Economy

Global: Household wealth drops for first time since 2008 financial crisis. Global household wealth fell last year for the first time since the financial crisis in 2008, as inflation and the appreciation of the US dollar wiped some USD11.3trn (RM52.4trn) off assets. Total net private wealth across the world decreased by 2.4% to a total of USD454.4trn, according to Credit Suisse’s annual global wealth report published. (Bloomberg)

US: Retail sales increased more than expected in July. US retail sales increased more than expected in July as Americans boosted online purchases and dined out more, suggesting the economy continued to expand early in 3Q and keeping a recession at bay. Retail sales jumped 0.7% last month, the Commerce Department said. Data for June was revised higher to show sales rising 0.3% instead of the previously reported 0.2%. Economists polled by Reuters had forecast retail sales would climb 0.4%. Retail sales are mostly goods and are not adjusted for inflation. (Reuters)

UK: Basic wage growth hits record, adding to BoE’s worries. Basic wages in Britain surged to hit a new record growth rate, figures showed, adding to worries for the BoE about long-term inflation pressures even after 14 back-to-back increases in interest rates. Official data showed some fresh signs of cooling in the jobs market with the unemployment rate unexpectedly rising to 4.2% from 4.0%, the highest since the three months to Oct 2021. (Reuters)

China: Cuts key rates as weak batch of July data darkens economic outlook. A broad array of Chinese data highlighted intensifying pressure on the economy from multiple fronts, prompting Beijing to cut key policy rates to shore up activity but analysts say more support is needed to revitalise growth. Less than an hour before the release of a batch of July data, China's central bank unexpectedly cut key policy rates for the second time in three months, underlining the rapid loss of the post-Covid economic rebound that has shaken global financial markets. (Reuters)

Japan: 2Q GDP beats forecasts as exports zoom. Japan's economy grew much faster than expected in April-June, as brisk auto exports and tourist arrivals helped offset the drag from a slowing post-Covid consumer recovery, although global recession prospects cloud the outlook. The 6.0% annualised growth in Japan's economy translated into a quarterly gain of 1.5%, much bigger than median estimates of 0.8% in a Reuters poll and bringing GDP to a record high. (Reuters)

Australia: Central bank sees ‘credible path’ to inflation target at 4.1% rate. Australia’s central bank sees a “credible path” to return inflation to its 2% to 3% target with interest rates at their current level, minutes of its Aug 1 meeting showed, suggesting a higher hurdle to further tightening. The Reserve Bank of Australia (RBA) debated raising the cash rate but decided to stand pat based on the view that its four ppts of cumulative hikes are slowing the economy, the minutes showed. (Bloomberg)

Indonesia: July trade surplus narrows more than expected. Indonesia's trade surplus shrank more than expected in July to USD1.31bn (RM6bn), as imports contracted less than predicted, data from the statistics bureau showed. A Reuters poll of economists had expected a July surplus of USD2.53bn. Trade surplus in the previous month was USD3.46bn. (Reuters)

Markets

Reservoir Link (Neutral, TP: RM0.39): Wins six solar jobs. Reservoir Link Energy has secured six new solar contracts between June and August this year with a collective total value of RM6.59m. The company said it will apply its expertise and experience in solar renewable energy to deliver the engineering procurement, construction and commissioning contracts. This includes solar facility earthing works that are located in Selangor, Johor and Penang. (BTimes)

UCrest: Partners Hangsukeji in AI 3D printing venture. Ucrest has entered into a collaboration with Hangsukeji to jointly develop an artificial intelligence (AI) 3D printing business for the healthcare market and manufacturing industry. UCrest, a provider of advanced Cloud hospital and mobile health services, said the AI 3D products will carry its brand and it will develop the market outside of China while Hangsukeji will market the products, materials and services in China. (StarBiz)

Inta Bina: Wins RM206m apartment job. Inta Bina Group has secured a letter of award to develop two serviced apartments in Bangi, Selangor, for RM206m. Inta Bina said the contract will involve works for Phase 1 and 2 of M Sinar @ Southville City. The company said Phase 1 will consist of 500 units of a 33-storey serviced apartment, while Phase 2 will comprise 499 units of a 33- storey serviced apartment. (StarBiz)

HSS Engineers: Consortium undertakes 29.99MW solar power plant project. HSS Engineers and its consortium partners have accepted an award from the Energy Commission to develop a photovoltaic (PV) plant with an export capacity of 29.99MW in Kuala Muda, Kedah. The consortium, comprising HSS Engineering SB, Shizen Malaysia SB, Solarvest Asset Management SB and Aziho Trading SB, has undertaken the project to provide opportunities for business entities to participate in the promotion and use of renewable energy in their business operations. (StarBiz)

Farm Fresh: Abrdn emerges as fifth largest shareholder after big drop in share price. Abrdn plc (formerly known as Aberdeen Asset Management plc) has emerged as Farm Fresh’s substantial shareholder after the purchase of 93.84m shares or a 5.013% stake. Abrdn is the fifth largest shareholder in the home-based dairy company. The transaction price of the block of shares on Aug 10 was not disclosed in Farm Fresh’s bourse filing. However, based on the closing price of RM1.19 on Aug 10, the share purchases would have cost Abrdn RM111.67m. (The Edge)

Meta Bright: Partners Prominent Synergy on energy efficiency projects. Meta Bright Group has entered into a strategic alliance with Prominent Synergy SB to focus on potential collaborations on mutually beneficial energy efficiency (EE) projects. In a statement, Meta Bright, a sustainable energy solutions provider, said Prominent Synergy will provide technical consultation and expertise in EE projects as it is active in facilities maintenance, civil and structural and energy efficiency-related works. (StarBiz)

Coraza: Buys factories for RM18m. Coraza Integrated Technology’s wholly-owned subsidiary, Coraza Systems Malaysia SB, is acquiring 8,538sqm of freehold industrial land with offices and factories in Nibong Tebal, Penang, from Huhtamaki Foodservice Malaysia SB for RM17.69m. (StarBiz)

MARKET UPDATE

The FBM KLCI might open lower today after Wall Street stocks sank to a five-week low, and longer-term Treasury yields hit their highest level this year, as strong retail sales data stirred concerns that US interest rates could remain higher for longer. Wall Street’s benchmark S&P 500 closed down 1.2% at its lowest level since mid-July. The technology-focused Nasdaq Composite dropped 1.1%. The yield on the 10-year US Treasury, which is more sensitive to expectations for economic growth, rose 0.04 percentage points to 4.22%, its highest level since November 2022. The yield on the two-year government note fell 0.02 percentage points to 4.95%. The Europe-wide Stoxx Europe 600 fell 0.9% to its lowest level since July 11, with the Cac 40 in Paris ending the day down 1.1%. The FTSE 100 was the biggest faller in Europe, down 1.6%, after UK wage growth hit a record annual pace in the three months to June, adding to signs of persistent inflationary pressures.

Back home, Bursa Malaysia maintained its positive momentum to close higher on Tuesday, supported by persistent buying in selected financial services and utilities counters amid mixed sentiments on the regional stock markets. At the closing bell, the FBM KLCI rose 3.28 points to 1,460.28 from 1,457 at Monday’s (Aug 14) close. Elsewhere in the region, China’s benchmark CSI 300 index of Shanghai- and Shenzhen-listed stocks fell 0.2%, while Hong Kong’s Hang Seng declined 1%.

Source: PublicInvest Research - 16 Aug 2023