Economy

US: Consumer sentiment drops slightly less than initially estimated in July. Revised data released by the University of Michigan showed consumer sentiment in US decreased by slightly less than initially estimated in the month of July. The report said the consumer sentiment index for July was upwardly revised to 81.2 from a preliminary reading of 80.8 but remains below the June reading of 85.5. Economists had expected the index to be unrevised. "The largest monthly declines remained concentrated in the outlook for the national economy and complaints about high prices for homes, vehicles, and household durables," said Surveys of Consumers chief economist Richard Curtin. (RTT)

US: Consumer sentiment drops slightly less than initially estimated in July. Revised data released by the University of Michigan showed consumer sentiment in US decreased by slightly less than initially estimated in the month of July. The report said the consumer sentiment index for July was upwardly revised to 81.2 from a preliminary reading of 80.8 but remains below the June reading of 85.5. Economists had expected the index to be unrevised. "The largest monthly declines remained concentrated in the outlook for the national economy and complaints about high prices for homes, vehicles, and household durables," said Surveys of Consumers chief economist Richard Curtin. (RTT)

US: Personal income unexpectedly inches higher in June. Personal income in the US expectedly saw a slight increase in the month of June, according to a report released by the Commerce Department. The report showed personal income inched up by 0.1% in June after tumbling by a revised 2.2% in May. The uptick surprised economists, who had expected personal income to dip by 0.3% compared to the 2.0% slump originally reported for the previous month. The modest increase in personal income primarily reflected higher private wages and salaries, which were partly offset by decreases in economic impact payments and unemployment insurance. (RTT)

EU: Eurozone economy bounces back from pandemic driven downturn. The euro area economy recovered in the 2Q, after two straight quarters of contraction, driven by the lifting of lockdowns and the implementation of vaccination programmes, the preliminary flash estimate from Eurostat showed. Inflation exceeded the ECB’s target in July on higher energy prices, another report from the statistical office showed. The unemployment rate in the currency bloc dropped to the lowest since May 2020 as firms hired more staff amid economic recovery. (RTT)

China: Will maintain prudent, flexible monetary policy in 2H — central bank. China will maintain a prudent, flexible and targeted monetary policy in the second half of the year, its central bank said, as it seeks to support growth while keeping the digital economy in check. China's economy has staged a strong rebound from the impact of the Covid-19 pandemic, but recent data has suggested that gains are fading. The People's Bank of China (PBOC), in a statement on its website after a meeting on its priorities for the second half of the year, called for "rectifying" e-commerce and other tech companies and said it would "maintain a high level of pressure" on firms speculating in digital currencies. (Reuters)

China: Factory activity in July grows at slowest pace since Feb 2020. China's factory activity expanded in July at the slowest pace in 17 months as higher raw material costs, equipment maintenance and extreme weather weighed on business activity, adding to concerns about a slowdown in the world's second-biggest economy. The official manufacturing Purchasing Manager's Index (PMI) eased to 50.4 in July from 50.9 in June, data from the National Bureau of Statistics (NBS) showed, but remained above the 50-point mark that separates growth from contraction. (Reuters)

South Korea: July exports jump to record though growth pace slows. South Korean exports jumped to a record high in July as overseas demand for chips and biohealth products extended export growth to a ninth consecutive month, supporting an economic recovery facing headwind from the country's worst Covid-19 outbreak yet. Exports rose 29.6% in July from the same month a year earlier to USD55.43bn, the largest amount since South Korea began compiling relevant data in 1956, the trade ministry said. (Reuters)

Japan: Industrial production climbs 6.2% in June. Industrial output in Japan advanced a seasonally adjusted 6.2% on month in June, the Ministry of Economy, Trade and Industry said. That beat expectations for an increase of 5.0% following the downwardly revised 6.5% contraction in May (originally -5.9%). On a yearly basis, industrial production spiked 22.6% - roughly in line with expectations following the 21.1% gain in the previous month. Upon the release of the data, the METI maintained its assessment of industrial production, saying that it is picking up. (RTT)

Markets

Malakoff (Outperform, TP: RM1.02): To assess developing rooftop solar projects at police buildings. Malakoff Corp has signed a MoU with Koperasi Polis Diraja Malaysia (KPDRM) to assess the feasibility of jointly developing rooftop solar projects at selected police buildings. The collaboration came under the Net Energy Metering 3.0 scheme or for self-consumption. (BTimes)

Serba Dinamik (Neutral, TP: RM0.44): Bintulu energy hub remains agile, resolute amid Covid-19 uncertainties. Bintulu Integrated Energy Hub (BIEH) in Sarawak remains agile and resolute in responding to an uncertain and challenging economic environment, in its pursuit of long-term growth strategies towards a sustainable future. (BTimes)

Kerjaya Prospek: Bags RM139m job from E&O. Kerjaya Prospek Group has bagged a RM139m contract from Damansara Peak SB. Damansara Peak is an indirect subsidiary company of Eastern & Oriental (E&O). This was the fourth contract secured for the year, bringing the year-to-date contract wins to RM523.5m. Kerjaya Prospek's total outstanding order book now stands at about RM3.4bn. (BTimes)

AYS Ventures: Sells land, properties in Selangor for RM10.8m. AYS Ventures is disposing of a freehold land and properties in Selangor for RM10.8m. The land sale is expected to result in a loss of approx. RM1.2m. It had entered into a sale and purchase agreement to dispose of a freehold land in Kapar, Klang, Selangor, measuring approx. 2.1767 acres. (The Edge)

G Capital: Partners KOP Mantap to develop solar power. G Capital has partnered with KOP Mantap to develop renewable energy (RE) focusing on solar power. Both parties inked a MoU to establish a framework for collaboration regarding business opportunities and potential business ventures. These included developing plots of land with high sun exposure to construct, develop, and operate solar photovoltaic plants. (BTimes)

Leon Fuat: Buys land in Port Klang to expand steel manufacturing business. Leon Fuat is acquiring a leasehold industrial land in Port Klang for RM20.43m to expand its welded steel pipe manufacturing activities. The 27,108 sqm land is located less than 500 metres from the group’s existing welded steel pipe manufacturing plant in Kawasan Perusahaan Bandar Suleiman. (The Edge)

Westports: 2Q net profit jumps 32% on higher container revenue, declares 8.5 sen dividend. Westports Holdings net profit rose by 32.48% to RM177.97m in the 2QFY21 from RM134.34m recorded in the previous year’s corresponding quarter, largely due to higher container revenue. Consequently, EPS jumped to 5.22sen from 3.94sen. (The Edge)

MHB: Narrows operating loss in 2Q21. Malaysia Marine & Heavy Engineering (MHB) narrowed its net loss for the 2QFY21 to RM34.38m from RM397.02m last year, on lower impairments and operating losses in the quarter. Quarterly losses per share shrank to 2.1sen, from 24.8sen last year. The bigger operating losses last year was due to the yard shutdown during the Movement Control Order 1.0. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today as Wall Street stocks followed European and Asian bourses lower on Friday after markets were buffeted last week by jitters over slowing global growth and Beijing’s regulatory crackdown on tech businesses. The S&P 500 closed down 0.5%, although the blue-chip index still notched its sixth consecutive month of gains, boosted by strong corporate earnings and record-low interest rates. The tech-focused Nasdaq Composite slid 0.7%, after the quarterly results of online bellwether Amazon missed analysts’ forecasts. The tech conglomerate’s stock finished the day 7.6% lower, its biggest oneday drop since May 2020. The sell-off on Wall Street comes after the continent-wide Stoxx Europe 600 index ended the session 0.5% lower, having hit a high a day earlier, lifted by a bumper crop of upbeat earnings results. Data released on Thursday showed the US economy grew at a weaker than expected annualised rate of 6.5% in the three months to June, as labour shortages and supply chain disruptions caused by coronavirus persisted. Meanwhile, China’s regulatory assault on large tech businesses has sparked fears of a broader crackdown on privately owned companies.

Back home, the FBM KLCI slipped to below the key support level of 1,500, in line with weaker regional markets which were dragged down by Covid-19 worries. The benchmark index ended 18.33 points or 1.21% lower at its intra-day low of 1,494.6. The regional shares also slid, extending their biggest monthly drop on lingering investor concern over regulatory crackdowns in China on the education, property and tech sectors and a resurgence in Covid-19 cases in the country. The Shanghai Composite Index ended 0.42% lower at 3,397.36, and Hong Kong’s Hang Seng Index fell 1.35% to 25,961.03. Japan’s Nikkei 225 fell 1.8% to 27,283.59, its biggest decline since June 21 and the lowest close since Jan 6. South Korea’s Kospi, meanwhile, tumbled 1.24% to 3,202.32, its sharpest daily fall in more than two months.

Source: PublicInvest Research - 2 Aug 2021