Economy

US: Consumer price growth accelerates in line with estimates in July. Consumer price growth in the US accelerated in line with economist estimates in the month of July. The annual rate of consumer price growth increased to 3.3% in July from 3.0% in June. The faster growth matched expectations. The reading on inflation, which is said to be preferred by the Federal Reserve, also showed consumer prices rose 0.2% on a monthly basis in July, matching the uptick in June as well as economist estimates. The report also said the annual rate of growth by core consumer prices, which exclude food and energy prices, inched up to 4.2% in July from 4.1% in June. (RTT)

US: Weekly jobless claims unexpectedly edge slightly lower. With the more closely watched monthly jobs report looming there is a slight decrease in first-time claims for U.S. unemployment benefits in the week ended Aug 26. The report said initial jobless claims edged down to 228,000, a decrease of 4,000 from the previous week's revised level of 232,000. Economists had expected jobless claims to inch up to 235,000 from the 230,000 originally reported for the previous week. (RTT)

EU: German unemployment rises sharply amid weak economic activity. Germany's unemployment rose more than expected in Aug as the ongoing weakness in the economic activity weighed on job creation. The monthly increase in the number of unemployed rose sharply to 18,000 from 1,000 in July. Economists had forecast a more moderate increase of 10,000. Unemployment totalled 2.63m. However, the unemployment rate held steady at 5.7% in Aug, as expected. The summer break and the weak economy are leaving their mark on the labour market. Nonetheless, the labour market is in solid condition. (RTT)

EU: Eurozone inflation steadies at 5.3%; unemployment rate at record low. Eurozone inflation ceased to slow in Aug on energy prices but underlying inflation eased due to the slowdown in goods and services price growth. The unemployment rate in the currency bloc held steady at a record low in July suggesting that wage growth is set to remain strong. EU harmonized inflation remained unchanged at 5.3% in Aug, while the rate was forecast to slow to 5.1%. The 5.3% was the lowest since Jan 2022. Excluding energy, food, alcohol and tobacco, core inflation slowed to 5.3%, in line with expectations, from 5.5% a month ago. (RTT)

China: Manufacturing sector continues to shrink. China's manufacturing sector continued to contract in Aug and the growth in non-manufacturing activity weakened further. The factory PMI advanced to 49.7 from 49.3 in July. The score was also above economists' forecast of 49.4. However, a reading below 50.0 indicates contraction. The manufacturing sector has remained in the negative territory over the past five months. (RTT)

Japan: Housing starts fall for second month. Japan's housing starts decreased for the second straight month in July, and at a faster-than-expected pace. Housing starts dropped 6.7% YoY in July, following a 4.8% decline in June. Meanwhile, economists had expected only a 0.8% fall. Data showed that new construction was contracted in the owned and built for scale categories. The seasonally adjusted annualized number of housing starts declined to 778,000 in July from 811,000 in the previous month. (RTT)

India: GDP growth climbs to 7.8% in June quarter. India's economy grew at a faster pace in the three months to June period, mainly led by the services sector. GDP grew 7.8% YoY in the April to June quarter, which was a tad faster than the 7.7% expansion economists had forecast. In the same quarter last year, growth was 13.1%. The Indian economy had grown 6.1% in the March quarter. Among industrial sectors, finance, real estate and professional services industry logged the biggest growth of 12.2%. (RTT)

Markets

Sunview: Plans private placement to fund EPCC projects, posts higher earnings. Sunview Group Bhd has planned a private placement to raise an estimated RM39.31m to fund its engineering, procurement, construction and commissioning (EPCC) projects. The placement entails the issuance of up to 46.8m new shares — representing 10% of Sunview’s issued shares — to independent investors at an issue price to be determined later. (The Edge)

Ekovest: To raise RM117m for RTS Link project via share placement. Ekovest Bhd has proposed to undertake a private placement of up to 10% of its issued shares to strategic and/or institutional investors to raise up to RM117.27m — mainly to fund the construction cost of the Rapid Transit System (RTS) Link project. As of Aug 21, Ekovest’s issued share capital stood at RM1.14bn comprising 2.7bn shares. (The Edge)

Westports: Cabinet agrees to expansion plan to increase capacity to 27m TEUs. The Cabinet has agreed to Westports Holdings’ proposed expansion plan for its port, the company said in a filing to the local stock exchange on Wednesday. Westports said its wholly owned Westports Malaysia SB (WMSB) had received a letter from the Port Klang Authority (PKA) saying that the company’s proposed expansion of its container terminals (CT) 10 to 17 had been presented to the Cabinet on July 25. However, the expansion was only approved for container terminals 10-17, instead of 10-19, the group said. (The Edge)

Coastal Contracts: Reports first quarterly net loss in more than two years. Coastal Contracts on reported a net loss of RM49.59m for the fourth quarter ended June 30, 2023 (4QFY2023), compared with a net profit of RM104.41m a year earlier. This is the group's first quarterly net loss since 2QFY2021, when it slipped into the red to the tune of RM1.52m. The group attributed the latest loss to the share of loss from a joint venture of RM66.6m and a loss on disposal of effective interest in a joint venture of RM155.3m, as a result of the completion of a 50% share transfer in the joint venture on June 29. (The Edge)

Malayan Flourmls: Posts first quarterly net loss in three years. Malayan Flourmls Bhd posted a net loss of RM1.97m in the second quarter ended June 30, 2023 (2QFY2023), compared with a net profit of RM31.65m a year earlier, due to lower profit contributions from the flour and grain trading segment and equity accounted joint ventures. This is the group's first loss in three years, after reporting a net loss of RM4.48m in 2QFY2020. (The Edge)

MRCB: 2Q net profit down 23% on lower engineering and construction revenue. Malaysian Resources Corp Bhd’s (MRCB) net profit fell 22.93% to RM10.87m or 0.24 sen for the second quarter ended June 30, 2023 (2QFY2023), from RM14.1m or 0.32 sen a year earlier. Quarterly revenue decreased 14.43% to RM599.35m from RM700.39m. MRCB said the lower earnings were due to much lower revenue contribution from its engineering, construction and environment division due to the completion of three major infrastructure construction projects last year, and the completion of two major property development projects from its property development and investment division in the first half of 2023. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today as US stocks were mixed on Thursday, but notched their first monthly drop since February despite solid economic data feeding hopes that the Federal Reserve will probably refrain from raising interest rates again this year. Wall Street’s benchmark S&P 500 gave up its earlier gains to close 0.2% lower, bringing its loss for the month to 1.8%. The Nasdaq Composite, which is dominated by fast-growing tech stocks that are particularly vulnerable to higher interest rates, added 0.1%. However, it was the index’s worst month since December. The region-wide Stoxx Europe 600 index lost momentum from earlier in the day to close down 0.2%, while France’s CAC 40 fell about two-thirds of 1% and London’s FTSE declined 0.5%. However, the region’s financial stocks were boosted by news that UBS reported the largest-ever quarterly profit for a bank. Its shares rose 6.1%, while the Stoxx 600 Europe Financial Services index rose 1.5%. Chinese stocks were led lower by a weak property sector on Thursday, after Country Garden, once the country’s largest private developer by sales, reported record losses. China’s CSI 300 and Hong Kong’s Hang Seng both fell 0.6%. The CSI 300 Real Estate index, which tracks property stocks listed on mainland exchanges, declined 5.3%. Hong Kong’s Hang Seng Mainland Properties index lost 1.9%, erasing early gains.

Source: PublicInvest Research - 1 Sept 2023