Economy

US: Labour market shows resilience on eve of June's employment report. The number of Americans filing new claims for unemployment benefits increased moderately last week, while private payrolls surged in June, suggesting that the labour market remained on solid ground despite growing risks of a recession. The reports which also suggested that laid-off workers were experiencing shorter spells of unemployment, made it more likely that the Fed would resume raising interest rates this month after pausing in June. Though job openings fell to a two-year low in May, they remained well above their pre-pandemic levels, with 1.6 vacancies for every unemployment person. More people are quitting their jobs, a sign of confidence in the labour market. (Reuters)

EU: Eurozone retail sales remain flat for second month. Eurozone retail sales showed stagnation for the second straight month in May, data from Eurostat revealed. Retail sales remained unchanged on a monthly basis in May, the same as in April. In March, sales dropped 0.4%. Meanwhile, economists had forecast sales to rise by 0.2%. Food, drink, and tobacco sales declined 0.5%, while non-food product turnover increased 0.1%. Sales of automotive fuel in specialized stores slid 0.3%. (RTT)

EU: German factory orders growth exceeds expectations. Germany's factory orders logged a much faster than expected growth in May driven by the surge in demand for volatile 'other transport equipment, official data revealed. Elsewhere, a private survey showed that the German construction sector contracted the most since February 2021 as higher interest rates and economic uncertainty weighed on demand. Factory orders advanced 6.4% on a monthly basis in May, following a 0.2% rise in April, Destatis reported. (Reuters)

UK: Construction shrinks for first time in 5 months. The UK construction sector contracted for the first time in five months in June due to the downturn in housing activity, survey results from S&P Global showed. The Chartered Institute of Procurement & Supply construction Purchasing Managers' Index slid to 48.9 in June from 51.6 in May. (RTT)

Australia: Trade surplus rises to AUD11.79bn. Australia's foreign trade surplus increased in May as exports grew faster than imports, the Australian Bureau of Statistics said. The seasonally adjusted trade surplus climbed to AUD11.79bn in May from A$10.45 billion in the previous month. In the corresponding month last year, the surplus was AUD14.37bn. Exports rose 4.4% MoM in May, driven by non-monetary gold. Imports showed a comparatively slower increase of 2.5% (RTT)

Taiwan: Inflation eases to 1.75%, lowest in 27 months. Taiwan consumer price inflation eased more-than-expected in June to the lowest level in more than two years, largely due to a slowdown in food prices, data released by the Directorate General of Budget, Accounting, and Statistics showed. The CPI rose 1.75% YoY in June, slower than the 2.02% rise in May. Economists had forecast inflation to drop to 1.90%. Further, this was the weakest inflation rate since March 2021, when prices had risen 1.22%. Food price inflation eased notably to 1.4% in June from 3.0% in May. (RTT)

Markets

Mah Sing: Another project by Mah Sing in Kepong. Mah Sing Group will be developing a 4.88-acre residential development in Kepong, Kuala Lumpur, with a total estimated GDV of RM500m. It will be the group’s fourth project in Kepong, as well as its fourth land acquisition for 2023, contributing to a total combined estimated GDV of RM5bn to date. (StarBiz)

Heitech Padu: Secures two contract extensions from JPJ worth RM54m. Technology services provider Heitech Padu announced that it has secured two contract extensions from the Road Transport Department (JPJ) amounting to an additional contract value of RM54.33m. The group shared that both contracts have been extended for 12 months, commencing 1 May 2023 until 30 April 2024. (The Edge)

Revenue: Seeks extension up to March 2024 to convene next AGM. Revenue Group, which was embroiled in a boardroom tussle, is seeking an extension up to next March to hold its 2023 AGM. It has sought approval from the Companies Commission of Malaysia for an extension of up to 31 March 2024, to hold its next shareholders’ meeting under Section 340 of the Companies Act 2016. (The Edge)

SCIB: Warns of potential impairment impact after contract termination. Sarawak Consolidated Industries (SCIB) said its financial year ended 30 June 2023 will be negatively impacted should a full impairment pertaining to final claims, worth RM18.72m, from a contract termination involving civil servant housing development works in Perak, be made. The group’s subsidiary SCIB Properties SB (SCIBP) and Awana JV Suria Saga SB (AJVS) have mutually agreed to scrap the EPCC contract involving housing development works in Muallim, Perak. (The Edge)

Sunway Group: Completes RM30m upgrading works at Sunway Serene. Sunway Property, the property division of Sunway Group, has completed its RM30m public infrastructure upgrading works in Petaling Jaya, with the final milestone being today’s official opening of the 250-metre-long Sunway Serene bridge. Sunway Group founder and chairman Tan Sri Dr Jeffrey Cheah said the project consists of extensive upgrades to existing road networks as well as rehabilitation of the 15-acre Sunway Serene Lake in tandem with its planning for the 17-acre Sunway Serene development. (StarBiz)

MN Holdings: Secures RM11.2m underground utilities contract for Airtrunk Data Centre. MN Holdings unit has secured an underground utilities contract worth RM11.2m at the AirTrunk Data Centre in Johor. The underground utilities and engineering specialist said its wholly-owned subsidiary Mutu Nusantara SB received the letter of award and acceptance from the main contractor, Rentak Segar SB. (StarBiz)

Sersol: Gets court order restraining CEO and several directors from exercising power. Sersol has been served with a court order that restrains its executive chairman cum managing director, CEO, an executive director and five independent directors from exercising their powers. Sersol said the ad-interim order issued by the High Court is valid until 17 July, when an injunction application is fixed for hearing and an originating summons is fixed for case management. (The Edge)

Market Update

The FBM KLCI might retreat at opening today after global stocks and bonds fell on Thursday as investors were caught off guard by robust US economic data and a signal from the Federal Reserve that it would raise interest rates further to tame inflation in the world’s largest economy. Benchmark stock indices in the US, Europe and Asia dropped in a broad-based sell-off after minutes on Wednesday of the Fed’s latest meeting showed officials intend to resume interest rate rises, despite pausing their programme of monetary tightening in June. The FTSE All-World index shed as much as 1.7%, before recovering slightly to end 1.2% lower — still marking one of its worst single-day performances this year. In New York the S&P 500 index fell 0.8%, as did the Nasdaq Composite, trimming steeper losses earlier in the session. The Stoxx Europe 600 index fell 2.3%, with 580 stocks in the benchmark declining. Elsewhere in Europe, France’s Cac 40 fell 3.1%, Germany’s Dax lost 2.6% and London’s FTSE 100 dropped 2.2%.

Back home, Bursa Malaysia closed on a softer note despite Bank Negara Malaysia’s decision to retain the overnight policy rate (OPR) at 3%. At the closing bell, the FBM KLCI fell 3.95 points, or 0.28%, to 1,385.95 from 1,389.90 at Wednesday’s close. In the region, Hong Kong’s Hang Seng index fell 3% and the Chinese CSI 300 lost 0.7%.

Source: PublicInvest Research - 7 Jul 2023