HEADLINES

Economy

US: Fed policymakers still cautious on inflation and policy. Fed officials are not ready to say inflation is heading to the central bank's 2% target after data showed a welcome easing in consumer price pressures in April, with several calling for continued policy caution. (Reuters)

EU: Italy construction output falls 1.9%. Italy's construction output decreased for the second straight month in March, according to the provisional data released by the statistical office Istat. Construction production declined 1.9% MoM in March, though slower than the 3.0% decrease in the previous month. The annual growth in construction output moderated a 10-month low of 3.8% in March from 7.4% a month ago. (RTT)

China: Fiscal revenue shrank 2.7% in Jan-April amid shaky economic recovery. China's fiscal revenue slipped 2.7% in the first four months of 2024 from a year earlier, after a 2.3% slide in the Jan-March period, in a further sign of an uneven economic recovery. Fiscal expenditure rose 3.5% in the first four months, versus a 2.9% gain in 1Q. For April alone, fiscal revenue fell 3.7% against a 2.4% decline in March, while fiscal spending was up 6.1%, compared with March's 2.9% fall. (Reuters)

Japan: Manufacturers want BOJ to keep yen stable. Japan's large manufacturers saw exchange rate stability as the biggest factor they wanted out of the central bank's monetary policy, a BOJ survey showed. Roughly 70% of firms polled said they experienced drawbacks from the BOJ's 25-year-long monetary easing measures including a weak yen that pushed up import costs. About 90% of the total also saw benefits from the BOJ's prolonged easing such as low borrowing costs. (Reuters)

Indonesia: Lowers 2025 GDP growth expectation to 5.1%- 5.5%. Indonesia's government expects economic growth in 2025 to be within a range of 5.1% to 5.5%, Finance Minister Sri Mulyani Indrawati told parliament, slightly below a previous forecast range of 5.3% to 5.6%. The growth outlook, along with predictions on bond yields and rupiah exchange rate, were discussed as the basis of the government's 2025 budget. (Reuters)

Thailand: GDP growth exceeds expectations. Thailand's economy grew more than expected in 1Q, driven by household consumption and growth in tourist arrivals. GDP grew at a slower pace of 1.5% on a yearly basis, which was slower than the 1.7% expansion in the preceding quarter, the National Economic and Social Development Council reported. However, this was faster than economists' forecast of 0.8%. QoQ, the economy expanded 1.1%, reversing a 0.4% fall in 4Q. (RTT).

Markets

MAHB: Passenger traffic rises 7.6% to 11m in April 2024. Malaysia Airports Holdings (MAHB) April 2024 traffic expanded by 7.6% to 11m passengers compared to the preceding month's 10.2m passengers movement. The airport operator reported a total traffic performance of 7.6m passengers across its local airports in Malaysia during the month, an eight per cent increase compared to March's 7.1m. (Bernama)

Coastal Contracts: Bags vessel sale, five-year charter extension. Coastal Contracts has secured the sale of an offshore support vessel (OSV) and a charter extension for a separate vessel. According to a bourse filing on Monday, the group’s wholly owned unit Coastal International Marine Inc secured the contract for the OSV sale, while Pleasant Engineering Sdn Bhd secured the charter contract extension. The charter extension is for a period of five years, while no further details were disclosed pertaining to the OSV sale. (The Edge)

Sunview: Teams up with Yashil Energiya to explore RE projects in Uzbekistan. Sunview Group Bhd announced that its wholly-owned subsidiary, Fabulous Sunview SB, has entered into a strategic business alliance agreement with LLC Yashil Energiya to explore business opportunities in renewable energy (RE) and green energy-related projects in Uzbekistan. Under the agreement, Sunview will be the investor and engineering, procurement, construction, and commissioning provider for the projects, while Yashil Energiya will act as the purchaser for the electricity generated from the projects. (Bernama)

Opensys: To cultivate new revenue streams alongside core biz expansions. Opensys will prioritise cultivating new revenue streams, alongside expanding core operations. The financial services solutions provider said strategic initiatives such as SmartCIT, Branch Of The Future solutions, the buySolar online marketplace and merchant acquiring services are geared towards enhancing both top-line and bottom-line performance. (The Star)

Batu Kawan: Net profit eases to RM84.7m in 2Q. Batu Kawan posted a lower net profit of RM84.7m in the second quarter ended 31 March, 2024 (2Q 2024) from RM120.05m in the same quarter last year. Revenue also dipped to RM5.66bn from RM6.31bn previously, the group said. Its pre-tax profit for the current quarter was 20.6% lower at RM271.37m from RM341.95m in 2Q 2023 on the back of a lower revenue of RM5.66bn from RM6.31bn in the same period. (The Star)

Sunway Construction: 1Q net profit surges 16.4% on new projects. Sunway Construction Group (SunCon) recorded a 16.4%YoY increase in net profit for the first quarter of 2024, reaching RM32.4m, attributed to higher billings from newer projects. Revenue rose by 15.8% to RM604.8m compared to the same period last year. Group managing director Liew Kok Wing expressed optimism for FY2024 growth, supported by a robust outstanding order book of RM6.3bn. SunCon is actively pursuing opportunities in advanced technology facilities construction, including data centers and semiconductor manufacturing facilities. Notably, the company secured contracts totaling RM808m in the current quarter for data center projects. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open with a positive bias today after most US stock indices edged higher after a quiet day of mixed trading Monday following their latest winning week. The S&P 500 rose 4.86 points, or 0.1%, to 5,308.13 and pulled within 0.02 point of its record set last week. The Nasdaq composite gained 108.91, or 0.7%, to 16,794.87 to set its own all-time high. The Dow Jones Industrial Average was the laggard. It slipped 196.82 points, or 0.5%, to 39,806.77 in its first trading after closing above the 40,000 level for the first time on Friday. This upcoming week has few top-tier economic reports, like last week’s headliner that showed inflation may finally be heading back in the right direction following a discouraging start to the year. In stock markets abroad, indices were modestly higher across much of Asia and Europe. Back home, shares on Bursa Malaysia broke through the 1,620-point resistance level as funds poured in, lifting the key index to its highest since March 2021. At the closing bell, the FBM KLCI bagged 10.88 points, or 0.67 per cent, to 1,627.50 compared to Friday’s close of 1,616.62.

Source: PublicInvest Research - 21 May 2024