Economy

Global: IMF urges Fed, central banks to keep tightening to reduce inflation . The International Monetary Fund urged the US Federal Reserve and other global central banks to “stay the course” on monetary policy and remain vigilant in combating inflation. IMF spokesperson Julie Kozack said inflation momentum has slowed in the United States, but remained a pressing concern. (Reuters)

US: Weekly jobless claims increase more than expected . The number of Americans filing new claims for unemployment benefits surged last week, suggesting that the labour market was slowing amid mounting risks of a recession. Initial claims for state unemployment benefits jumped 28,000 to a seasonally adjusted 261,000 for the week ended June 3, the Labor Department said. Economists polled by Reuters had forecast 235,000 claims for the latest week. Despite the surge in applications, claims remain at levels consistent with a tight labour market. (Reuters)

US: Wholesale inventories edge slightly lower in April . A report released by the Commerce Department showed a slight decrease in US wholesale inventories in the month of April. The Commerce Department said wholesale inventories edged down by 0.1% in April after dipping by a revised 0.2% in March. Economists had expected wholesale inventories to slip by 0.2% compared to the unchanged reading originally reported for the previous month. (RTT)

EU: Eurozone succumbs to mildest of recessions on energy shock. The euro area suffered the mildest possible recession during the winter after Russia’s war in Ukraine sent energy prices soaring. The 20-nation economy shrank by 0.1% between Jan and March, revised data showed, adding to a fourth-quarter decline of the same magnitude and resulting in the first six-month contraction since the Covid-19 pandemic. (Bloomberg)

EU: France payroll employment rises 0.3% in 1Q . France's payroll employment increased in the first quarter, reflecting the improvement in private sector job creation, final data from the statistical office INSEE showed. Overall payroll employment grew 0.3%, or 92,400, in the first quarter. This was slightly faster than the 0.2%, or 55,400 jobs, created in the fourth quarter. (RTT)

South Korea: Has USD0.79bn current account shortfall . South Korea posted a current account deficit of USD0.79bn in April, the Bank of Korea said. That exceeded expectations for a shortfall of USD1.38bn following the downwardly revised USD0.16bn surplus in March (originally USD0.27bn). (RTT)

Markets

DRB-Hicom (Outperform, TP: RM2.10): Proton sales up 40.9% in May. National carmaker Proton Holdings’ sales in its domestic and export markets rose 40.9% in May 2023 to 13,268 units MoM. The performance followed a slow start to the second quarter of the year due to the Malaysian automotive market being affected by the festive period and the ending of deliveries for tax-exempted cars in March. (The Edge)

SunCon: Disposes of machinery for RM43.4m. Sunway Construction Group (SunCon) is disposing of machinery that was used for the construction of a prefabrication plant in Singapore, for RM43.4m. The transaction will allow HLSJV to apply for incentives offered by the relevant Singapore authority for technology adoption and innovation that improves productivity at the construction sites. (StarBiz)

Revenue Group: Co-founder and ex-director Brian Ng Shih Chiow charged with forgery for cheating. Revenue Group's former director Brian Ng Shih Chiow, who is also a co-founder of the cashless payment solution provider, has been charged in the Sessions Court with 12 counts of forgery of invoices and purchase orders with the purpose of cheating the company. Shih Chiow, 50, was charged with forging invoices and purchase orders, amounting to RM13.8m, for several companies. (The Edge)

Sentral REIT: Plans to acquire Menara CelcomDigi from MRCB. Sentral REIT plans to acquire 27-storey Menara CelcomDigi in Petaling Jaya from MRCB. Sentral REIT Management SB, has accepted a letter of intent issued by MRCB to commence negotiations for the proposed acquisition. Menara CelcomDigi is currently leased out to Celcom Bhd (formerly known as Celcom Axiata) with a lease term of 15 years, which may be extended automatically for another two terms of three years each. (The Edge)

George Kent: Inks MOU with University of Technology Sarawak. George Kent has entered into a MOU with the University of Technology Sarawak marking a milestone in fostering collaboration in human capital development and related activities. Under this MOU, both parties aim to cooperate on amongst others the development and conduct of academic, professional and industrial training programmes, exchange technical know-how and advisory, carry out joint research, innovation and teaching activities as well as jointly participate in course improvements and delivery. (StarBiz)

PBA: Secures three-year renewal of Penang water licence. The government has renewed PBA Holdings’ water supply licence in Penang for another three years. PBA said Minister of Natural Resources, Environment and Climate Change Nik Nazmi Nik Ahmad approved its application to renew its wholly-owned subsidiary Perbadanan Bekalan Air Pulau Pinang Sdn Bhd’s individual licence (Facilities and services) pursuant to the Water Services Industry Act 2006 (WSIA). (The Edge)

HSS Engineers: Eyes RM300m new contract wins in FY23. HSS Engineers is targeting to secure new contracts worth RM300m for the FY2023. Executive vice-chairman Tan Sri Kunasingam Sittampalam said the group has a tender book worth RM415m, with a 50% success rate based on its track record for engineering design, supervision and project management. (StarBiz)

Market Update

The FBM KLCI might open higher today after Wall Street stocks advanced on Thursday powered by gains in tech, while Treasuries rose after fresh data pointed to a cooling US labour market that would support the case for a pause of interest rate rises by the Federal Reserve next week. The benchmark S&P 500 closed 0.6% higher, lifting the blue-chip stock index into bull market territory, defined as a rise of 20% or more from the most recent low, which was hit last October. Investors returned to tech, with the tech-heavy Nasdaq Composite adding 1%, reversing its losses from the previous session. European markets traded cautiously, as traders tried to gauge the next policy move of the European Central Bank, due to announce its decision on interest rates next Thursday. Europe’s region-wide Stoxx 600 ended the day flat, while Germany’s Dax rose 0.2% and France’s Cac 40 added 0.3%. Downwardly revised figures released earlier in the day showed that the Eurozone economy shrank in the past two quarters, with the bloc’s output having declined at a quarterly rate of 0.1% in both three-month periods.

Back home, Bursa Malaysia closed lower on Thursday for the second consecutive day, as selling pressure persisted, mainly on telecommunications and commodity related stocks. At the closing bell, the FBM KLCI had fallen 4.01 points or 0.29% to 1,374.64, from 1,378.65 at Wednesday’s close. The regional equities ticked up, with Hong Kong’s Hang Seng index adding 0.3% and China’s CSI 300 gaining 0.8%. Japan’s Topix bucked the trend, falling 0.7%.

Source: PublicInvest Research - 9 Jun 2023