The Week Ahead: US 3Q GDP, MyEG and Datasonic in the spotlight

This article first appeared in The Edge Malaysia Weekly, on October 22, 2018 - October 28, 2018.
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Developments on the 45 charges against Umno president Datuk Seri Dr Ahmad Zahid Hamidi, involving RM114 million, will be closely monitored this week. The former deputy prime minister pleaded not guilty to all charges in the Sessions Court last Friday. He was allowed bail.

On the stock market, all eyes will be on Datasonic Group Bhd and MyEG Services Bhd after both stocks hit limit-down last Friday following reports that they were implicated in some of the charges against Zahid that relate to bribery. Both companies have denied the allegations.

MyEG said it has a letter from the Malaysian Anti-Corruption Commission confirming that neither the company nor its directors are under probe in relation to the charges against Zahid. The counter plunged 24.7% to RM1.13 last Friday morning before trading was suspended in the afternoon pending its announcements. Trading will resume on Monday.

Datasonic closed 21 sen lower at 48.5 sen after hitting an intra-day low of 39.5 sen.

Elsewhere, the spotlight will be on the US’ third-quarter gross domestic pro-

duct data, to be released on Oct 26. Amid an intensified trade war with China, a Bloomberg survey of seven economists projects a moderation in growth to 3.3% year on year, compared with 4.2% y-o-y in the second quarter.

At home, Bank Negara Malaysia’s foreign reserves as at Oct 15 will be announced on Monday. It will be interesting to see if reserves continue to slide as they had slipped from US$104.4 billion as at Aug 30 to US$103 billion as at Sept 28.

On Wednesday, the Department of Statistics Malaysia will release September inflation figures, as measured by the Consumer Price Index. In August, the CPI rose a moderate 0.2% y-o-y, the slowest in 42 months.

In a data-light week in China, the focus will be on a report by the Swift payment system due Thursday, which will indicate the renminbi’s share of global payments in September. In August, its share inched up to 2.12% compared with 2.08% in July, holding firm as the fifth most-used currency in global payments.

On Thursday, China will also release September industrial profits data.

Japanese Prime Minister Shinzo Abe is scheduled to make a three-day visit to Beijing from Oct 25 — the first visit by a Japanese prime minister in seven years. He is expected to meet Chinese President Xi Jinping.

Thailand’s markets will be closed on Tuesday for Chulalongkorn Day.

In the US, a slew of data can be expected, from preliminary October data on the IHS Markit manufacturing Purchasing Managers’ Index (PMI) and services PMI (Oct 24), September new home sales

(Oct 24), September preliminary durable goods order (Oct 25) and third-quarter advance estimates on personal consumption (Oct 26).

On Oct 25, the US Federal Reserve will release its latest beige book on economic conditions across the 12 Fed districts, which will offer some insights into how the world’s largest economy is doing.

There will be a heavy stream of US earnings reports this week, with the focus expected to be on technology, automotive, oil and defence-technology companies.

South Korea is due to release a preliminary estimate of its third-quarter GDP on Thursday. A Bloomberg consensus forecast is for weaker growth of 2.3% y-o-y from 2.8% y-o-y in the second quarter.

Indonesia is sheduled to make a monetary policy decision on Tuesday. A Bloom-berg survey projects that Bank Indonesia will maintain its seven-day reverse repo rate at 5.75%. Since May, the central bank has already raised the interest rate four times, by a total of 125 basis points, to defend the plunging rupiah.

On Oct 25, the European Central Bank (ECB) is also set for a monetary policy decision. “While the ECB is widely expected to keep the policy unchanged in October, ECB president Mario Draghi may add more commentary on the Italian government budget and the importance of keeping to European Union budget rules,” UOB Global Economics & Markets Research comments in a client note last Friday. Italy is in a budget dispute with the EU Commission.

Singapore will release its September CPI data on Tuesday, and industrial production data on Friday.

Vietnam’s trade and inflation data for October is due to be released on Thursday.

At home, companies that will hold annual general meetings this week include Berjaya Corp Bhd (Oct 22), Glomac Bhd, Malaysian Pacific Industries Bhd (both on Oct 24), TAS Offshores Bhd, Hong Leong Industries Bhd, Pensonic Holdings Bhd (Oct 25) and IOI Corp Bhd (Oct 26).

Those with extraordinary general meetings include Hubline Bhd, Focus Lumber Bhd (Oct 23), TFP Solutions Bhd (Oct 24) and Malayan Flour Mills Bhd (Oct 26).

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