Economy

US: Initial jobless claims are higher than estimates at 411,000 . Applications for US state unemployment insurance fell slightly last week, though were higher than forecast, as the labor market meanders toward a full recovery. Initial claims in regular state programs decreased by 7,000 to 411,000 in the week ended June 19, Labor Department data showed. The median estimate in a survey of economists called for 380,000 new applications. (Bloomberg)

US: Economic growth unrevised at 6.4% in 1Q . The Commerce Department released a report showing the pace of US economic growth in the 1Q of 2021 was unrevised from the previous estimate. The report said real gross domestic product spiked by 6.4% in the 1Q, matching the estimate provided last month as well as economist estimates. The unrevised growth came as upward revisions to non residential fixed investment, private inventory investment, and exports were offset by an upward revision to imports. (RTT)

US: Durable goods orders jump 2.3% in May . New orders for US manufactured durable goods rebounded in the month of May, according to a report released by the Commerce Department. The report said durable goods orders surged up by 2.3% in May after falling by a revised 0.8% in April. Economists had expected durable goods orders to spike by 2.7% compared to the 1.3% slump that had been reported for the previous month. (RTT)

EU: German business confidence improves more than expected . German business confidence improved more-than-expected in June, reports said citing survey results from ifo Institute. The business climate index rose to 101.8 in June from 99.2 in the previous month. The score was expected to rise moderately to 100.6. According to ifo, both current assessment as well as expectations improved in June. The current conditions index came in at 99.6 in June. (RTT)

UK: BoE sees inflation exceeding 3% temporarily . The BoE expects inflation to exceed 3% temporarily, and to fall back once the impact of rising commodity prices prove transitory. At the Monetary Policy Committee meeting, policymakers repeated their forward guidance and kept the policy unchanged, as widely expected. The MPC said it did not intend to tighten monetary policy at least until there was clear evidence. (RTT)

South Korea: Consumer sentiment improves in June – BoK . Consumer sentiment in South Korea strengthened in June, the Bank of Korea said with a composite consumer sentiment index score of 110.3 - up from 105.2 in May. Consumer sentiment regarding current living standards was unchanged, at 93, while the outlook was two points higher at 95. Consumer sentiment related to future household income was two points higher at 100. (RTT)

Thailand: May export growth at 11-year high on strong global demand . Thailand's exports jumped a bigger than expected 41.59% in May from a year earlier, the fastest pace in nearly 11 years, as global demand improved, the country's commerce minister said. That compares with a forecast for a jump of 30% in May in a Reuters poll and a rise of 13.09% in April. The export gains were led by a 170% YoY surge in cars and car parts shipments. (Reuters)

Markets

Astro (Outperform, TP:RM1.43): Signs Netflix as new streaming partner. Astro and Netflix have entered into a partnership that will see the streaming service brought on to Astro's platform. The content providers announced in a joint statement that Astro customers will soon be able to access Netflix on their connected Ultra Boxes, first at launch, and subsequently on Ulti Boxes. (StarBiz)

Comments: With this partnership, Astro and Netflix customers will be able to enjoy the convenience of easy access for payment in a single bill as well as the extensive contents offered by both players. However, the new streaming service is only available on Astro’s Ultra Boxes, first at launch, and on Ulti Boxes in the coming months. Given that the number of installed Ultra/Ulti Boxes remains low (about 300k of over 1m boxes in total), we do not expect any significant revenue contribution arising from this partnership in the near term. We believe its tie-ups with global streaming services will help to tackle the challenge of rising churn rates that Astro is facing.

OMH: To increase funding in Bryah Basin manganese JV. OM Holdings Ltd subsidiary OM (Manganese) Ltd (OMM) is extending a further USD500,000 in funding for exploration in the Bryah Basin manganese joint venture. OMM, which recently increased its JV interest from 30% to 40% under Tranche 3, has elected to increase its JV interest to 51% under Tranche 4 via additional funding. (StarBiz)

Dagang NeXchange: Dnex inks MOU with uitm to develop digital solutions. Dagang NeXchange (DNeX) has signed a memorandum of understanding with Universiti Teknologi MARA (UiTM) to collaborate on the development of digital solutions in data analytics, artificial intelligence (AI) and cybersecurity. Both parties will also explore the application of these technologies in key industries in Malaysia and create opportunities for further collaboration in such commercialisation efforts.(StarBiz)

TDM: Records EBITDA of RM22.6m for 1Q of financial year 2021. TDM, a member of Terengganu Incorporated Group, recorded earnings before interest, tax, depreciation and amortisation (EBITDA) of RM22.6m in the 1Q ended March 31, 2021, compared with RM21.6m for the same period last year. (Bernama)

United Malacca: Posts 4Q net loss on lower earnings from Indonesian ops, declares seven sen dividend. United Malacca posted a net loss of RM11.53m or 5.5sen earnings per loss in the 4QFY21, versus a net profit of RM13.73m or EPS of 6.54sen in the immediate preceding quarter. This group attributed the loss to its Indonesian operations in Kalimantan, which recorded a plantation loss of RM800,000. (The Edge)

IPO: Yenher eyes RM61m from IPO, plans overseas expansion. Yenher Holdings, en route to a listing on the Main Market of Bursa Malaysia Securities, plans to raise RM61.21m from its initial public offering (IPO) of 106.19m shares at an offer price of 95sen per share. The group, which is principally involved in the manufacturing and distribution of animal health and nutrition products, has earmarked RM31m of the gross proceeds for the construction of a good manufacturing practice-compliant plant. (SunBiz)

Market Update

The FBM KLCI might add a few points at opening today as stocks on Wall Street hit highs on Thursday, after the Biden administration secured an infrastructure deal worth about USD1tn. The tech heavy Nasdaq Composite rose 0.7%, notching another record close. It was the third consecutive day of gains for the index. London’s FTSE 100 index, which is stacked with exporters that benefit from a weaker pound, closed up 0.5%. In Europe, the Stoxx Europe 600 share index rose 0.9% after the Ifo Institute’s business climate index climbed to a higher than expected reading of 101.8 in June, from 99.2 last month, highlighting optimism among company bosses in Germany, the eurozone’s economic powerhouse. Frankfurt’s Xetra Dax ended the session up 0.9%.

Back home, the FBM KLCI fell 0.58% as domestic political infighting, a slow vaccination rate and high daily Covid-19 cases continued to drag market sentiment. The benchmark index ended 9.05 points lower at 1,555.71 after rising to an intraday high of 1,567.59. The regional stocks were mixed, with South Korean shares closing at an all-time high, led by chip heavyweights that tracked a record finish on the Nasdaq. The benchmark KOSPI closed up 0.3% at 3,286.1. In contrast, Japanese shares were flat at 28,875.23 as uncertainty over domestic corporate earnings kept investors on the sidelines, while Hong Kong stocks closed 0.23% higher at 28,882.46, boosted by energy and IT firms.

Source: PublicInvest Research - 25 Jun 2021