AtOneGoFinancial Blog: September 2021

Thursday, September 30, 2021

Bursa Malaysia turns mixed at mid-morning

KUALA LUMPUR, Sept 30 ― Bursa Malaysia turned mixed at mid-morning, echoing the mixed sentiment in the regional markets as renewed buying support in selected blue-chip stocks countered some of its earlier losses, dealers said.

At 11.04am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 4.04 points to 1,543.61 from yesterday’s close of 1,547.65.

It had opened 1.22 points lower at 1,546.43.

However, market breadth turned slightly positive with gainers edging past losers 406 versus 403, while 382 counters were unchanged, 1,116 untraded and 68 others suspended.

Turnover stood at 1.66 billion units worth RM973.75 million.

ActivTrades trades Anderson Alves said Asian equities were mixed on Thursday, with month and quarter-end flows causing some volatility in the market.

“In China, the official manufacturing purchasing managers index (PMI) unexpectedly shrank in September. The figures showed a reading of 49.6 versus expectations of 50,” he said in a research note today.

According to Alves, China’s National Bureau of Statistics said the contraction was driven by a slowdown in energy-intensive sectors, which was not a surprise given the well-documented and previously outlined headwinds for energy consumption due to limitations imposed by policymakers.

He said a bump in the quarterly economic recovery for China and its peers could prompt a revision to 2021 and 2022 economic projections and portfolio allocations.

“Month and quarter-end trade is expected to continue to dominate trade in the session ahead. Also on the radar is central bank speaking events, with United States Federal Reserve (US Fed) chair Jerome Powell set to deliver a speech.

“Traders will be looking for more tapering clues as US Fed policymakers are expected to make further remarks after last week's hawkish Federal Open Market Committee (FOMC) event,” he added.

Back home, heavyweights Maybank slipped 1.0 sen to RM8.09, Public Bank and IHH Healthcare went down 2.0 sen each to RM4.08 and RM6.68, respectively, while Petronas Chemicals and TNB were flat at RM8.72 and RM9.75, respectively.

Of the actives, Serba Dinamik slipped 1.0 sen to 32.5 sen and Destini added 1.0 sen to 30.5 sen, while Widad Group and Sapura Energy were flat at 38.5 sen and 12 sen, respectively.

On the index board, the FBM Emas Index depreciated 2.36 points to 11,342.66, the FBMT 100 Index was 5.30 points weaker at 11,034.53, while the FBM Emas Shariah Index rose 4.64 points to 12,398.99.

The FBM 70 jumped 84.85 points to 15,010.71, while the FBM ACE gained 18.07 points to 7,183.14.

Sector-wise, the Plantation Index improved 7.54 points to 6,355.86, the Industrial Products and Services Index went up 0.09 of-a-point to 205.16, while the Financial Services Index slid 36.40 points to 15,223.47. ― Bernama

Source: Malay Mail

A word from our sponsor:

Need Help With Your Personal Finance / Money Issue or need a coach to help you structure or just want to learn the financial skill to self manage your financial matters and retirement. iLearnFromCloud.com

Need to solve a problem quickly, now you can solve it by learning the art of problem solving Art Of Problem Solving

Feeling hungry. Latest food news from Best Restaurant To Eat Malaysian Food and Travel Blog

Memory loss. Need to organize better. Solve problem fast with Free Mind Mapping Software Mind Mapping 101

Need A Customized System Development for your business or Going Paperless XPERT TECHNOLOGIES - Empowering The Paperless Economy

Asian stocks steady as calm returns but jitters keep dollar firm

HONG KONG, Sept 30 ― Asian shares found some calm today following this week's heavy China-driven losses although the dollar sat at a more than one-year high against major peers, upheld by lingering safe-haven demand and expectations for tighter US monetary policy.

MSCI's broadest index of Asia-Pacific shares outside Japan dropped 0.06 per cent, while the Nikkei lost 0.36 per cent a day after Japan's ruling party chose softly spoken consensus-builder Fumio Kishida as its new leader and the country's new prime minister.

Worries about economic growth in China due to a worsening power crunch combined with fears of a global slowdown, hitting Asian shares yesterday.

However, the dollar index ― which measures the US currency against six major currencies ― hit its strongest level in nearly 18 months against the yen and in 14 months against the euro. It held these gains in Asian hours, and was last at 94.314.

“(The dollar) is breaking key levels and there was no real resistance to the break so that tells you there was real underlying strength to that,” said Chris Weston, head of research at Melbourne brokerage Pepperstone.

“Sometimes, it can become somewhat of a magical currency,” he said, pointing to the fact that it was supported by both global investors seeking safety and the Fed inching closer to reducing its massive asset purchases. In addition, “the ongoing US debt ceiling stand-off could briefly amplify financial market jitters and support the USD in the short-term,” said analysts at CBA in a note.

US lawmakers continue to wrangle over funding the government but face a Friday deadline to prevent a shutdown approached, something that also capped gains in US equities overnight.

In Asian equity markets, Hong Kong stocks fell 1 per cent but these were largely balanced by a 1.1 per cent rise in Australia.

Chinese blue chips gained 0.5 per cent after data published early today showed China's services sector returned to expansion in September after Covid-19 outbreaks receded. However, but factory activity unexpectedly shrank as high raw material prices and power cuts continued to pressure manufacturers.

“It is likely that the power crunch in China will persist until end-2021, as the local governments are under pressure to fulfil emission reduction goals for this year,” said Chaoping Zhu, Global Market Strategist, JP Morgan Asset Management in emailed comments.

“Investors might remain cautious on China’s corporate earnings (in the fourth quarter). Meanwhile, the volatile global market is expected to further weigh on investor sentiment in the near term.”

The other main drag on investor sentiment in greater China was embattled developer China Evergrande, whose shares swung back and forth, and were last down 2.2 per cent.

The company was due to pay interest on a dollar bond yesterday, but Reuters reported that some offshore bondholders had not been paid interest by the end of the Asian day.

Overnight, the Dow Jones Industrial Average and the S&P 500 both posted small gains but the Nasdaq Composite dropped 0.24 per cent.

Oil prices edged lower, extending losses after official figures showed an unexpected rise in US inventories.

Brent crude was down 0.14 per cent to 78.53 a barrel, US crude dipped 0.03 per cent to US$74.81 (RM313.31).

Spot gold traded at US$1,731.99 per ounce, near a seven-week low, constrained by a strong dollar. ― Reuters

Astro shares higher on collaboration with Telekom Malaysia Bhd

KUALA LUMPUR, Sept 30 ― Astro Malaysia Holdings Bhd’s shares on Bursa Malaysia rose in the early trading session today following news of the collaboration between the group’s wholly-owned subsidiary, MEASAT Broadcast Network Systems Sdn Bhd (Astro) and Telekom Malaysia Bhd (TM).

At 10.11am, the counter added 1.0 sen to RM1.02 with 490,800 shares changing hands.

In a joint statement on Wednesday, it said the collaboration signifies both companies' commitment to support the “Jalinan Digital Negara” (Jendela) initiative in providing wider broadband coverage nationwide.

In a note today, AmBank Research said the collaboration offers Astro the opportunity to launch its own fibre broadband service competitively against both unifi and Maxis’ home fibre.

“For TM, Astro’s superior content offerings, which include local shows and options for over-the-top providers such as Netflix, Disney+Hotstar and Fox channels could drive the group’s wholesale data demand and support this segment’s upward revenue trajectory,” it said.

The research firm has also maintained its “buy” call on both Astro and TM with unchanged discounted cash flow (DCF)-based fair value of RM1.83 and RM7.10, respectively.

Meanwhile, TM’s shares were traded 6.0 sen lower at RM5.70 with 1.34 million shares transacted. ― Bernama

Gamuda shares up after posting higher-than-expected FY21 results

KUALA LUMPUR, Sept 30 ― Gamuda Bhd’s shares on Bursa Malaysia increased in the early session today after the group announced higher-than-expected financial results for the financial year ended July 31, 2021 (FY2021) yesterday.

As at 9.52am, the counter rose 6.0 sen to RM3.08 with 765,700 shares changing hands.

Gamuda posted a net profit of RM214.1 million for the fourth quarter ended July 31, 2021 (Q4 2021), compared with a loss of RM12.5 million in Q4 2020 amid stronger construction and property earnings as work on all fronts accelerated on the back of rigorous COVID-19 control measures.

In a filing with Bursa Malaysia on Wednesday, the company had also attributed its performance to the absence of last year’s one-off non-cash Industrialised Building System (IBS) assets impairment of RM148.1 million.

CGS-CIMB said despite the delays, Gamuda’s Mass Rapid Transit Line 3 (MRT 3) project remains in the pipelines and could take a new approach and re-emerge as a priority project once a new project model and funding plans are in place.

“The group did not discount the likelihood of MRT 3 partially taking on the public-private partnership (PPP) model as the government is still very keen to explore ways to best roll out MRT 3,” it said in a research note today.

Separately, the research firm said Gamuda’s RM5 billion Penang South Islands (PSI) project has hit a setback, with an expected eight-month delay to allow for resubmission for environmental impact assessment (EIA) approvals.

“Despite the delays, MRT 3 remains on the cards and we expect it to feature in Budget 2022 on Oct 29,” it added. ― Bernama

Bursa Malaysia opens lower on continued profit-taking

KUALA LUMPUR, Sept 30 ― Bursa Malaysia opened lower today due to continued profit-taking in selected heavyweights, as sentiments remained weak on concerns over the World Bank’s downward revision of Malaysia’s economic growth projection for this year, dealers said.

At 9.10am, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) fell 12.49 points to 1,537.39 from yesterday’s close of 1,547.65.

It opened 1.22 points lower at 1,546.43.

Market breadth was negative with losers outpacing gainers 269 to 149, while 266 counters were unchanged, 1,623 untraded and 68 others suspended.

Turnover stood at 395.03 million units worth RM190.34 million.

In a research note today, Malacca Securities Sdn Bhd said it expected to see some follow-through buying interest in the transportation and logistics counters, given the strong momentum in the stocks yesterday.

“Besides, investors may continue to stock up on bashed-down stocks in recovery theme sectors such as aviation and consumer.

“Also, we believe that some construction and property companies are seeing significant trading interest after the tabling of 12th Malaysia Plan, ahead of Budget 2022,” it said.

It noted that the FBM KLCI finished in the positive territory yesterday, boosted by last-minute buying activities.

“Meanwhile, the energy sector staged a pullback in tandem with the decline in crude oil price, but crude palm oil (CPO) rebounded and may retest the RM4,500 per tonne level,” it said.

Among the heavyweights, Maybank slipped 2.0 sen to RM8.08, Public Bank declined 3.0 sen to RM4.07, Petronas Chemicals and IHH Healthcare went down 4.0 sen each to RM8.68 and RM6.66, respectively, while TNB added 1.0 sen to RM9.76.

Of the actives, Sapura Energy eased half-a-sen to 11.5 sen, Serba Dinamik slipped 1.0 sen 32.5 sen, while Widad Group rose 1.0 sen to 39.5 sen and Impiana Hotels earned half-a-sen to 9.0 sen.

CEKD added 9.0 sen to 57 sen, Encorp improved 9.5 sen to 69 sen, DNex eased half-a-sen to 80 sen and Pegasus Heights was flat at 1.0 sen.

On the index board, the FBM Emas Index declined 63.70 points to 11,281.32, the FBMT 100 Index shed 66.08 points to 10,973.75, the FBM Emas Shariah Index went down 77.41 points to 12,316.94, the FBM 70 was 0.81 of-a-point higher at 14,926.67, and the FBM ACE narrowed by 3.22 points to 7,161.85.

Sector-wise, the Industrial Products and Services Index eased 0.82 of-a-point to 204.25, the Plantation Index dipped 33.55 points to 6,314.77, and the Financial Services Index slipped 69.42 points to 15,190.45. ― Bernama

Ringgit opens lower against US dollar

KUALA LUMPUR, Sept 30 ― The ringgit opened lower against the US dollar today on lack of buying interest, said a dealer.

At 9am, the local note stood at 4.1870/1890 against the greenback from yesterday's closing of 4.1830/1855.

The dealer said lack of market moving catalysts, coupled with the stronger greenback due to higher US Treasury yields, dragged down the local note’s performance in the early session.

“However, the steady benchmark Brent crude oil prices capped the ringgit’s fall,” he said.

At the time of writing, Brent crude oil rose 0.28 per cent to US$78.86 (RM330.85) per barrel.

The ringgit performed better against a basket of major currencies.

The local note rose against the Singapore dollar to 3.0760/0777 compared with 3.0821/0844 at yesterday's close and improved versus the British pound to 5.6277/6304 from 5.6579/6613 previously.

It also appreciated vis-a-vis the euro to 4.8586/8609 from 4.8799/8828 yesterday and strengthened against the Japanese yen to 3.7417/7435 from 3.7586/7609. ― Bernama

China factory activity unexpectedly shrinks, services recover

China's economy rapidly recovered from a pandemic-induced slump last year, but momentum has weakened in recent months, with the vast manufacturing sector facing heightened costs, production bottlenecks, and more recently, electricity rationing. ― Reuters pic

BEIJING, Sept 30 ― China's factory activity unexpectedly shrank in September as high raw material prices and power cuts pressured manufacturers in the world's second-largest economy, while the services sector returned to expansion after Covid-19 outbreaks receded.

The official manufacturing Purchasing Manager's Index (PMI) was at 49.6 in September versus 50.1 in August, data from the National Bureau of Statistics (NBS) showed today, slipping into contraction for the first time since February 2020.

Analysts in a Reuters poll had expected the index to remain steady at 50.1, unchanged from the previous month.

The 50-point mark separates growth from contraction.

China's economy rapidly recovered from a pandemic-induced slump last year, but momentum has weakened in recent months, with the vast manufacturing sector facing heightened costs, production bottlenecks, and more recently, electricity rationing.

A shortage of coal, tougher emissions standards and strong demand from manufacturers and industry pushed coal prices to record highs and triggered widespread curbs on electricity usage in at least 20 provinces and regions.

Higher raw material prices, especially of metals and semiconductors, have also pressured profits of manufacturers. Earnings at China's industrial firms in August slowed for the sixth straight month.

On a more sanguine note, the official non-manufacturing PMI in September was at 53.2, bouncing back from 47.5 in August, data from the NBS showed.

Last month, Covid-19-related restrictions drove services sector activity into sharp contraction for the first time since the height of the pandemic last year.

The official September composite PMI, which includes both manufacturing and services activity, stood at 51.7 versus 48.9 in August. ― Reuters

Tokyo stocks trade lower on US government shutdown fears

TOKYO, Sept 30 ― Tokyo stocks opened higher but dipped into negative territory quickly today, as worries about a potential US government shutdown overwhelmed support from a cheaper yen.

The benchmark Nikkei 225 index was down 0.10 per cent, or 28.84 points, at 29,515.45 about half an hour after the opening bell, while the broader Topix index traded down 0.18 per cent, or 3.58 points, at 2,034.71.

Investors remain cautious ahead of the deadline for the US debt ceiling bill later in the day, fearing a potential government shutdown, analysts said.

“As for whether the US can avoid a government shutdown, ... focus today will be on Congress passing a continuing resolution before the end of Thursday to fund the government through to December 3,” senior analyst Tapas Strickland of National Australia Bank said in a note.

Democrats announced that the US Senate will vote today on legislation to fund federal agencies, which is likely to avert the shutdown.

The dollar fetched ¥111.90 (RM4.18) against ¥111.98 in New York and ¥111.43 in late Tokyo hours yesterday.

There was no strong reaction to Japan's ruling Liberal Democratic Party choosing Fumio Kishida as their new leader and the country's next prime minister.

Seen as a safe pair of hands likely to continue existing government policy, Kishida will be approved as prime minister by parliament on October 4.

On Wall Street, stocks closed mixed with the benchmark Dow ending up 0.3 per cent at 34,390.72 but tech shares falling again, as investors reassess equity bets in the expectation of higher interest rates.

In Tokyo, shipping firms dived with Mitsui O.S.K. Lines dropping 7.21 per cent to ¥7,840 and Nippon Yusen down 7.80 per cent at ¥8,630.

Many other exporters were lower, with Nippon Steel trading down 2.19 per cent at ¥2,019, Toyota slipping 2.55 per cent to ¥2,020 and Sony off 0.84 per cent at ¥12,335. ― AFP

AstraZeneca lifts FTSE 100 to its best session in one week

The FTSE 100 rose 1.1 per cent to mark its best day in a week. ― Reuters pic

LONDON, Sept 30 ― London's FTSE 100 ended higher yesterday, as AstraZeneca boosted healthcare stocks on completing a takeover deal to sharpen its focus on rare-disease drugs.

AstraZeneca rose 4.2 per cent and was the top boost to the blue-chip FTSE 100 after the pharmaceutical company said its newly acquired Alexion division would buy the remaining equity in Caelum Biosciences in a deal that could be worth up to US$500 million (RM2.1 billion).

The FTSE 100 rose 1.1 per cent to mark its best day in a week. HSBC Holdings advanced 2.1 per cent and led the banking sub-index 1.7 per cent higher, while Investec, Natwest Group and Lloyds rose between 0.7 per cent and 2.2 per cent.

The blue-chip index has risen 10.1 per cent so far this year on highly accommodative central bank policies and optimism around steady Covid-19 vaccination drives. But in September, it is set to record its worst month since January this year as inflation and economic slowdown worries weighed on investor sentiment.

“To counter the threat posed by rising prices they (central banks) face the prospect of dialling down economic support at a time of mounting uncertainty over the recovery,” said Russ Mould, investment director at AJ Bell.

The benchmark UK 10-year bond yield slipped on Wednesday but has gained nearly 50 basis points in the past eight trading sessions, as signs of a more persistent inflation pattern raised bets of a sooner-than-expected interest rate hike. Banks generally perform better in a higher interest rate environment.

Britons have reported a first worsening in their financial situation in more than a year as inflation pushes up the cost of living, a survey showed.

The domestically focussed mid-cap index advanced 0.1 per cent, with travel and leisure stocks among the top gainers.

Among stocks, clothing retailer Next Plc rose 3.9 per cent after raising its full-year profit guidance.

Upper Crust owner SSP Group fell 5.4 per cent over a slow recovery as sales remained at half of the pre-pandemic levels.

Morrisons gained 1.4 per cent on report that a US$9.5-billion fight for the British supermarket will be decided at an auction on Saturday. ― Reuters

Central bank heads see shortages as key limit to recovery

President of the European Central Bank Christine Lagarde says the uncertainty around supply issues is a ‘threat to growth’. — Reuters pic

FRANKFURT, Sept 20 ― Acute bottlenecks in supply are driving inflation and holding back the recovery from the coronavirus pandemic, the heads of several major central banks said yesterday.

The uncertainty around supply issues was a “threat to growth”, President of the European Central Bank Christine Lagarde said at the close of the Frankfurt institution's annual forum.

“How long those bottlenecks will take to be resolved and to fade out remains to be seen,” Lagarde said.

She was joined virtually on the closing panel by the Chair of the US Federal Reserve Jerome Powell who said bottlenecks were “holding inflation up” longer than expected.

Prices rose at a rapid 4.2 per cent pace in July, on the Fed's preferred inflation measure, the personal consumption expenditures (PCE) price index, far above its two percent goal.

Shortages in raw materials and key components which have affected companies worldwide were “not getting better” Powell said, and could continue to have an effect into next year, although the Fed's expectations for growth remain “strong”.

Missing supplies were “really holding back the economy”, said the Governor of the Bank of England Andrew Bailey, and the challenge for the coming months was to “get through this period of uneven growth” caused by shortfalls.

The shortages did not have a “common cause”, Bailey said, and could not all be solved by changes to central bank policy.

In the UK, a lack of lorry drivers linked to the country's exit from the EU has caused scarcities of fuel and food, leading to queues at petrol stations and empty supermarket shelves.

Meanwhile, a global lack of semiconductors, a key component in cars and consumer electrical goods, has been exacerbated by coronavirus lockdowns at key points in the supply chain. ― AFP

European stocks rise on AstraZeneca, ASM strength

FRANKFURT, Sept 30 ― European stocks rose yesterday after one of the worst market routs this year as AstraZeneca lifted healthcare stocks on a deal to buy a rare disease drugmaker, while chip equipment producer ASM gained on an upbeat earnings forecast.

British drugmaker AstraZeneca jumped 4.2 per cent after saying it will take full control of Caelum Biosciences in a deal worth up to US$500 million (RM2.1 billion).

The pan-European STOXX 600 index rose 0.6 per cent, with investors gradually looking past a 2.2 per cent fall in the previous session.

“If investing is often about climbing a wall of worry, then market participants arguably face the equivalent of the Matterhorn right now but on Wednesday investors seemed to be undaunted,” said Russ Mould, investment director at AJ Bell.

Global stocks tumbled on Tuesday as US government bond yields surged on growing expectations of faster interest rate hikes by the Federal Reserve and steered investors away from high-growth technology stocks.

The European tech sector slipped 0.7 per cent extending its declines from Tuesday. ASML Holding NV, one of the key suppliers to computer chip makers, reversed earlier gains to trade 2.6 per cent lower even after raising financial targets.

ASM International jumped almost 3.9 per cent a day after it raised its third-quarter order intake guidance.

After smooth gains in the past seven months, stock markets have faced volatility in September with investors nervous about major central banks withdrawing pandemic-era stimulus amid signs of higher inflation.

The benchmark STOXX 600 is on course to end September 3.2 per cent lower, leaving it with marginal gains on the quarter.

“Rates are still low in a historical context, but a sharp sustained increase will unnerve markets if the economy is caught short of time to adapt to tighter credit conditions,” said Jim Smigiel, chief investment officer at SEI.

A recent surge in commodity prices, supply-chain constraints, the Evergrande debt crisis and a power crunch in China have all hurt global growth sentiment.

Data showed Spain's inflation surged to a 13-year-high in September.

British clothing retailer Next climbed 3.9 per cent to a record high after it raised its full-year profit outlook for the fourth time in six months.

Meanwhile, the oil and gas index slipped back from over one-year highs as a recent rally in crude prices petered out following an unexpected build in US inventories.

Royal Mail Plc dropped 8.8 per cent to the bottom of the UK's FTSE 100 after UBS downgraded the stock to “sell” from “buy”. ― Reuters

S&P 500, Dow gain amid inflation concerns, debt ceiling debate

The S&P 500 index and the Dow Jones Industrial Average advanced, but the Nasdaq Composite closed lower as Treasury yields halted their ascent. — Reuters pic

NEW YORK, Sept 30 ― Wall Street ended firmer yesterday in a partial rebound from the previous day's broad sell-off, with remarks from US Federal Reserve Chairman Jerome Powell and the ongoing debt ceiling debate keeping a lid on gains.

The S&P 500 index and the Dow Jones Industrial Average advanced, but the Nasdaq Composite closed lower as Treasury yields halted their ascent. Defensive sectors took the lead as investors sought stability in the volatile market.

All three remain on course to post monthly declines, with the bellwether S&P 500 snapping a seven-month winning streak.

“The same story we've seen for a couple of weeks,” said Oliver Pursche, senior vice president at Wealthspire Advisors, in New York.

“Investors are concerned about three things: the eventual taper of bond purchases by the Fed, ongoing inflation with Chairman Powell saying it's going to stick around longer than initially expected, and the debt ceiling issue that congress is grappling with.”

Powell, speaking at a European Central Bank event, expressed frustration over persistent supply chain woes which could keep inflation elevated for longer than expected.

The stock market strengthened following his remarks.

“Powell has been very good at delivering the news officially that everyone knows is coming,” Pursche said.

Wrangling continued on Capitol Hill over funding the government as the Friday deadline to prevent a shutdown approached, with mounting concerns over a US credit default.

US Treasury yields paused after a runup in recent days as the debt ceiling debate unfolded in Washington.

The Dow Jones Industrial Average rose 90.73 points, or 0.26 per cent, to 34,390.72; the S&P 500 gained 6.83 points, or 0.16 per cent, at 4,359.46; and the Nasdaq Composite dropped 34.24 points, or 0.24 per cent, to 14,512.44.

Of the 11 major sectors in the S&P 500, materials suffered the largest percentage drop, with utilities leading the way with a 1.3 per cent gain.

Boeing Co provided the biggest lift to the Dow following China's aviation regulator's successful 737 MAX test. The planemaker's shares rose 3.2 per cent.

Discount retailer Dollar Tree Inc jumped 16.5 per cent after increasing its buyback authorisation by US$1.05 billion (RM4.4 billion) to US$2.5 billion.

Drugmaker Eli Lilly & Co gained 4.0 per cent on Citigroup's rating upgrade to “buy” from “neutral.”

Advancing issues outnumbered decliners on the NYSE by a 1.26-to-1 ratio; on Nasdaq, a 1.34-to-1 ratio favoured decliners.

The S&P 500 posted seven new 52-week highs and two new lows; the Nasdaq Composite recorded 38 new highs and 151 new lows.

Volume on US exchanges was 11.42 billion shares, compared with the 10.45 billion average over the last 20 trading days. ― Reuters

Global shares staunch bleed after worst selloff since January

The Dow Jones Industrial Average rose 240.91 points, or 0.7 per cent, to 34,540.9, the S&P 500 gained 27.86 points, or 0.64 per cent, to 4,380.49 and the Nasdaq Composite added 53.10 points, or 0.37 per cent, to 14,599.78. — Reuters pic

NEW YORK, Sept 30 ― Investors sought to stanch the bleeding yesterday after world stock markets suffered their worst rout since January and US and European borrowing costs raced to their highest in months.

Stock indices in the United States and Europe staged a partial recovery after a heavy sell-off in tech stocks on Tuesday had consigned Wall Street to its steepest drop since mid-July.

The Dow Jones Industrial Average rose 240.91 points, or 0.7 per cent, to 34,540.9, the S&P 500 gained 27.86 points, or 0.64 per cent, to 4,380.49 and the Nasdaq Composite added 53.10 points, or 0.37 per cent, to 14,599.78.

The pan-European STOXX 600 index rose 0.6 per cent, with investors looking past a 2.2 per cent fall in the previous session.

MSCI's gauge of stocks across the globe gained 0.08 per cent.

Declines in tech stocks earlier in the week created opportunities for investors looking for value, analysts said.

“Bargain hunters have stepped into the fold today as they have swooped in to snap up relatively cheap stocks,” said David Madden, market analyst at Equiti Capital.

The global benchmarks for borrowing costs ― the yields on US and German government bonds ― also edged lower after their spikes had helped fuel the volatility.

“We have seen bond yields retrace today but the chatter about tapering is likely to resurface in the near term,” said Madden.

Benchmark 10-year notes last fell 3/32 in price to yield 1.5444 per cent, from 1.536 per cent late on Tuesday.

Those Treasury yields have jumped roughly 20 basis points over the last week and are set for their biggest monthly jump since March.

“The question that will come in the next 10 days is will the US Treasury yield keep pushing above 1.5 per cent,” said Societe Generale strategist Kenneth Broux.

German and British 10-year bond yields are set for the biggest monthly rise since February ― gilt yields have soared almost 40 basis points this month to 1 per cent.

Broux said the question for October and the rest of the year would be whether the inflation pressures that central banks train their focus on start to abate. “The 1.5 per cent level (on US Treasuries) is really pivotal,” he said.

The dollar rallied to a one-year high against rival currencies. The greenback is on course for its best year since 2015 just as doubts re-emerge about the global recovery from the Covid pandemic and Washington is bogged down in debt ceiling talks that could lead to a government shutdown. China is also grappling with a power crunch and property sector worries that have hit its economy.

The dollar index rose 0.661 per cent, with the euro down 0.67 per cent to US$1.1603 (RM4.85).

Gold fell to its lowest in seven weeks yesterday as the dollar advanced.

Spot gold dropped 0.5 per cent to US$1,725.26 an ounce. US gold futures settled 0.8 per cent lower at US$1,722.9.

Overnight Asia-Pacific shares had managed to restrict falls to 1.2 per cent. Not including Japan, the region was heading for a 9.4 per cent decline for the third quarter, its worst quarterly performance since the first three months of 2020, when global markets were roiled by the initial spread of Covid-19.

China's worsening power crunch pushed investors out of Chinese stocks vulnerable to factory shutdowns, including chemicals and steelmaking, even as the country's economic planning agency sought to reassure residents and businesses.

Debt saddled property giant China Evergrande's shares did leap 15 per cent though, after it said it planned to sell a 9.99 billion yuan stake in Shengjing Bank .

But investors are still waiting to see whether the developer makes some now-overdue bond payments and rating firm S&P Global said another major property firm, Fantasia, was also at growing risk of default.

In commodity markets, oil prices dropped, having broken through US$80 a barrel for the first time in nearly three years the day before.

US crude oil futures settled at US$74.83 per barrel, down 0.6 per cent. Brent crude futures settled at US$78.64 per barrel, also down 0.6 per cent. ― Reuters

Evergrande set to miss second offshore bond coupon payment this month, say sources

A man walks past the China Evergrande Centre building in Hong Kong September 23, 2021. — AFP pic

HONG KONG, Sept 30 ― At least some of China Evergrande's offshore bondholders had not received a due coupon payment by the close of Asia business yesterday, sources said, although the cash-strapped developer reached a US$1.5 billion (RM6.27 billion) deal to settle debt with a Chinese bank.

With liabilities of US$305 billion, Evergrande has sparked concerns its woes could spread through China's financial system and reverberate around the world ― a worry that has eased with the Chinese central bank vowing to protect homebuyer interest.

The company, which has nearly US$20 billion in offshore debt, was due yesterday to make a US$47.5 million bond interest payment on its 9.5 per cent March 2024 dollar bond. It also missed paying a US$83.5 million in coupon on another bond last Thursday.

Two people familiar with the matter, who declined to be named due to the sensitivity of the matter, said at least some of the holders of the 2024 bonds had received no information from Evergrande about the payment yesterday.

It was not immediately clear if the payment could still be made during US business hours.

A spokesperson for Evergrande did not have any immediate comment. Reuters was unable to determine whether Evergrande had told any of the bondholders what it plans to do about Wednesday's coupon payment.

Evergrande's silence on its offshore payment obligations since the missed payment last week has left global investors wondering if they will have to swallow large losses when 30-day grace periods end for coupons due on September 23 and September 29.

The company, once China's top-selling developer and now expected to be one of the largest-ever restructurings in the country, has been prioritising domestic creditors over offshore bondholders.

For Evergrande, “the most likely outcome is debt restructuring with some help from the government,” said Wai Hoong Leong, portfolio manager for the KraneShares Asia Pacific High Yield Bond ETF, in a presentation to investors yesterday. “We expect the government and Evergrande to focus on protecting the customers and suppliers, while ensuring an orderly restructuring for creditors who are likely to take a larger impact.”

It missed the payment deadline on a dollar bond last Thursday, a day after its main property business in China said it had privately negotiated with onshore bondholders to settle a separate coupon payment on a yuan-denominated bond.

In the latest such move, Evergrande said in an exchange filing earlier on Wednesday that it would sell a 9.99 billion yuan ($1.5 billion) stake it owns in Shengjing Bank Co Ltd to a state-owned asset management company.

The bank, one of Evergrande's main lenders, demanded all net proceeds from the sale go towards settling the developer's debts with Shengjing. As of the first half last year, the bank had 7 billion yuan in loans to Evergrande, according to a report by brokerage CCB International, citing news reports.

The move highlights the role state-owned enterprises may play in Evergrande's denouement.

“We are in the wait-and-see phase at the moment. The creditors are organising themselves and people are trying to figure out how this falling knife might be caught,” said an adviser hired by one of the offshore Evergrande bondholders.

“The clock has started to tick on a restructuring process. The company is going to need to do something, it's obviously struggling with liquidity ... the liquidity issue is what brings the house of cards down.”

Government prodding

Once the face of China's frenzied building boom, Evergrande has now become the poster child for a crackdown on developers' debts that has spurred volatility in global markets and left large and small investors sweating their exposure.

Evergrande's troubles slammed global stock markets earlier this month, although some global investors have since shifted their focus to political wrangling in Washington over the US debt ceiling and a rise in Treasury yields that has pressured stocks.

Nonetheless, any negative surprise from Evergrande could give stock market bears more ammunition.

Rating agency Fitch yesterday downgraded the long-term foreign-currency issuer default ratings (IDRs) of Evergrande and its subsidiaries, Hengda and Tianji, citing likely nonpayment of offshore bond interest last week.

Bloomberg reported yesterday that Marathon Asset Management is buying debt issued by Evergrande Group, citing the investment firm’s co-founder and chief executive officer, Bruce Richards.

Beijing is prodding government-owned firms and state-backed property developers such as China Vanke Co Ltd to purchase some of Evergrande's assets, people with knowledge of the matter told Reuters.

Authorities are hoping that asset purchases will ward off or at least mitigate any social unrest that could occur if Evergrande were to suffer a messy collapse, they said, declining to be identified due to the sensitivity of the matter.

On Monday, China's central bank vowed to protect consumers exposed to the housing market, without mentioning Evergrande in a statement posted to its website, and injected more cash into the banking system.

Those moves have boosted investor sentiment towards Chinese property stocks in the last couple of days, with Evergrande stock rising as much as 17 per cent yesterday before closing 15 per cent higher. ― Reuters

Report: UK diverts scarce fuel to petrol stations, not large firms

A sign informs customers that petrol pumps are out of use at a Texaco fuel station in Luton, Britain September 29, 2021. ― Reuters pic

LONDON, Sept 30 ― Fuel is being diverted from large firms in the UK to pumping stations, a move that could eventually disrupt online deliveries, The Telegraph reported yesterday.

UK government officials have instructed executives running Britain's network of fuel terminals to send tankers heading for large companies to garages and service stations instead, the newspaper said, citing industry sources. The newspaper also reported that the government said it did not order any fuel deliveries to be diverted.

Britain has been gripped by a rush of panic buying that has left petrol stations dry across major cities. Oil companies have warned that they do not have enough tanker drivers to move petrol and diesel from refineries to filling stations.

The government ordered soldiers to start driving fuel tankers to replenish empty pumps, as motorists remained stuck in queues after nearly a week of shortages.

The UK government did not respond to Reuters' request for comment, but a spokesman told the newspaper it was “simply untrue” to suggest that officials had ordered fuel companies to divert their deliveries.

“There has always been and continues to be plenty of fuel at refineries and terminals and we are now seeing signs that the situation at the pumps has begun to improve with more stations getting more fuel,” the spokesman was quoted as saying by the newspaper. ― Reuters

UK car output falls 27pc in August amid chip shortage

According to a trade industry body, British car production dropped by 27 per cent year-on-year in August as a lack of semiconductor chips continues to hurt the sector worldwide. — Reuters pic

LONDON, Sept 30 ― British car production dropped by 27 per cent year-on-year in August as a lack of semiconductor chips continues to hurt the sector worldwide, a trade industry body said today.

The timing and duration of summer shutdowns at certain plants also pushed down output, which stood at 37,246 cars, according to the Society of Motor Manufacturers and Traders (SMMT).

There were big drops in the number of vehicles exported to Australia, the United States and China, whilst sales to the EU were only down 4.9 per cent, and vehicles destined for domestic buyers rose 3.3 per cent, figures showed.

“Carmakers and their suppliers are battling to keep production lines rolling with constraints expected to continue well into 2022 and possibly beyond,” said SMMT Chief Executive Mike Hawes. ― Reuters

Top 5 Activities People Dream of Doing in Retirement

Happy retired couple traveling — sirtravelalot / Shutterstock.com

Ask five people what they think retirement means, and you might get five completely different answers. However, the 2021 Transamerica Retirement Survey of Workers indicates that certain hopes are universal. The top three retirement dreams are common to baby boomers, Gen Xers and millennials alike. To all three groups, concepts like “freedom,” “enjoyment” and “stress-free” are retirement ideals.

from Money Talks News https://ift.tt/3ikgy4H

A word from our sponsor:

Need Help With Your Personal Finance or need a coach to help you structure or just want to learn the financial skill to self manage your financial matters and retirement. iLearnFromCloud.com

Need to solve a problem quickly, now you can solve it by learning the art of problem solving Art Of Problem Solving

Feeling hungry. Latest food news from Best Restaurant To Eat Malaysian Food and Travel Blog

Memory loss. Need to organize better. Solve problem fast with Free Mind Mapping Software Mind Mapping 101

Need A Customized System Development for your business or Going Paperless XPERT TECHNOLOGIES - Empowering The Paperless Economy

9 Ways to Lower Your Internet Bill

Woman working from home — Kate Kultsevych / Shutterstock.com

Whether you use the internet for business or pleasure, there’s a chance you’re paying too much for it. The cost of internet service is only going up — even with lower-tier plans. If you can’t live without the internet, here are some of the best ways to cut your costs. It's not the usual blah, blah, blah. Click here to sign up for our free newsletter. Companies like BillCutterz and Trim will...

from Money Talks News https://ift.tt/3ilh2b0

A word from our sponsor:

Need Help With Your Personal Finance or need a coach to help you structure or just want to learn the financial skill to self manage your financial matters and retirement. iLearnFromCloud.com

Need to solve a problem quickly, now you can solve it by learning the art of problem solving Art Of Problem Solving

Feeling hungry. Latest food news from Best Restaurant To Eat Malaysian Food and Travel Blog

Memory loss. Need to organize better. Solve problem fast with Free Mind Mapping Software Mind Mapping 101

Need A Customized System Development for your business or Going Paperless XPERT TECHNOLOGIES - Empowering The Paperless Economy

16 Home Maintenance Tasks That Save You Money

Homeowners fantasize about making fabulous changes to their homes: adding rooms, beautifying the grounds and remodeling kitchens and baths. In reality, these dream projects may not be financially possible. Don’t let that stop you, however, from taking good care of the home you have. By keeping up with small repairs, you’ll save money, heading off the big expensive fixes while maintaining your home’...

from Money Talks News https://ift.tt/2EG74je

A word from our sponsor:

Need Help With Your Personal Finance or need a coach to help you structure or just want to learn the financial skill to self manage your financial matters and retirement. iLearnFromCloud.com

Need to solve a problem quickly, now you can solve it by learning the art of problem solving Art Of Problem Solving

Feeling hungry. Latest food news from Best Restaurant To Eat Malaysian Food and Travel Blog

Memory loss. Need to organize better. Solve problem fast with Free Mind Mapping Software Mind Mapping 101

Need A Customized System Development for your business or Going Paperless XPERT TECHNOLOGIES - Empowering The Paperless Economy

British army to start driving tankers, fuel queues persist

LONDON, Sept 29 — Britain ordered soldiers today to start driving fuel tankers to replenish empty pumps, as motorists remained mired in queues after nearly a week of shortages, despite Prime Minister Boris Johnson saying the situation was improving.

Britain has been gripped by a rush of panic buying that has left pumps dry across major cities, after oil companies warned they did not have enough tanker drivers to move petrol and diesel from refineries to filling stations.

Opponents blame the crisis on government incompetence and its unyielding approach to Brexit, which has blocked hauliers from hiring drivers from the EU since Britain abandoned the common market this year. London says the disruption is partly an unforeseen result of the Covid-19 pandemic.

Business minister Kwasi Kwarteng said 150 soldiers would be driving tankers within a few days, and civilians would start shipments later on Wednesday using a government reserve fleet of around 80 vehicles.

“The last few days have been difficult, we’ve seen large queues. But I think the situation is stabilising, we’re getting petrol into the forecourts. I think we’re going to see our way through this,” Kwarteng said.

Johnson has sought to quell concerns, saying supplies were returning to normal while also urging people not to panic buy.

A shortage of around 100,000 drivers has sown chaos through supply chains and raised the spectre of empty shelves and price increases at Christmas.

No guarantee

Asked if he could guarantee that there would not be problems in the run-up to the busy retail period, Kwarteng said: “I’m not guaranteeing anything. All I’m saying is that, I think the situation is stabilising.”

By the early morning rush hour there were already long queues of cars in and around London and on the busy M25 orbital motorway circling the capital. Signs were up at some sites announcing no fuel was available.

The gridlock has sparked calls for doctors, nurses and other essential workers to be given priority access to fuel, a move Johnson has resisted.

Industry groups said the worst of the shortages seemed to be in London, the southeast and other English cities. Fights have broken out as drivers jostled.

The Petrol Retailers Association (PRA), which represents independent retailers who account for about two-thirds of all the 8,380 UK filling stations, said 27 per cent its members’ stations were out of fuel down from as high as 90 per cent two days ago.

More forecourts were reporting receiving deliveries and the situation was likely to improve further in the next 24 hours, but staff were experiencing “a high level of both verbal and physical abuse which is completely unacceptable,” said Gordon Balmer, PRA Executive Director.

The shortages have left gaps on supermarket shelves and added to an air of chaos in the world’s fifth-largest economy. A spike in European wholesale natural gas prices has also tipped energy companies into bankruptcy.

To tackle the shortage, the government has said it will issue temporary visas to 5,000 foreign drivers, a measure it had previously ruled out after Johnson campaigned for tougher border restrictions as part of his hard line on Brexit.

“What we want to do is make sure that we have all the preparations necessary to get through until Christmas and beyond, not just in supplying the petrol stations but all parts of our supply chain,” Johnson said.

Hauliers, petrol stations and retailers say there are no quick fixes as the shortfall of drivers is so acute, and transporting fuel demands training and licensing. European drivers may also be reluctant to take up the visa offer, which only lasts until December 24. — Reuters

Opec+ seen sticking to November output plans, despite US$80 oil, sources say

The logo of the Organisation of the Petroleum Exporting Countries (Opec) is seen outside their headquarters in Vienna December 7, 2018. — Reuters pic

LONDON, Sept 29 — Opec+ is likely to stick to an existing deal to add 400,000 barrels per day (bpd) to its output for November when it meets next week, sources said, despite oil hitting a three-year high above US$80 (RM334) a barrel and pressure from consumers for more supply.

The Organization of the Petroleum Exporting Countries and allies led by Russia, known as Opec+, agreed in July to increase production by 400,000 bpd each month to phase out 5.8 million bpd in cuts. It also agreed to assess the deal in December.

“So far we will keep the plan to increase by 400,000 bpd,” one of the sources said.

Opec+, which has held regular meetings, agreed in September to continue with its existing plans for an October output rise.

The Opec+ Joint Technical Committee (JTC), which met on Wednesday, sees the oil market in a 1.4 million bpd surplus next year under its base scenario, slightly below the previous forecast of 1.6 million bpd, a presentation seen by Reuters showed.

In opening remarks to the JTC, Opec Secretary General Mohammad Barkindo said the current Opec+ deal is helping to keep the oil market balanced.

“From where we stand today, the Opec and non-Opec ministerial decisions to begin returning 400,000 bpd to the market each month continue to help balance the need for incremental increases to address demand, while guarding against the potential for supply overhangs,” he said, according to Opec’s Twitter account.

The JTC sees the oil market in a 1.1 million bpd deficit this year, assuming demand growth of about 6 million bpd. It assumes demand growth of 4.2 million bpd next year.

The sources said Opec+ ministers, who meet online on Monday, would consider the JTC’s findings before making a final decision.

Brent oil rose to a three-year high above US$80 a barrel on Tuesday, boosted by unplanned outages in the United States and a strong demand recovery after the pandemic hammering. Prices were trading just below US$80 on Wednesday.

The White House, which in August raised concerns about high prices, said on Tuesday it was in communication with Opec and looking at how to address the cost of oil.

India, the world’s third-biggest oil importer and consumer, signalled on Tuesday that a spike in crude prices would speed up the transition to alternative energy sources.

Energy ministers from Opec members Iraq, Nigeria and the United Arab Emirates said in recent weeks the group saw no need to take extraordinary measures to change the existing agreement.

The JTC’s agenda includes compliance with existing cuts, which stood at 116 per cent in August, meaning the group is cutting more than planned, with several members facing domestic constraints on increasing output. This points to a tighter oil market.

Opec members Nigeria and Angola, major African oil exporters, will struggle to boost production to their Opec+ quota levels until at least next year because of underinvestment and maintenance issues, sources said.

This means any major output increase by the group would have to rely on producers with spare capacity, such as Saudi Arabia and the United Arab Emirates.

Barclays said the demand recovery would outpace Opec+ moves to taper its curbs “due partly to limited capacity of some producers in the group to ramp up output, which is likely to drive the inventory cushion to the lowest level in decades”. — Reuters

Wall Street rises, boosted by tech stocks, Boeing

Wall Street sign at the New York Stock Exchange (NYSE) December 9, 2020 in New York City. — AFP pic

NEW YORK, Sept 29 — Gains in beaten-down technology shares and Boeing led US stock indexes higher today, after concerns about inflation and rising Treasury yields sparked one of Wall Street’s worst selloffs this year.

Ten of the 11 major S&P sectors rose in early trading, with technology and communication services among the top gainers.

Energy shares were the worst performers, as a rally in crude prices petered out. Still, the sector has gained 3 per cent so far this week and is on track for its best monthly performance since February.

Shares of heavyweights Amazon.com Inc, Facebook Inc, Microsoft Corp, Apple and Google-parent Alphabet Inc rose slightly in early trade, but were nursing steep losses from the prior session.

A 4.4 per cent jump in shares of Boeing Co also lifted the blue-chip Dow and the benchmark S&P 500.

Boeing said its 737 MAX test flight for China’s aviation regulator last month was successful and the planemaker hopes a two-year grounding will be lifted this year.

Rate-sensitive tech stocks got a boost as 10-year US Treasury yields fell after jumping 20 basis points on signals from the Federal Reserve that it could tighten its monetary policy in the months ahead.

“It’s all coming down to the 10-year yield, the rate of change. The reason you’re seeing a little relief (today) is because it’s not going straight up, it’s taking a bit of a breather and the market likes that,” said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

“The only game in town right now is going to be equities until those yields go up more materially and people can earn something in fixed income. There’s nothing to compete with equities and that’s why you’re seeing every 3 per cent to 5 per cent dip bought.”

Analysts at Vanda Research said retail investors bought US$1.9 billion (RM7.9 billion) in US equities in Tuesday’s broad market selloff, of which almost 50 per cent of single stock purchases have been concentrated in technology stocks.

The S&P 500 index is now set to break its seven-month winning streak as fears about China Evergrande’s default, potential higher corporate taxes and a sooner-than expected tapering of monetary support by the Fed clouded investor sentiment in what is usually a seasonally weak month.

At 9.53am ET, the Dow Jones Industrial Average was up 156.80 points, or 0.46 per cent, at 34,456.79, the S&P 500 was up 25.21 points, or 0.58 per cent, at 4,377.84 and the Nasdaq Composite was up 114.56 points, or 0.79 per cent, at 14,661.24.

Meanwhile, US Senate Republicans blocked a bid by President Joe Biden’s Democrats to head off a potentially crippling US credit default for a second day in a row, as partisan tensions rattled an economy recovering from the Covid-19 pandemic.

JPMorgan Chase & Co Chief Executive Jamie Dimon also cautioned a US default would be a “potentially catastrophic” event.

Dollar Tree Inc jumped 10 per cent after the discount retailer boosted its share buyback plan to a total of US$2.5 billion.

Advancing issues outnumbered decliners by a 1.86-to-1 ratio on the NYSE and by a 1.34-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and no new low, while the Nasdaq recorded nine new highs and 46 new lows. — Reuters

AtOneGoFinancial Blog