Capital markets news summary for Fri 10 Mar 2023
Capital markets news summary for Fri 10 Mar 2023
BNM keeps OPR at 2.75%
As inflation is expected to moderate in 2023 and any price pressures are contained with price controls and subsidies, Bank Negara Malaysia (BNM) decided to keep the overnight policy rate (OPR) unchanged. In 2022, BNM raised the OPR by 1% primarily in response to the US Federal Reserve’s rate hikes. An upswing in global commodity prices and changes to subsidy policy and price controls could push inflation up. BNM is balancing effort to contain price increases against its effect on economic growth. There are downside risks to the global economy caused by weaker demand and tighter monetary policies. Malaysia’s growth will be slower due to the global slowdown, supported by stronger household spending as employment and income improve, tourism and infrastructure projects.
Agmo signs MOU on healthcare solutions for pilgrims
It signed the memorandum of understanding (MOU) with Saudi Arabia-based Mabroor Fintech Holdings Co Ltd and Heydoc Sdn Bhd (Doc2us). The tie up will enable the parties to explore the feasibility of providing an end-to-end one-stop integrated hybrid healthcare solution to pilgrims performing their hajj and umrah in Saudi Arabia. Mabroor is an investment holding company for a group of companies primarily involved in financial technology and e-commerce. Doc2us is a telehealth solution provider based in Malaysia, and is principally involved in the provision of virtual healthcare services, remote monitoring, electronic prescriptions and other related healthcare services. Agmo was listed in Aug 2022 at 26 sen. The counter closed at 73 sen, up 1.5 sen.
EATech selling vessel for RM23.52m
EA Technique has entered into a memorandum of agreement for the disposal of Nautica Muar to United Arab Emirates-based Alpha Metallum DMCC for USD5.2m (RM23.52m) cash. The sale will be completed in 2Q2023. The company planned to sell Nautica Muar since Aug 2022. The selling price is higher than the estimate on 5 Aug of USD4.86m (RM21.99m). The agent’s commission and other expenses come up to RM0.21m, so the company stands to gain RM3.42m from the disposal. The company sold Nautica Kota Tinggi to Petroleum Gulf Energy Trading LLC for USD4.65m (RM20.69m) cash in Jun 2022. It is also looking to sell Nautica Maharani. On 21 Feb 2023, EATech said that a new shareholder – speculated to be Eco World’s co-founder Tan Sri Rashid Manaf – may emerge with a controlling stake. The counter closed unchanged at 31.5 sen.
Mark Mobius bets on chip stocks
The investor – formerly of Franklin Templeton – cites increased US and Chinese investments in research and production in the sector. After rising interest rates in 2022 pummelled semiconductor stocks, they are now making a comeback. Investors are looking at the long-term growth prospects and cheaper valuations. The Philadelphia Semiconductor Index has increased 20% this year compared to 4% for the S&P 500. The competition between the US and China is leading to a build-up of chip production capacity. Chips are also becoming more sophisticated and demand will expand with the adoption of connected devices and artificial intelligence. Mark Mobius says that the outlook remained good for China and Indonesia, and is bullish on India as it diverts manufacturing away from China.
US job cuts in Jan-Feb highest since 2009
The figure hit 180,000 layoffs with the tech sector contributing one-third. In Feb alone, 77,770 people lost their jobs, 5 times the number announced a year ago. Apart from tech, retail and finance are also experiencing job cuts. Many companies including Microsoft, Alphabet and Paypal have fired workers to cut spending and protect margins amid economic uncertainties. Investors welcome the right-sizing efforts, rewarding companies for rationalising growth. Shares of Alphabet, Microsoft, Amazon and Meta have risen 6%-54% this year after falling 29%-64% in 2022. Companies announced plans to hire 28,830 workers in Feb, down 87% from 215,127 the prior year.
