Economy

Global: World Bank sees major economies growing at much slower pace thanks to higher rates and banking stress . Higher rates and overhangs from this year’s banking crisis will drastically slow economic growth for the biggest global economies, the World Bank. The institution said advanced economies, the US, Japan and euro area countries are expected to grow by only 0.7% in 2023, down from 2.6% in 2022.. (CNBC)

EU: German construction downturn continues in May . Germany's construction sector continued to contract in May, largely due to a further plunge in housing activity amid weaker demand conditions. The HCOB construction Purchasing Managers' Index climbed to 43.9 in May from 42.0 in the previous month. However, any score below 50 indicates contraction in the sector. Moreover, the reading stayed within the contraction zone for the fourteenth successive month. (RTT)

UK: Construction growth hits 3-month high . The UK construction sector expanded at the sharpest pace in three months in May, driven by faster gains in commercial building and civil engineering activity. The Chartered Institute of Procurement & Supply construction PMI rose to 51.6 in May from 51.1 in April. The score was expected to remain stable at 51.1. (RTT)

China: Asked big banks to cut deposit rates to boost growth . Chinese authorities asked the nation’s biggest banks to lower their deposit rates for at least the second time in less than a year, according to people familiar with the matter, marking an escalated effort to boost the world’s second-largest economy. (Bloomberg)

Australia: Central bank raises rates to 11-yr high, warns more hikes likely . Australia's central bank raised interest rates by a quarter-point to an 11-year high, and warned that further tightening may be required to ensure that inflation returns to target. Wrapping up its June policy meeting, the RBA hiked the cash rate to 4.1%, saying inflation is still too high and that it wanted to prevent high price expectations from becoming entrenched. (Reuters)

Thailand: Exports seen rising up to 1% this year, say shippers. Thailand's exports are likely to be flat or rise up to 1% this year, as global demand has slowed but a weak baht is providing support. The strong export markets were the US and Europe, but China was not as active though gradually improving, chairman of the Thai National Shippers' Council, Chaichan Chareonsuk told a press conference. Exports, a key driver of Thai growth, could contract between 5% to 6% in the first half of the year from a year earlier, before picking up in the second half, the council said in a statement. (Reuters)

Thailand: May headline inflation lowest in 21 months . Thailand's headline inflation rate dropped to its lowest in 21 months in May due to falling energy and food prices and a high base in 2022. The headline CPI rose 0.53% in May from a year earlier, below a forecast rise of 1.70% in a Reuters poll, and against April's 2.67% YoY increase. The core CPI index in May rose 1.55% from a year ago, below a forecast increase of 1.6%, and against April's 1.66% rise. It was the third month in a row that headline inflation came in within the central bank's target range of 1% to 3%. (Reuters)

Markets

Ahmad Zaki: Awarded LOA for Cameron Highlands road plan and bypass project. Ahmad Zaki Resources Bhd (AZRB) has been awarded a letter of acceptance (LOA) by the government for the Cameron Highlands road plan and bypass project to commence on June 15, 2023. The group revealed that the contract value is RM122.5m, and that it is for a duration of 42 months. The road plan and bypass project consists of two site locations, namely: i) the McDonald’s roundabout-Time Tunnel Museum, which will bring about the upgrade of the 1km-long FT59 route; and ii) Kea Farm. The contract is expected to contribute positively to the group’s future earnings. (The Edge)

Yinson: indirect JV gets five-year extension for FSO charter contract. Yinson Holdings' offshore production unit Yinson Production (YP), via its joint-venture company PTSC South East Asia (PTSC SEA), has received a five-year extension for the bareboat charter contract for FSO PTSC Bien Dong 01. The extended period of the contract is from June 4, 2023 to June 3, 2028. FSO PTSC Bien Dong 01 has been operating in Block 05- 2/05-3, Vietnam since June 4, 2013. (The Edge)

AWC: Secures four LRT-related contracts from Prasarana worth RM52m. AWC said it has secured four light rail transit (LRT)- related contracts in the Klang Valley from Prasarana Malaysia Bhd worth a total of RM51.9m. Three of the contracts, with a total value of RM44.3m, are for the design, supply and commissioning of new base plates for the Ampang Line - Phase 1 (Plaza Rakyat to Sultan Ismail stations), testing, commissioning and warranty of a rail profile grinding machine for the Ampang line, and a new underfloor lathe for the Kelana Jaya line. (The Edge)

HSS Engineers: Gets RM8.9m engineering design and consultation contract. HSS Engineers (HEB) has accepted a letter of award worth RM8.9m from China State Construction Engineering (M) SB for the provision of professional engineering design and consultation services. The contract is in respect of the proposed data centre at Cyberjaya for Infinaxis Data Centre SB. (StarBiz)

Able Global: Announces one sen dividend, to be paid on June 30. Able Global has announced a single-tier first interim dividend of one sen per share for the FYE 2023, with an ex date of June 19 and payment date of June 30. (The Edge)

Ramssol Group: Appoints Abdul Harith Abdullah as chairman. Ramssol Group has appointed Datuk Abdul Harith Abdullah as its new independent non-executive chairman effective today, succeeding Datuk Seri Vignaesvaran Jeyandran, who retired from the position on June 1, 2023. (StarBiz)

IPO: Skyworld eyes 3Q Main Market listing, inks underwriting deal with Kenanga Investment Bank. SkyWorld Development has signed an underwriting agreement with Kenanga Investment Bank for its IPO and listing on the Main Market of Bursa Malaysia, which it targets to take place in the third quarter of 2023. The IPO entails a public issue of 208m new shares and an offer for sale of 192m existing shares. (The Edge)

Market Update

The FBM KLCI might open higher today after Wall Street stocks rose on Tuesday, led by financials and consumer discretionary stocks as investors consider the path forward for US monetary policy. Wall Street’s benchmark S&P 500 finished 0.2% higher, just short of the technical bull-market territory it briefly entered on Monday after it had risen more than a fifth above its recent low in October 2022. Financial and consumer discretionary stock led the gains on the blue-chip index, with both sectors rising about 1%. Regional banking stocks advanced, with the KBW Regional Banking index 5.4% higher. The tech-heavy Nasdaq Composite rose 0.4%, having reversed its early morning losses. In Europe, the region-wide Stoxx 600 rose 0.4%, recouping earlier losses, while Germany’s Dax added 0.2% and France’s CAC 40 gained 0.1%. The moves came as Eurostat, the Eurozone’s statistics agency, reported retail sales volumes fell 2.6% year on year in April, following a 3.3% fall in the previous month, as the bloc’s high borrowing costs continued to weigh on household consumption.

Back home, Bursa Malaysia settled slightly higher at the close on Tuesday (June 6), backed by mild buying support for selected heavyweights, amid a mixed regional market performance. At the closing bell, the FBM KLCI had risen 1.91 points to 1,383.17, from 1,381.26 at the close last Friday. The regional markets were muted, as Hong Kong’s Hang Seng index lost 0.1% while the CSI 300 index of Shanghai- and Shenzhen-listed stocks was down 0.9%. Japan’s benchmark Topix bucked the downward trend, shrugging off early losses to rise 0.7%. Japanese real wages contracted for a 12th month, according to data released on Tuesday, reinforcing expectations that the Bank of Japan will maintain its ultra-loose monetary stance.

Source: PublicInvest Research - 7 Jun 2023