Economy

US: Household debt largely unchanged in Q2, credit card balances jump. Americans borrowed more than ever on their credit cards in the last quarter, the New York Federal Reserve Bank said, with balances surpassing USD1trn for the first time even as overall household debt loads were largely unchanged. Credit card balances rose by USD45bn to USD1.03trn in the second quarter, the regional Fed bank said in its latest quarterly household debt and credit report, reflecting robust consumer spending as well as higher prices due to inflation, researchers said. Household debt ticked up 0.1% to USD17.06trn, as mortgage balances, the biggest portion, and typically the biggest driver, of overall household debt were largely unchanged. (Reuters)

US: Wholesale inventories revised lower in June. US wholesale inventories fell more than initially estimated in June, which could have implications for the second-quarter gross domestic product estimate. The Commerce Department said that wholesale inventories dropped 0.5% instead of falling 0.3% as previously reported last month. Stocks at wholesalers declined 0.4% in May. Economists polled by Reuters had expected that inventories would be unrevised. Inventories are a key part of gross domestic product. They increased 1.3% on a YoY basis in June. (Reuters)

EU: France trade gap at 22-month low. France's trade deficit narrowed to the lowest in nearly two years in June, the customs office reported. The trade deficit totalled EUR6.7bn in June, which was the lowest since August 2021. The shortfall dropped from EUR7.94bn in May. In the same period last year, the deficit was EUR14.5bn. Economists had forecast the trade deficit to widen to EUR8bn in June. Data showed that exports decreased 1.3% from May and imports posted a bigger fall of 3.2%. (RTT)

EU: Greece inflation rises to 2.5%. Greece's consumer price inflation increased in July after easing to a nearly two-year low in June, the Hellenic Statistical Authority said. The consumer price index climbed 2.5% YoY in July, following a 1.8% gain in June. Further, inflation accelerated for the first time in ten months. On a monthly basis, consumer prices dropped 1.1% in July versus a 0.6% rise in the previous month. This was the first decrease in six months. The rise in inflation was largely impacted by a 12.3% rise in food and non-alcoholic beverages. (RTT)

UK: Retail sales growth weakens in July. UK retail sales posted a slower growth in July due to bad weather, monthly data from the British Retail Consortium and KPMG showed. Total retail sales grew 1.5% on a yearly basis in July, slower than the 2.3% expansion in the same period last year. The pace of growth was weaker than the three-month average growth of 3.5% and the annual average growth of 3.9%. (RTT)

China: Exports log double-digit decline in July. China's exports logged another sharper-than-expected double digit decline in July as monetary policy tightening damped demand from major trading partners, official data showed. Shipments declined 14.5% in July from a year ago, following June's 12.4% fall, the General Administration of Customs reported. The pace of decrease also exceeded economists' forecast of 12.5% drop. (RTT)

Indonesia: Consumer confidence at 4-month low. Indonesian consumers expressed a slightly less positive attitude in July, survey data from the Bank of Indonesia showed. The consumer confidence index dropped to a 4-month low of 123.5 in July from 127.7 in the previous month. However, a reading above 100 indicates optimism among households. The current economic condition index declined by 3.0 points to 113.8 in July. (RTT)

Taiwan: Trade surplus grows in July. Taiwan's foreign trade surplus increased in July from a year ago as imports fell faster than exports, preliminary figures from the Ministry of Finance revealed. The trade surplus climbed to USD8.48bn in July from USD4.99bn in the corresponding month last year. The surplus also grew from USD5.9bn in June. Exports fell 10.4% YoY in July, which was much slower than the 23.4% plunge in the prior month. Economists had forecast a 20.1% fall. Shipments of plastic and rubber and related articles declined the most, by 28.8% annually in July, and those of base metals and articles of base metal slid by 28.1%. (RTT)

Markets

KLCC Property: Denies eyeing stake in Dubai office tower. KLCC Property Holdings (KLCCP) has denied a Bloomberg news article listing it as a potential buyer of a stake in an office tower in Dubai's financial district. The news wire agency report dated Aug 2, 2023 said KLCCP were among potential bidders for an interest in the office tower, quoting people with knowledge of the matter. Its owners, Brookfield Asset Management and state-owned Investment Corp. of Dubai, may sell a stake of as much as 49% in ICD Brookfield Place, whose tenants include JPM and BoA Corp. (New Straits Times)

Sunview: Secures 59.98 MW quota under CGPP. Sunview Group has secured a quota totaling 59.98 MW under the Corporate Green Power Programme (CGPP), an initiative by the Energy Commission (EC). Its subsidiary, Solarcity REIT SB, has been allocated an export capacity of 29.99 MW, which is the maximum quantum assigned to a solar power producer. (StarBiz)

Barakah: PBJV lands contract from Brunei Shell Petroleum. Barakah Offshore Petroleum’s wholly-owned subsidiary PBJV Group SB has bagged a contract from Brunei Shell Petroleum Co SB for the SPM2 replacement project at an undisclosed value. PBJV received the letter of award from Brunei Shell Petroleum, whereby the main contract scope is to supply engineering work, supply of materials, fabrication, load-out, decommission, installation and commissioning of one unit SPM2 (Single Point Mooring Buoy) at the shoreline of Brunei Darussalam. (The Edge)

Hengyuan: Names Zulhazmi Mohamad as acting CEO. Hengyuan Refining Co (HRC) has appointed Zulhazmi Mohamad as acting CEO effective Aug 8. He will undertake all duties and responsibilities from Li Bin, 59, who relinquished his position due to health reasons. Zulhazmi, 52, joined HRC in 1994 and has held multiple jobs in projects and turnaround, engineering, and maintenance over the last 25 years, including a regional turnaround role. (StarBiz)

Bioalpha: Founder Hon Tian Kok ceases to be substantial shareholder in BTM Resources. Bioalpha Holdings’s founder, CEO and managing director Hon Tian Kok @ William has ceased to be a substantial shareholder in BTM Resources after disposing of 35.51m shares or a 2.83% stake. The disposal has pared Hon’s shareholding in the timber firm to 4.78% from 7.61% previously. (The Edge)

Pestech: Director retracts resignation. Pestech International's executive director Lim Peir Shenq has retracted his letter of resignation on Monday after it was announced on Bursa Malaysia. The company announced on the local bourse that Lim had let go of his post, to pursue other interests. Lim Peir Shenq is the son of executive chairman and substantial shareholder Lim Ah Hock and the cousin of Paul Lim Pay Chuan, the managing director and group chief executive officer of the company. (The Edge)

Pertama Digital: Seeks 12-month extension for regularisation plan submission. Pertama Digital has applied for a one-year extension until Aug 9, 2024 to present its regularisation plan to the relevant regulatory bodies. Pertama Digital, previously known as Sinotop Holdings, triggered paragraph 8.03A of the Main Market Listing Requirements on Aug 10 last year, classifying it as an affected listed issuer. (FMT)

Market Update

The FBM KLCI might open lower today as US equities retreated on Tuesday, dragged lower by bank stocks after Moody’s cut the credit rating of several midsized lenders and warned that higher costs could cut into their profitability. Wall Street’s benchmark S&P 500 fell 0.4%, while the Nasdaq Composite shed 0.8%. Banks were among the biggest decliners after the ratings of 10 midsized US lenders were cut on Monday night, with Moody’s citing a slowdown in deposits, higher funding costs and asset quality risks, particularly in the commercial real estate sector. Financial stocks were also lower in Europe after Italy’s deputy prime minister announced a 40 % windfall tax on banks that have recently profited from rising interest rates. The region-wide Stoxx Europe 600 index ended the day 0.2% lower, with the Stoxx Europe 600 Banks index down 2.7%. The Cac 40 in Paris lost 0.7% and the Dax in Frankfurt fell 1.1%.

Back home, Bursa Malaysia closed higher on Tuesday amid a mixed performance by regional peers as local market sentiment recovered with buying support seen in heavyweights, mainly banking stocks.At the closing bell, the FTSE Bursa Malaysia KLCI gained 5.19 points to end the day at 1,451 from 1,445.81 at Monday’s close. The regional markets were lower after data showed China’s exports fell by the most since the beginning of the Covid-19 pandemic, amplifying concerns over the country’s economic growth. Hong Kong’s Hang Seng index dropped 1.8%, led by declines in consumer goods and property, while China’s benchmark CSI 300 was down 0.3%. Official data showed China’s exports declined 14.5% year on year in July, the most since February 2020. The country’s imports fell 12.4%, much higher than the 5% decline forecast in a Reuters poll of economists.

Source: PublicInvest Research - 9 Aug 2023