Economy

US: Existing home sales slide again in June. US existing home sales fell for a fifth straight month in June to the lowest level in two years as record-high prices and fast-rising interest rates make buying a home too expensive for a growing share of American households. Sales of previously owned homes fell 5.4% to a seasonally adjusted annual rate of 5.12m units last month, the lowest level since June 2020 when sales were rebounding from the COVID-19 lockdown slump. (Reuters)

EU: ECB to hike rates for first time in over a decade. The ECB is set to deliver the first hike in interest rates in 11 years, and follow up with another such move in Sept, and may also provide guidance on the proposed anti-fragmentation tool. Economists widely expect the Governing Council to raise rates by 25 basis points, as the bank announced in June. That said, many are not ruling out a bigger than expected 50 basis points hike as the euro area inflation keeps setting new records, and many signs of slowing economic growth have surfaced recently. (RTT)

EU: Current account deficit remains unchanged. The eurozone current account deficit remained unchanged in May, the European Central Bank said. The current account deficit held steady at EUR4.0bn in May. In the same period last year, there was a surplus of EUR27bn. In May, the surplus on services was offset by deficits in the secondary income and goods trade. RTT)

UK: House price growth at 11-month high. UK house prices grew at the fastest pace in nearly a year in May, the Office for National Statistics said. House prices grew 12.8% on a yearly basis in May after rising 11.9% in April. This was highest rate since June 2021. The ONS said it is worth noting that the annual increase may be somewhat attributable to the slow growth experienced in early 2021, as well as the strength seen across recent months. RTT)

UK: Inflation strongest in 4 decades. UK consumer prices grew at the sharpest pace in four decades in June and factory gate inflation hit the highest since 1977, raising prospects of a 50 basis point rate hike by the BOE at its Aug meeting. Consumer price inflation accelerated more-than-expected to 9.4% in June on rising motor fuel and food prices. Inflation was forecast to rise to 9.3% from 9.1% in May. Inflation was the highest since early 1982. (RTT)

China: Leaves lending rates unchanged. China's central bank held its benchmark lending rates steady, as widely expected, despite the tightening stance adopted by its global peers. The PBOC kept the five-year loan prime rate, or LPR, the benchmark for mortgage rates, unchanged at 4.45%. The rate was lowered by a record 15 basis points in May and by five basis points in Jan. (RTT)

Taiwan: June export orders jump; outlook clouded by global woes. Taiwan’s export orders, a bellwether for global technology demand, logged a strong annual rise in June, recovering from COVID-19 lockdowns in China and global supply chain disruptions, but the government warned of a clouded outlook for global trade. (Reuters)

Markets

FGV (Neutral, TP: RM1.61): Proceeds with recruitment of 1,210 Indonesian workers despite temporary ban. FGV will proceed with the recruitment of 1,210 workers from Indonesia as part of their earlier arrangement, and it will help to reduce the current shortage of 30% (approximately 10,000 migrant workers in the company) responding to Indonesia's move to impose a temporary freeze on sending migrant workers to Malaysia. (The Edge)

PRG: Partners with NCT Land to provide smart energy efficiency solution. PRG Holdings’ subsidiary Furniweb Holdings Ltd has entered into a MOU with NCT Land SB, to explore the viability of a smart energy efficiency solution for the latter’s development project in Kuala Langat, Selangor. PRG said Furniweb’s associate company Measurement & Verification Sdn Bhd (M&V MY) will provide the solution with the collaboration to run for three years from the date of execution of the MOU. (The Edge)

Southern Steel: Singapore CoA affirms Italian plant maker to pay RM83m to company but sets aside RM176 mil damages. The Singapore Court of Appeal (CoA) has affirmed that Southern Steel (SSB) is to receive RM82.57m from Danieli & C Officine Meccaniche, but it set aside the RM176.25m in damages awarded by a Singapore Tribunal. It was previously reported that SSB terminated the contract as Danieli failed to remedy and resolve issues set out in the notice of termination, after the latter failed to fulfil its contractual obligations. (The Edge)

YKGI: To raise up to RM5.53m from private placement for working capital. YKGI Holdings plans to raise a maximum of RM5.5m in a proposed private placement of up to 48.12m shares or 10% of the total number of issued shares, at an issue price to be determined later. YKGI hopes to use the proceeds, with an estimated 70% allocation of proceeds for purchase of raw materials and payment to suppliers and the other 30% for general operating and other administrative expenses. (The Edge)

Catcha Digital: One step closer to exiting GN2 status. Catcha Digital has received approval from shareholders for its long-awaited regularisation plan. The regularisation plan will involve the acquisition of the entire equity interest of iMedia Asia SB, an integrated digital media solutions provider, with approximately 12.7m users visiting its websites and social media platforms in June 2022. (The Edge)

Tex Cycle: JV unit inks 20-year PPA in Thailand. Tex Cycle’s JV has inked a 20-year solar power purchase agreement with Thailand-based Bothong Rubber Fund Cooperative Ltd. Pursuant to the PPA, its JV unit will design, construct, install, own, operate and maintain a solar photovoltaic energy generating system with the capacity of 999.24KWh of electricity at the premises of Bothong Rubber Fund. (The Edge)

UCrest, MGRC: Inks deal to integrate genomic testing in iMedic platform. UCrest and Malaysian Genomics Resources Centre (MGRC) signed a collaborative agreement to integrate genomic testing services into the digital health platform, iMedic. A virtual genome service centre will be developed on the iMedic platform, enabling the genomic testing services of MGRC to be made available to hospitals and clinics (B2B), widening its market access not just in Malaysia but globally. The genomic testing services will be made available to patients directly (B2C). (BTimes)

Market Update

The FBM KLCI might open higher today as Wall Street technology stocks rose on Wednesday, with strong gains for streaming companies after Netflix lost fewer subscribers than feared in the second quarter. The tech-dominated Nasdaq Composite climbed as much as 1.9% in early trading, though it trimmed some of its gains after The Information reported that Google-parent Alphabet would temporarily pause new hiring. The Nasdaq closed 1.6% higher for the day, while the S&P 500 gained 0.6%. Shares in Netflix rose 7.4% after it said late on Tuesday that subscriber numbers fell less than forecast during the second quarter. The company added that it was “confident and optimistic about the future”, even as its subscriber projections for the third quarter fell short of analysts’ expectations. Elsewhere in equity markets, Europe’s regional Stoxx 600 gauge closed 0.2% lower.

Back home, Bursa Malaysia closed higher across the board on Wednesday as bargain hunting emerges amid the improving investor sentiment across the region. At closing, the FBM KLCI rose 8.22 points, or 0.58%, to 1,436.98 from Tuesday’s close of 1,428.76. In the region, most major benchmarks rose. The Shanghai Composite Index climbed 0.8%, and Hong Kong’s Hang Seng rose 1.1%. Japan’s Nikkei 225 rose 2.7%.

Source: PublicInvest Research - 21 Jul 2022