Economy

US: Key Fed inflation rate falls to lowest annual level in nearly 2 years. Inflation showed further signs of cooling in June, according to a gauge released Friday that the Fed follows closely. The personal consumption expenditures price index excluding food and energy increased just 0.2% from the previous month. Core PCE rose 4.1% YoY, compared with the estimate for 4.2%. (CNBC)

US: Personal income rises 0.3% in June, less than expected. Personal income in the US increased by less than expected in the month of June. The report said personal income rose by 0.3% in June after climbing by an upwardly revised 0.5% in May. Economists had expected personal income to increase by 0.5% compared to the 0.4% advance originally reported for the previous month. (RTT)

EU: Irish economy rebounds 3.3% in Q2. Ireland's economy expanded in the Q2 2023 after contacting in the previous quarter, mainly driven by the strong performance in the multi-national dominated industry sector. GDP advanced a seasonally adjusted 3.3% sequentially in the June quarter, in contrast to a 2.8% fall in the March quarter. (RTT)

EU: Belgium economy expands at slower rate. Belgium's economic growth eased in the second quarter. GDP grew seasonally and calendar-adjusted 0.2% from the first quarter, when the economy expanded 0.4%. Compared to the same quarter last year, GDP advanced 0.9% in the second quarter, slower than the 1.3% gain in the first quarter. QoQ, the value added dropped 1.0% in industry, while the service sector continued to log positive growth of 0.5%. Value added rose slightly by 0.1% in the construction industry. (RTT)

UK: Whipsawed UK traders get no rest with BOE rates. Volatility is rising in UK bond markets ahead of a knife-edge interest-rate decision from the BoE. While money market pricing and economist surveys tilt toward a quarter-point hike, investors are bracing for a surprise, with Goldman Sachs Group Inc, HSBC Holdings Plc, Barclays Plc and UBS Group AG envisaging 50bps of tightening. The contrast with the well-telegraphed, quarter-point hikes delivered last week by the Fed and the ECB couldn’t be starker. (Bloomberg)

Japan: BOJ’s surprise foreshadows end to key anchor for global yields. The BOJ finally appears to be preparing for an end to its controversial yield curve control program, a policy that has helped provide an anchor for interest rates around the world. BOJ Governor Kazuo Ueda surprised investors by announcing the central bank would allow yields to rise above a ceiling it now calls a point of reference. (Bloomberg)

Taiwan: GDP recovers 1.45% in Q2. Taiwan's economy expanded in the second quarter after remaining in contraction for the previous three quarters, boosted by a surge in private consumption. GDP advanced 1.45% YoY in Q2, reversing a 2.87% fall in the previous quarter. On a QoQ seasonally-adjusted annualized basis, GDP grew sharply by 7.02% versus a 2.36% fall in the March quarter. (RTT)

Markets

Astro (Neutral, TP: RM0.70): To undertake VSS to improve financial standing. Astro Malaysia Holdings will be undertaking a voluntary separation scheme (VSS) to allow the company to focus on core business activities and improve financial performance by simplifying the organisation, streamlining operations and reducing operating expenses. The VSS aims to support its ongoing transformation and is offered on a purely voluntary basis. (The Edge)

Synergy House: Eyes foreign markets. Synergy House will aggressively capitalise on the rapid growth of the global furniture market by capturing the Asia Pacific and European markets through e-commerce. The Group is expanding its market reach to new international territories. (BTimes)

Bina Puri: JV gets RM72.9m sub-contract from Public Works Department. The sub-contract period is 24 months starting from July 17, 2023. The contract is for all the works under a project known as Jalan Kampung Medong/Lebrasau/Kampung Klid, Daerah Dalat, Bahagian Mukah, under a sub-contract agreement with Tokoh Ilham SB. (The Edge)

Gas Malaysia: Teams up with Tokyo Gas Network in expertise exchange. Gas Malaysia and Tokyo Gas Network Co Ltd have signed a MOU to cooperate and collaborate with each other to exchange expertise and information for the purpose of an employee exchange programme. Under the MOU, both firms intend to facilitate the exchange of expertise in their respective gas distribution business. (The Edge)

ManagePay: To raise up to RM14m via private placement. The proposed placement entails the issuance of up to 98.2m new shares at an issue price to be fixed at a later date. It has identified potential investments such as QuicKash P2P financial and QuicKredit online lending platforms and HomeRemit cross-border remittance platform. (The Edge)

GDB Holdings: Rises after being awarded RM98m by adjudicator over 8 Conlay project termination. GDB Holdings shares rose 2.5 sen or 11.9% to 23.5 sen July 28, after reporting a favourable decision for the group in an adjudication proceeding relating to the 8 Conlay project termination dispute. The adjudicator had ordered KSK Land SB to pay RM97.8m to Grand Dynamic Builders. (The Edge)

IPO: Glostrext to raise RM20.1m via ACE market listing. The company plans to use RM11.7m raised from the IPO to expand its structural and ground instrumentation and monitoring business into Singapore and for working capital. A further RM1.8m of the proceeds will fund further research and development activities to enhance the automation and accuracy of its service offerings. The remainder will be used to repay bank borrowings amounting to RM3.3m and to defray the estimated listing expenses of RM3.3m. (BTimes)

Market Update

The FBM KLCI might open higher today as US stocks advanced on Friday after the Federal Reserve’s preferred measure of inflation fell to its lowest level since the start of the coronavirus pandemic, lowering the chances of another interest rate rise in September. Wall Street’s benchmark S&P 500 finished 1% higher on the day, and added 1% over five sessions for its third straight week of gains. The tech-heavy Nasdaq Composite had its best day since late May with a 1.9% increase, and gained 2% for the week. Friday’s moves came after the US personal consumption expenditures rose at an annualised pace of 3% in June, down from 3.8% in May. That was the index’s lowest level since March 2021 and also in line with economists’ expectations. European stocks had a more muted session, although Germany’s market edged to a record high even after data showing the region’s biggest economy stagnated in the second quarter, in the latest evidence of a broader slowdown across the Eurozone. The Dax index climbed 0.4%, while the region-wide Stoxx Europe 600 lost 0.2%, having hit its highest level in more than a year the previous day

Back home, Bursa Malaysia snapped a six-day rally to end lower on Friday, due to profit-taking activities. At the closing bell, the FBM KLCI had slipped by 0.92 of a point to 1,450.35, from 1,451.27 at Thursday’s close. The regional markets finished mixed with the Shanghai Composite gained 1.84% and the Hang Seng rose 1.41%. The Nikkei 225 lost 0.40%.

Source: PublicInvest Research - 31 Jul 2023