AtOneGoFinancial Blog

01 September 2021

Asean manufacturing PMI falls for third straight month in August 2021

KUALA LUMPUR, Sept 1 ― The Asean manufacturing sector remained in a downturn for the third straight month in August 2021, with the headline Purchasing Managers' Index (PMI) easing to 44.5 from 44.6 in July 2021, as rising Covid-19 cases and lockdown measures continued to impact the sector.

In a statement today, IHS Markit said operating conditions declined sharply again amid further rapid falls in factory production and new orders, while sentiment among goods producers towards output over the year ahead slipped to a 13-month low.

IHS Markit economist Lewis Cooper said for the first time since May 2020, contractions were recorded across each of the seven constituent nations last month, highlighting the severe impact of rising Covid-19 cases and stronger lockdown measures across the region.

“The fastest rates of decline were recorded in Myanmar (PMI at 36.5), Vietnam (PMI at 40.2) and Malaysia (PMI at 43.4),” he said.

Cooper noted that the Covid-19 outbreaks and stricter lockdown measures continued to adversely impact the Asean manufacturing sector in August 2021, which remained firmly mired in a downturn.

He said client demand continued to retreat, while factory production declined rapidly again, subsequently, companies cut back on staffing, despite a record upturn in backlogs, while business confidence moderated to a 13-month low.

“Overall, the latest data provided little good news. Companies were still confident overall of higher output in 12 months’ time, however, with firms hopeful that once restrictions are eased the sector will once again rebound,” he added. ― Bernama

Source: Malay Mail

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Google extends remote work option due to pandemic

SAN FRANCISCO, Sept 1 ― Google yesterday extended the option for its employees to work from home into next year due to the pandemic.

Returning to Google campuses will remain voluntary globally through January 10, with local offices given the discretion to decide when to require employees to return to their desks, according chief executive Sundar Pichai.

“I’m happy to say that a large number of offices globally are already open for business, and we are welcoming back tens of thousands of Googlers on a voluntary basis,” Pichai said.

“The road ahead may be a little longer and bumpier than we hoped, yet I remain optimistic that we will get through it together.”

He promised Google workers 30 days' notice before they would have to return to their offices, and announced they would be able to take off an extra day in October and December as “reset days” to “rest and recharge.”

Google, Facebook and other tech giants have delayed plans for workers to return to the campuses that were abandoned early in the pandemic in an effort to limit the spread of Covid-19.

Tech firms have also instituted vaccine and mask requirements to make offices safer as the Delta variant surges in the US and other countries. ― AFP

Source: Malay Mail

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Asian shares down on slow-growth fear; dollar stays near three-week low

HONG KONG, Sept 1 ― Asian shares gave up some of their recent gains in cautious trading today while the dollar inched back from three-week lows, as worries about slowing global growth in several markets returned to weigh on traders' minds.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.40 per cent, edging off a three-week high reached the day before.

In the past two weeks, the regional benchmark has regained much of the ground lost a few weeks earlier when markets globally dropped, spooked by the possibility that the US Federal Reserve was moving closer to tapering its asset purchases.

However, yesterday, Chinese blue chips fell 0.44 per cent and Hong Kong 0.5 per cent, as worries about slowing growth in China remained a drag.

The day before, China reported that factory activity expanded at a slower pace while the services sector slumped into contraction, showing that China's current soft patch is continuing in the third quarter,” Mansoor Mohi-uddin, chief economist, Bank of Singapore, wrote in a note.

Mohi-uddin added that “authorities may become more open to providing further monetary and fiscal stimulus to keep the economy from experiencing a broader slowdown for the rest of the year.”

Australian shares fell 0.58 per cent, paring earlier losses slightly, after figures showed gross domestic product (GDP) grew 0.7 per cent in the June quarter.

ANZ analysts said ahead of the release that the figures would be “largely old news. The more pressing question is how large the September quarter GDP contraction will be”.

Japan's Nikkei however gained 0.89 per cent, boosted by data showing that Japanese companies' capital spending rose in the second quarter, the first such increase since the pandemic began.

Fears about slowing growth are not unique to China. Overnight, Wall Street finished marginally lower on Tuesday, after US consumer confidence fell to a six-month low in August as soaring Covid-19 infections and rising inflation dampened the economic outlook.

However, the slightly subdued ending to August failed to detract from a strong monthly performance by the US' three main indexes, helped by a dovish tone from a speech from Fed Chair Jerome Powell last Friday.

As Powell also suggested an improvement in the labour market is one major remaining prerequisite for the Fed to taper its asset purchases, much attention is also focused on US payroll data due on Friday.

Yields on benchmark 10-year Treasury notes gained slightly in Asian hours at 1.3256 per cent compared with the US close of 1.302 per cent, but were still sitting roughly in the middle of the range in which they have traded for the past two months.

In currency markets, the dollar index, which measures the greenback against six rivals, rose marginally having fallen to a three-week low the day before.

Oil was steady, with US crude at US$68.49 (RM284.16) a barrel, and Brent crude at US$71.72 per barrel, neither changed much on the day, having finished August with their first monthly losses since March.

An Opec+ meeting, where major producers will decide whether to go ahead with their plan to add supply, is due to take place later today. ― Reuters

Source: Malay Mail

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Carsome raises US$200m in financing round, brings valuation to US$1.3b

KUALA LUMPUR, Sept 1 ― Carsome Group, an integrated car e-commerce platform, has announced the completion of its US$170 million (RM705 million) Series D2 round of funding, bringing the company’s valuation to US$1.3 billion, thus cementing its position as Malaysia’s largest tech unicorn.

In a statement today, Carsome said the funding round is complemented by new credit facilities of US$30 million, bringing the total funds raised to US$200 million.

The Series D2 round ― the largest equity investment in Carsome’s history ― saw participation from one of the largest sovereign wealth funds in the region, as well as a pool of new international investors such as Catcha Group, MediaTek and Penjana Kapital.

It also saw strong participation from existing shareholders including Asia Partners, Gobi Partners, 500 Southeast Asia, Ondine Capital, MUFG Innovation Partners, Daiwa PI Partners and others.

Rothschild & Co acted as the financial advisor to Carsome for the deal.

According to Carsome co-founder and group chief executive officer Eric Cheng, the latest funding round enables the company to accelerate its organic growth in the retail and auto-financing business.

“We are deeply honoured and encouraged by the confidence and support accorded by our investors.

“We are geared up to achieve even greater heights while rolling out Southeast Asia’s integrated car e-commerce platform, now further solidified by various strengths within the ecosystem,” added Cheng.

Carsome’s latest funding round will empower its strategic focus on the growth and expansion of its business-to-consumer (B2C) business.

This year alone, Carsome has opened at least seven B2C retail centers known as Carsome Experience Centres across Malaysia, Indonesia and Thailand, with several more in the pipeline for the rest of the year.

The company has also opened its first vehicle reconditioning centre in Malaysia to add to its array of retail services and boost consumer confidence in its Carsome Certified cars.

The funding injection also strengthens Carsome’s offering in auto-financing for car buyers and used car dealers.

In addition to its numerous financing products, Carsome had recently launched auto financing facilities for graduates who typically face challenges in obtaining loan approvals from conventional banks.

Apart from championing the growth of its B2C business, Carsome’s Series D2 funding is also expected to boost its capabilities in strategic investments and mergers and acquisitions.

This year, the company has acquired an all-equity stake in PT Universal Collection, a Jakarta-based car and motorcycle auction service.

It had also entered into a strategic partnership with leading listings and content automotive platform, iCar Asia, to build the largest automotive ecosystem in Southeast Asia, with more transactions expected over the next six months.

Carsome transacts more than 100,000 cars on an annualised basis, which translates to around US$1 billion in revenue. ― Bernama

Source: Malay Mail

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Australia's economy slowed in Q2 ahead of lockdown downturn

A boat navigates Darling Harbour past the Central Business District waterfront in Sydney, Australia. August 28, 2020. — Reuters pic

SYDNEY, Sept 1 ― Australia's economy was already slowing in the June quarter before wide-spread coronavirus lockdowns slammed everything into reverse, leaving the country in a desperate race to vaccinate in the hope of opening up to recovery by Christmas.

Figures from the Australian Bureau of Statistics out today showed gross domestic product (GDP) rose 0.7 per cent in the June quarter. That was a step down from 1.9 per cent in the March quarter, but topped forecasts of 0.5 per cent and avoided analysts' worst fears of a negative outcome.

Annual growth was the fastest in modern history at 9.6 per cent, but only because the pandemic caused a severe contraction in the June quarter last year, which was dropping from the calculation.

That painful pattern was playing out again as strict stay-at-home rules in Sydney, Melbourne and Canberra are set to see the economy shrink 2-3 per cent or more this quarter.

The conservative government of Prime Minster Scott Morrison is pinning its hopes on a vaccination roll out that is gathering steam after a ham-fisted start.

Current projections are the country could reach 70 per cent of adults vaccinated some time in October, which would allow for a relaxation of rules. Mass lockdowns could be abandoned altogether at 80 per cent, which is tipped for November.

“Assuming the vaccination rollout continues at its current pace it is likely the Eastern states will begin to re-open in the December quarter, and this will enable the economy to recover,” said Sarah Hunter, Chief Australia Economist for BIS Oxford Economics.

“But the shift to a new Covid-normal, where there are persistent cases within the community, will make some people cautious and the recovery this time around will be drawn out into 2022.”

The Reserve Bank of Australia (RBA) has been counting on a rapid recovery once the restrictions ease, though the spread of the Delta variant has made its latest forecasts for growth look optimistic.

The central bank is now under pressure to delay a tapering of its bond buying programme planned for this month, and is not expected to raise interest rates from record lows of 0.1 per cent until at least 2023.

The June quarter figures did show strength in consumer and government spending, housing and business investment, though much of that was offset by drags from net exports and inventories.

On the positive side, nominal GDP reached a record A$2.07 trillion (RM6.06 trillion) for the year, making it the world's 11th largest economy. Output stood at A$80,432 for every one of Australia's 25.6 million residents.

That outperformance owed much to super-high prices for many of the country's resource exports, which boosted its terms of trade by a massive 7.0 per cent in the quarter and 24 per cent for the year.

The flood of cash boosted company profits, tax receipts and employment, helping lift national incomes and so nominal GDP by a robust 3.2 per cent in the quarter.

There was some moderation in the household savings ratio to 9.7 per cent, but spending power has been underpinned by a boom in house prices which even seems impervious to the spread of Delta. ― Reuters

Source: Malay Mail

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Tokyo shares open higher as investors look to US jobs data

TOKYO, Sept 1 ― Tokyo shares opened higher today despite falls on Wall Street overnight, as investors shifted their focus to US employment data.

The benchmark Nikkei 225 index firmed 0.40 per cent, or 111.13 points, to 28,200.67 in early trade, while the broader Topix index rose 0.42 per cent, or 8.29 points, to 1,968.99.

The dollar stood at ¥110.06 (RM4.13), little changed from ¥110.00 in New York yesterday.

Tokyo shares have been enjoying an upswing in recent days, thanks in part to a decline in the daily coronavirus infection numbers in Japan, SMBC Nikko Securities said in a note.

International efforts to fight the Delta variant and general consensus over the benefits of booster vaccine shots are also encouraging buying, the brokerage said.

The recent momentum could mean the Nikkei index may target 28,500, Okasan Online Securities said.

“If the buy-back trend were to strengthen... (another) surge is possible,” Okasan said, adding it expects mixed trade in Tokyo for now.

“In the immediate term, investors are eager to see US employment data” due Friday.

“Its impact however remains unclear. Weak data are expected. That could mean uncertainty for the recovery of the US jobs sector and increase the likelihood the Federal Reserve maintain a cautious stance” on rate hikes, Okasan added.

Japanese media meanwhile was focused on speculation about when Prime Minister Yoshihide Suga will call an election as he struggles with record-low approval ratings.

“If the ruling coalition loses seats, it may weaken the government but will press them towards expansionist fiscal policies and could result in economic benefits” that lift the market, SMBC Nikko said.

Among major shares, Toyota rose 0.52 per cent to ¥9,642. Sony Group rose 0.48 per cent to ¥11,415.

Uniqlo operator Fast Retailing firmed 0.88 per cent to ¥73,160.

Mitsubishi UFJ Financial Group added 1.24 per cent to ¥601.8.

Nippon Steel dropped 0.73 per cent to ¥2,231.5.

Tokyo Electron, which makes tools to build semiconductors, fell 0.32 per cent to ¥47,090. ― AFP

Source: Malay Mail

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Sime Darby’s shares up on partnership announcement

KUALA LUMPUR, Sept 1 ― Sime Darby Bhd’s shares on Bursa Malaysia went up in the early trading session today as the company announced its partnership with Porsche AG to operate the German sports car manufacturer’s first assembly plant outside of Europe.

At 9.49am, the counter rose 1.0 sen to RM2.37 with 2.79 million shares changing hands.

In a statement on Monday, Sime Darby said the collaboration would allow the company to assemble sports cars for the Malaysian market, with production scheduled to begin in 2022.

Group chief executive officer Datuk Jeffri Salim Davidson said every Porsche car assembled by Sime Darby would go through the same rigorous standards and processes as its European counterparts.

“We will continue our close engagement with Porsche AG to ensure that we meet the Porsche standard every step of the way,” he said. ― Bernama

Source: Malay Mail

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Bursa Malaysia opens higher but retreated thereafter

KUALA LUMPUR, Sept 1 ― Bursa Malaysia opened higher but retreated thereafter as profit-taking emerged in selected heavyweights following the recent gains, dealers said.

The benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) opened 2.05 points better at 1,603.43 from Monday’s close of 1,601.38, but retreated to 1,600.49 after 15 minutes of trading.

Market breadth was negative with losers leading gainers 262 to 233, while 374 counters were unchanged, 1,349 untraded and six others suspended.

Turnover stood at 660.88 million units worth RM310.27 million.

Malacca Securities Sdn Bhd said with the key index notching its seventh-straight winning session, the upside may be capped as the market may digest the recent gains before more sectors start showing significant recovery, considering the recent overbought signals.

“Nevertheless, we believe the resumption of business activities should bode well for the economy as more states are moving into Phases Three and Four of the National Recovery Plan (NRP),” it said in a research note today.

It said that the FBM KLCI jumped to above the key 1,600-level on Monday amidst persistent buying interest from foreign funds in the heavyweights, in response to the positive cues from the regional markets and the Wall Street, as well as the decent progress in the vaccination rate in Malaysia.

“We expect the increasing vaccination rates should bode well for the recovery theme sectors, targeting sectors such as banking, consumer-related and building materials.

“Besides, gold counters may gain traction as the gold price continues its uptrend to move above US$1,800 (RM7,464) an ounce,” it said.

Among the market heavyweights, Maybank was flat at RM8.40, Public Bank declined 5.0 sen to RM4.13, Tenaga Nasional slipped 8.0 sen to RM10.38, IHH Healthcare fell 10 sen to RM6.30 while Petronas Chemicals rose 10 sen to RM8.40.

Of the actives, Borneo Oil and Vortex Consolidated earned half-a-sen each to 3.5 sen and 8.5 sen, respectively, Bintai Kinden added 2.5 sen to 50.5 sen, while P.A. Resources gained 3.5 sen to 44.5 sen.

On the index board, the FBM Emas Index shed 34.01 points to 11,593.86, the FBMT 100 Index was 37.65 points higher at 11,305.26, and the FBM Emas Shariah Index dipped 48.64 points to 12,701.82.

The FBM 70 decreased 9.49 points to 15,013.97 and the FBM ACE reduced 10.85 points to 7,234.05.

Sector-wise, the Plantation Index went down 28.12 points to 6,723.13, while the Financial Services Index gained 18.27 points to 15,575.54 and the Industrial Products and Services Index picked up 1.06 points to 199.44. ― Bernama

Source: Malay Mail

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Ringgit extends gains against US dollar in early trade

KUALA LUMPUR, Sept 1 ― The ringgit extended its gains against the US dollar to open higher today after the United States (US) economy started to show signs of short-term weakness, a dealer said.

At 9.04am, the local note rose to 4.1460/1490 versus the greenback from Monday's close of 4.1530/1575.

OANDA senior market analyst Edward Moya said the Covid-19 Delta variant’s impact on the US economy might be greater than anticipated, which does not bode well for third-quarter spending.

“The US consumer confidence showed a steep decline compared to Federal Reserve's expectations which added to the worry that consumer spending is at the peak.

“The Conference Board noted that spending intentions for homes, autos and major appliances all had cooled somewhat, but there is some optimism for the travel and hospitality industries as consumers continue to make vacation plans for some time over the next six months,” he said.

At the opening bell, the local note was also traded higher against a basket of major currencies.

It improved against the Singapore dollar to 3.0812/0836 from 3.0848/0886 at Monday's close and appreciated against the Japanese yen to 3.7626/7653 from 3.7813/7854 previously.

The ringgit rose against the British pound to 5.6949/6991 from 5.7116/7178 and strengthened vis-a-vis the euro to 4.8931/8966 from Monday’s close of 4.9001/9054.

The market was closed yesterday for the National Day celebration. ― Bernama

Source: Malay Mail

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AtOneGoFinancial Blog

01 September 2021

Asean manufacturing PMI falls for third straight month in August 2021

Google extends remote work option due to pandemic

Asian shares down on slow-growth fear; dollar stays near three-week low

Carsome raises US$200m in financing round, brings valuation to US$1.3b

Australia's economy slowed in Q2 ahead of lockdown downturn

Tokyo shares open higher as investors look to US jobs data

Sime Darby’s shares up on partnership announcement

Bursa Malaysia opens higher but retreated thereafter

Ringgit extends gains against US dollar in early trade

4 Rules to Master Good Debt vs Bad Debt Before You Get Trapped

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