changed hands yesterday. Despite the current setback, we
believe overall trend remains bullish bias. Downside is likely
limited as the index heads towards its buffer zone at 1,705-1,713.
Expect FBMKLCI to range within 1,705 to 1,725 today. Support is at
1,705 and 1,690.
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NEWS
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Outside Malaysia:
U.S: Household wealth rose USD 2.04tr in 4Q 2016 as
financial assets and real-estate values appreciated, figures from the
Federal Reserve’s financial accounts reports, previously known as the
Flow of Funds, showed. Net worth for households and non-profit groups
rose by USD 2.04tr, or 2.3%, to a record USD 92.81tr from the prior three
months. Value of financial assets, including stocks and pension-fund
holdings, rose USD 1.59tr. Household real-estate assets climbed by USD
499.1b; owner’s equity as a share of total real-estate holdings increased
to 57.8% from 57.1%. (Source: Bloomberg)
France: Factory sentiment jumped to its highest in almost
six years last month, prompting the Bank of France to lift its forecast
for growth this quarter. Sentiment among manufacturing executives rose
two points to 104, its highest since May 2011, the central bank said. It
raised its prediction for first-quarter economic expansion to 0.4% from
0.3% a month ago. That would match the pace in the last three months of
2016. The improvement underlines the French economy may be strengthening
after years of underperformance as voters prepare to chose their next
president. The expansion is even generating jobs. National statistics
office Insee said that non-farm payrolls increased 0.4% in the fourth
quarter. (Source: Bloomberg)
China: Trade deficit masks strength risking U.S. trade
spat. Despite the rare trade deficit China chalked up in February as
imports surged the most in five years, underlying data suggest exports
are on a rising trajectory that risks fanning trade tensions with the
U.S. Shipments in January and February combined rose 13.3% and both the
official and Caixin purchasing managers indexes for exports rose last
month to the highest levels in more than two years. Analysts said
seasonal factors linked to the annual week-long Lunar New Year holiday
help explain February’s trade deficit, the first in three years. (Source:
Bloomberg)
China: Factory prices surged at the fastest pace since
2008, further lifting the outlook for global reflation as manufacturers
in the exporter to the world look to pass on higher costs. Producer price
index rose 7.8% YoY last month and a 6.9% YoY in January. Factory prices
only swung out of 4 1/2 years of deflation in September. (Source:
Bloomberg)
China: Money supply growth slows amid campaign to contain
risk. China’s broadest measure of new credit moderated in February as
shadow banking activities slumped, signaling policy makers are making
good on pledges to cut leverage and deflate asset bubbles. Aggregate
financing was CNY 1.15t (USD 166b) while new yuan loans stood at CNY
1.17t. M2 money supply increased 11.1% YoY. (Source: Bloomberg)
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Other News:
Oil & Gas: Petronas in 10-year deal to supply LNG to
Hokkaido Electric Power. Petronas, via subsidiary Malaysia LNG S/B
(MLNG), signed a 10-year liquefied natural gas (LNG) supply agreement
with Hokkaido Electric Power Company (HKE) on March 2, 2017. HKE is primarily
engaged in the generation and distribution of electricity in the Hokkaido
region. It is one of the utility companies in Japan responsible for the
stable supply of electricity to Hokkaido Prefecture. MLNG will deliver up
to 130,000 tonnes of LNG per year to HKE's receiving facilities. (Source:
The Sun Daily)
LBS Bina: To raise MYR165.66m for projects. LBS Bina Group
is planning to sell convertible preferance shares as it is seeking to
raise up to MYR165.66m for projects in Selangor and Johor. The proposed
rights issue entails the issuance of up to 150.59m redeemable and
convertible preference share (RCPS) units on a basis of one RCPS for
every five existing LBS shares to the entitled shareholders. The
indicative price for the RCPS is RM1.10 a unit with 6% of proposed
dividends. (Source: The Star)
Datasonic: Clinches MYR79.7m contract for additional 2.8m
passports. Datasonic Group has clinched a MYR79.7m contract from the Home
Affairs Ministry to supply an additional 2.8m units of Malaysian
passports for the Immigration Department. The total contract value has
increased to MYR364.4m from MYR284.7m, for the supply of 12.8m units from
10m units. It is required to furnish a performance bond for MYR797,160,
which is valid until Jan 31, 2019. (Source: The Sun Daily)
Icon Offshore: Unit bags MYR72.06m contract. Icon
Offshore’s unit Icon Bahtera (B) S/B has secured a MYR72.06m contract for
the chartering of accommodation workboat within the group’s fleet of
vessels. The long-term charter contract was awarded by SPHI Marine S/B, a
company operating in Brunei. The contract shall commence on March 1, 2017
being the date of hire and shall continue for a period of three years
with an option for an extension period of up to two years, of which,
further extensions shall be on yearly basis. (Source: The Star)
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