HEADLINES

Economy

US: Fed leaves rates unchanged, flags 'lack of further progress' on inflation. The US Federal Reserve held interest rates steady and signaled it is still leaning towards eventual reductions in borrowing costs, but put a red flag on recent disappointing inflation readings that could make those rate cuts a while in coming. Indeed, Fed Chair Jerome Powell said that after starting 2024 with three months of faster-than-expected price increases, it will take longer than previously expected for policymakers to become comfortable that inflation will resume the decline towards 2% that had cheered them through much of last year. (Reuters)

US: Job openings slide to three-year low as demand for labor gradually eases. US job openings fell to a three-year low in March, while the number of people quitting their jobs declined, signs of easing labor market conditions that over time could aid the Federal Reserve's fight against inflation. The JOLTS report from the Labor Department was tempered by other data showing a measure of prices paid by manufacturers for raw materials jumped to the highest level in nearly two years in April as commodity prices increased. Falling goods prices were the major driver of the moderation in inflation last year. With price pressures picking up in the first quarter, the surge in input costs is unwelcome news. (Reuters)

EU: Ireland jobless rate rises to 4.4%. Ireland's unemployment rate increased for the first time in three months in April, preliminary data from the Central Statistics Office showed. The seasonally adjusted unemployment rate rose to a three-month high of 4.4% in April from 4.1% in the prior month. In the corresponding month last year, the rate was also 4.1%. The seasonally adjusted number of unemployed increased to 124,200 in April from 115,400 in March. A year ago, it was 114,300. Ireland's youth unemployment rate, which applies to the 15-24 age groups, climbed to 10.6% from 9.2% a month ago. (RTT)

EU: Greece manufacturing growth remains strong. Greece's manufacturing activity signaled a further strong upturn in April amid a sustained rise in output and new orders, preliminary survey results from S&P Global showed. The PMI for the manufacturing sector dropped to 55.2 in April from 56.9 in March. However, a reading above 50 suggests growth in the sector. Although the lowest for three months, the latest reading signaled a strong improvement in the health of the Greek manufacturing sector. (RTT)

UK: Manufacturing activity slips into contraction. The UK manufacturing activity slid into contraction at the start of the second quarter as improvement in output and new orders were short-lived amid uncertain market conditions, client destocking and supply chain disruptions. The S&P Global final manufacturing PMI fell to 49.1 in April from a 20-month high of 50.3 in March, survey results showed. The score was above the flash estimate of 48.7. (RTT)

Japan: BOJ’s hawkish whispers drowned out by rowdy yen selloff. The Bank of Japan's decision to keep policy unchanged last week gave yen bears plenty of sell cues, but largely overlooked in the stampede were signals the central bank could raise rates in several stages in years ahead, with a hike possible in autumn. The yen hit a fresh 34-year low as markets focused on the BOJ's decision to keep interest rates around zero and a lack of signals from Governor Kazuo Ueda that the currency's falls may quicken the timing of the next rate hike. (Reuters)

South Korea: April trade surplus USD1.53bn. South Korea posted a merchandise trade surplus of USD1.53bn in April, the Customs Office said. That was shy of expectations for a surplus of 2.30bn and down sharply from the USD4.29bn surplus in March. Exports jumped 13.8% on year, exceeding forecasts for an increase of 13.5% and up from 3.1% in the previous month. Imports rose an annual 5.4% versus expectations for a gain of 6.0% after slumping 12.3% a month earlier. (RTT)

Markets

SEGi: Clement Hii buys out PE fund Navis Capital in SEGi for RM113m, triggers mandatory offer. SEG International’s (SEGi) group MD and major shareholder Tan Sri Clement Hii has bought out private equity firm Navis Capital Partners Ltd' 20.6% stake in SEGi for RM113m cash or 45 sen per share triggering a mandatory takeover offer for the remaining shares in the education group at the same price. Hii's EduEdge Equities SB, in which he is the sole director and shareholder, bought the stake that comprised 251.1m shares from Pinnacle Heritage Solutions SB, which is controlled by Navis Capital. (The Edge)

Duopharma: Bags RM578m contracts from MoH. Duopharma Biotech has secured contracts to supply pharmaceutical and nonpharmaceutical products to the MoH, with a total value of RM578.1m. The contracts were awarded to two subsidiaries, Duopharma (M) SB (DMSB) and Duopharma Manufacturing (Bangi) SB (DMfgB), who received and accepted seven and four letters of offer respectively. These contracts, facilitated through Pharmaniaga Logistics SB, are set to run until 31 Dec 2026. (The Malaysian Reserve)

Rohas: Sells loss-making assets for RM13m. Rohas Tecnic has disclosed the disposal of assets by its subsidiary, HG Power Transmission SB (HGPT), to Ann Joo Metal SB for RM12.8m in cash. The transaction involves the sale of the entire equity interest in IAC Electricals (M) SB (IACSB) and a piece of leasehold land with a factory and office in Batu Gajah, Perak. HGPT plans to utilise the proceeds to settle debts, repay borrowings, and boost working capital. The rationale behind the disposals is to divest a lossmaking subsidiary, allowing Rohas to focus on more profitable ventures within the group. (The Malaysian Reserve)

KSL: Acquires Johor land for RM212m. KSL Holdings is acquiring 183.3 acres of freehold land in Pulai, Johor from Tropicana Firstwide SB, Tropicana Rhythm Crest SB and Tropicana Desa Mentari SB for RM211.6m. KSL said the proposed acquisition will enlarge the current land bank of the group to enhance future revenue and earnings. KSL said the land will be used for residential development project and to further enhance its presence in the property market in Johor. (StarBiz)

GUH: Secures RM69.5m subcontract job from Gamuda. GUH Holdings said its construction division has secured an RM69.5m contract under the Sungai Rasau water supply scheme project from Gamuda. The contract involves the supply, delivery, installation, testing and commissioning, and maintenance of mechanical and electrical process, surface aeration system, destratification system, and algae control system for the intake and raw water pumping plant and ponds. The job is expected to be completed by 30 June 2025. (The. Edge)

Iqzan: To acquire 70% stake in construction firm. Iqzan Holding has entered into a conditional share sale agreement with Kacon Asset Group SB for the acquisition of 70% of Kacon Construction SB’s share capital by Cal-Test Laboratory SB a wholly owned subsidiary. The consideration of RM1m will be settled through the issuance of 5,000 redeemable convertible preference shares by Cal-Test to Kacon Asset Group. The rationale behind the acquisition is to expand Iqzan’s presence in the building and construction sector. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open lower today after US stocks swung to a mixed finish on Wednesday after the head of the Federal Reserve said the cuts to interest rates that Wall Street craves so much are still likely, even if they’re delayed because of stubbornly high inflation. The S&P 500 fell 17.30 points, or 0.3%, to 5,018.39 after the Fed held its main interest rate at its highest level since 2001, just as markets expected. The index had rallied as much as 1.2% in the afternoon before giving up all the gains at the end of trading. The Dow Jones Industrial Average rose 87.37, or 0.2%, to 37,903.29, and the Nasdaq composite lost 52.34, or 0.3%, to 15,605.48. Britain's FTSE 100 slipped on Wednesday, led by declines in energy stocks, while investors grew cautious ahead of the US Federal Reserve's policy decision later in the day, hoping for hints on its interest rate path. The blue-chip index closed down 0.3%, while the mid-cap FTSE 250 ended off 0.2%.

Back home, regional equities were mixed on Wednesday morning after US stocks finished their worst month since September ahead of a Federal Reserve interest rate announcement. Japan’s benchmark Topix index declined 0.5%. Semiconductor group Tokyo Electron Device was among the largest losers, shedding 11.5 %. South Korea’s Kospi index edged up 0.2%. The FBM KLCI and Hong Kong’s stock market were closed for the labour day holiday, while mainland Chinese markets are closed for the rest of the week.

Source: PublicInvest Research - 2 May 2024