Economy

US: Job openings decline to 8.83m, lowest since early 2021. US job openings fell in July by more than expected to a more than two year low, offering fresh evidence that labour demand is cooling. The number of available positions decreased to 8.83 million from 9.17 million in June, the Bureau of Labour Statistics’ Job Openings and Labour Turnover Survey, or JOLTS. It marked the sixth decline in the last seven months. The so-called quits rate, which measures voluntary job leavers as a share of total employment, dropped to 2.3%, the lowest since the start of 2021. (Bloomberg)

US: Consumer confidence slumps much more than expected in Aug. Consumer confidence in the US deteriorated by much more than anticipated in the month of Aug. The consumer confidence index tumbled to 106.1 in Aug from a downwardly revised 114.0 in July. Economists had expected the consumer confidence index to edge down to 116.5 from the 117.0 originally reported for the previous month. Write-in responses showed that consumers were once again preoccupied with rising prices in general, and for groceries and gasoline in particular. (RTT)

EU: German consumer confidence set to weaken in Sept. Consumer sentiment in Germany is set to erode in Sept as both income and economic expectations of households weakened, further confirming the view that private consumption is unlikely to make any positive contribution to GDP this year. The forward looking consumer confidence index fell to -25.5 for Sept from a revised -24.6 in Aug. (RTT)

China: Banks to cut rates on mortgages, deposits in stimulus push. China’s largest banks are preparing to cut interest rates on existing mortgages and deposits, the latest state-directed measures to shore up growth in the world’s second-largest economy. An announcement that big state-owned lenders are reducing rates on the majority of the nation’s CNY38.6trn (USD5.3trn) of outstanding mortgages may come as soon as 5 Sept. The reductions will only affect loans on first homes. (Bloomberg)

Japan: Jobless rate rises to 2.7% in July. The unemployment rate in Japan came in at a seasonally adjusted 2.7% in July. That exceeded expectations for 2.5%, which would have been unchanged from the June reading. The jobs-to-applicant ratio ticked down to 1.29, shy of forecasts for 1.30, which again would have been unchanged. The participation rate was 63.1%, matching forecasts and steady from the June level. (RTT)

Singapore: Producer prices fall further. Singapore's producer prices decreased for the sixth straight month in July, largely due to a slump in the oil index. The manufacturing producer price index fell 7.6% YoY in July, slower than the 9.1% fall in the prior month. The oil index plunged 32.9% annually in July, and the non-oil index showed a comparatively smaller decrease of 4.6%. Domestic supply prices were 8.6% lower in July than a year ago, after a 14.3% slump in June. On a monthly basis, producer prices edged up 0.1% in July versus a 0.6% rise in the previous month. (RTT)

Markets

Press Metal: Eyes opportunities amid manufacturing shifts. Press Metal Aluminium Holdings sees numerous opportunities arising from potential manufacturing relocation activities driven by geopolitical tension or decentralisation due to lockdown risks. “Our investment in an alumina refinery in Indonesia has yielded positive results and we continue to envisage steady contribution from this inorganic growth venture,” said group CEO Tan Sri Paul Koon. He added that the group is actively pursuing growth opportunities while maintaining financial resilience. (StarBiz)

Supermax: Meaningful glove market recovery likely in late 2024 as it posts RM150m losses for FY2023. Supermax Corp Bhd posted an annual net loss of RM149.45m for its financial year ended June 30, 2023 (FY2023), against an annual net profit of RM718.91m in FY2022, as earnings were weighed by lower sales and average selling price (ASP) for gloves, amid persistent oversupply in the market. The group’s earnings were also hit by the loss of sales due to the Withhold Release Order (WRO) imposed by the US Customs and Borders Protection in October 2021, which remains in place, as well as increased operating costs amid higher utility costs. (The Edge)

Capital A: Quarterly net profit rises above RM1bn for first time in over five years. Capital A posted a net profit of RM1.12bn for the second quarter ended June 30, 2023 (2QFY2023), compared with a net loss of RM931.22m a year earlier, thanks to the strong recovery in demand from both domestic and international travel. The last time Capital A achieved a net profit of more than RM1bn was in 1QFY2018, when it reported RM1.14bn. This is the group's third straight quarterly profit and in line with the improvement in overall performance of its aviation segment. (The Edge)

Pecca: Logs third consecutive year of record profit in FY2023 on brisk car sales. Pecca Group posted a record annual profit of RM35.4m in the financial year ended June 30, 2023 (FY2023), surpassing its previous record annual net profit of RM22.85m in FY2022. The strong earnings were bolstered by higher sales of car seat covers and improved operational efficiency. Its earnings per share expanded to 4.71 sen in FY2023, from 3.07 sen per share previously. The record net profit was on the back of a 34.5% growth in annual revenue to RM221.26m, against RM164.39m in FY2022. (The Edge)

Ireka partners E&H Energy to supply LNG across Malaysia. Ireka Corp’s wholly owned subsidiary Shoraka Power SB (SPSB) has entered into an unincorporated joint venture agreement with E&H Energy SB to supply liquefied natural gas (LNG) to potential buyers and users across Malaysia. Ireka said the partnership comes at a time when the Energy Commission of Malaysia has signalled the liberalisation of the domestic energy sector. (The Edge)

Leong Hup: 2Q net profit up 61% on the back of record revenue. Leong Hup International (LHI) posted a 60.58% increase in its net profit to RM65.03m for the second quarter ended June 30, 2023 (2QFY2023), from RM40.5m a year earlier, on the back of record revenue due to higher sales volume and selling prices of its poultry products. Earnings per share rose to 1.78 sen from 1.11 sen, Quarterly revenue grew 6.23% to RM2.41bn — the highest since the group was listed on Bursa Malaysia in 2019 — from RM2.27bn in 2QFY2022, contributed by stronger performance in both the livestock and poultry segment and feed mill segment. (The Edge)

Market Update

The FBM KLCI might open higher today as the S&P 500 had its biggest one-day gain in almost three months and Treasury yields dropped on Tuesday as traders bet data showing signs of a slowdown in the labour market would ease pressure on the Federal Reserve to further raise interest rates this year. Wall Street’s benchmark index closed 1.5% higher, the third successive session of gains for the gauge and its biggest daily climb since early June, propelled by a rally in megacap tech stocks. The tech-focused Nasdaq Composite rose 1.7%, its largest one-day increase in a month. The moves came as US labour market data showed that the number of new job openings fell to 8.827mn in July, landing well below analysts’ forecasts and hitting the lowest level in more than two years. The job quits rate declined to its lowest level in 30 months, an indication that workers are seeing fewer attractive opportunities in the job market. In Europe, the region-wide Stoxx Europe 600 index closed 1% higher, while France’s CAC 40 advanced 0.7% and Germany’s Dax gained 0.9%.

Back home, Bursa Malaysia rebounded from Monday’s loss to close higher on Tuesday, amid a regional market performance lifted by hopes for more stimulus measures from China. At the closing bell, the FBM KLCI rose 10.38 points to 1,454.44 from 1,444.06 at Monday's close. In the region, Hong Kong’s Hang Seng index advanced 2% and the CSI 300 climbed 1%. China’s benchmark index had risen 1.2 % a day earlier, after much larger early gains melted away.

Source: PublicInvest Research - 30 Aug 2023