Economy

US: Weekly jobless claims remain at highest level since Oct 2021. First time claims for US unemployment benefits were unchanged in the week ended June 17th. Initial jobless claims came in at 264,000, unchanged from the previous week's revised level. (RTT)

US: Existing home sales unexpectedly inch higher in May. A modest increase in US existing home sales shown in the month of May. Existing home sales crept up by 0.2% to an annual rate of 4.30m in May after tumbling by 3.2% to a revised rate of 4.29m in April. The uptick surprised economist, who had expected existing home sales to decrease by 0.6% compared to the 3.4% plunge originally reported for the previous month. (RTT)

EU: Eurozone private sector moves closer to stagnation. The euro area private sector growth moved close to stagnation after the brief growth revival in the spring. The flash composite output index fell to 50.3 in June from 52.8 in May. This was the lowest reading since Jan and also remained below economists' forecast of 52.5, suggesting a considerable loss of growth momentum. (RTT)

EU: Turkey trade deficit widens to USD12.5bn. Turkey's foreign trade gap increased in May from the previous year as imports rose faster than exports. The trade deficit widened to USD12.5bn in May from USD10.7bn a year ago. In April, the trade deficit was USD8.7bn. Exports rose 14.4% annually in May, and imports surged 15.5%. (RTT)

UK: Private sector growth weakest in 3 months. The UK private sector expanded for the fifth straight month in June albeit at the slowest pace in three months as the upturn in services activity was largely offset by the contracting manufacturing sector. The Chartered Institute of Procurement & Supply flash composite output index dropped to 52.8 in June from 54.0 in May. The expected score was 53.6. Nonetheless, any reading above 50 indicates expansion in the sector. (RTT)

UK: Retail sales log unexpected growth in May. UK retail sales logged an unexpected growth in May as bank holidays and warm weather boosted demand for outdoor-related goods and summer clothing. Despite high inflation, British consumer confidence rose for the fifth consecutive month in June to hit a 17-month high. Retail sales grew at a pace of 0.3% in May from April. This was in contrast to the expected fall of 0.2%. Nonetheless, the pace of growth slowed from April's 0.5% increase. (RTT)

Japan: Inflation stays above BOJ target, key gauge hits 42-year high. Japan's core CPI exceeded forecasts in May and an index excluding fuel costs rose at the fastest annual pace in 42 years, highlighting broadening price pressure that will keep the central bank under pressure to phase out its massive stimulus. (Reuters)

Japan: Appetite for Russian fishery products remains strong. Japan's imports of Russian fishery products are humming along despite sluggish movements of people and goods between the two countries due to continued economic sanctions against Russia over the Ukraine war. Following the national trend, imports of fishery products from Russia to Hokkaido, the northernmost of Japan's four main islands, are also hovering at high levels, led by sea urchins and crabs. (Nikkei Asia)

Markets

TM (Outperform, TP: RM6.20): Leverages Maxis’ infrastructure to enhance mobile connectivity. Telekom Malaysia (TM) has entered into a collaboration with Maxis that will see TM getting access to Maxis' 4G Multi Operator Core Network, as well as 4G and 2G domestic roaming services to enhance its mobile connectivity nationwide. Through this, TM will extend its 4G coverage across the country by leveraging Maxis’ RAN infrastructure and improve Unifi Mobile's population coverage to above 95%. (The Edge)

Sports Toto (Neutral, TP: RM1.40): Buys shares in 7-Eleven and Berjaya Food for RM38.8m. Following the share purchases, SPToto now hold about 25.4m shares or about 2.29% stake in the convenience store and pharmacy operator and about 7.46m shares or about 0.43% stake in BFood that runs the Starbucks coffee chain. The acquisitions were funded through internal funds of the SPToto group. (The Edge)

Kumpulan Kitacon: Clinches RM50m job in Ijok. Kumpulan Kitacon received the contract from Eco World Development Group Bhd’s 60%-owned unit Paragon Pinnacle SB to build 80 units of single-storey terrace houses, one unit of electrical substation, and emblem fencing under Package 1. The second package involves the construction of 104 units of single-storey terrace houses and another electrical substation unit. The project will start on June 26 and is to be completed within 15 months. (The Edge)

HHRG: To purchase Penang industrial land for RM15.7m. HHRG, has proposed to acquire a 7.23-acre leasehold industrial land in Penang for RM15.74m via cash and share issuance. The biomass material manufacturer plans to utilise the industrial land as the site of its new corporate headquarters. The land is strategically located 17.5km to the southeast of Penang Sentral, 24km to the Butterworth Port, and 36km to the Penang International Airport. (The Edge)

Pertama Digital: Macquarie Bank subscribes for 425,000 shares at RM2.69 per share. Macquarie has subscribed for 3.45m shares, at issue prices of between RM2.605 and RM2.825. In March, it was reported that Pertama Digital expected to raise gross proceeds of up to RM87.8m from the subscription of new shares in the group by Macquarie in a placement of up to 43m new shares. (The Edge)

MSM Malaysia: Joins Asean Sugar Alliance for better global market access. MSM Malaysia Holdings is now a part of the Asean Sugar Alliance (ASA) which will help the refined sugar producer to expand its export market. The ASA membership would further support MSM’s vision to grow its export market share from 6% to 12-15% in the region. (The Edge)

NWP: To be Auro Holdings from June 27, reflecting diversification into sand dredging business. NWP Holdings shares will be traded under its new name Auro Holdings, with effect from next June 27, to reflect a new corporate identity under its business activities and brand image. The counter’s new short name will be “Auro”, replacing the old stock short name “NWP”. (The Edge)

Market Update

The FBM KLCI might open lower today after global stocks fell on Friday, capping their worst week since March as investors in the US and Europe fretted over the prospect of further interest rate increases and potential recession. The FTSE All-World index, which tracks the largest companies globally, slid 1%, bringing its weekly fall to 2.2% — its worst performance since the US regional banking crisis began in March with the collapse of Silicon Valley Bank. The Europe-wide Stoxx 600 and Wall Street’s benchmark S&P 500 also suffered their worst week since March. The S&P 500 dipped 0.8% for the day and 1.4% for a week shortened by the Juneteenth US holiday on Monday. The Stoxx 600 slipped 0.3% on Friday and 2.6% over the week. The moves followed a week of hawkish signals from policymakers in the US and Europe, as central banks prioritised their battle against stubbornly high inflation even as several economic indicators pointed to a slowdown on both sides of the Atlantic.

Back home, Bursa Malaysia snapped three straight days of gains to end the week on a weaker note amid a worldwide sell-off on worries over the global economic outlook. At the closing bell, the FTSE Bursa Malaysia KLCI (FBM KLCI) fell 3.78 points, or 0.27%, to 1,390.89 from 1,394.67 at Thursday’s close. In the region, Japan’s Topix index dropped 1.4% after an important gauge of the country’s consumer prices rose at its fastest pace in 42 years in May, increasing the challenges for the central bank as inflation has proved stickier than expected.

Source: PublicInvest Research - 26 Jun 2023