Economy

US: Consumer sentiment drops slightly less than previously estimated in May. Consumer sentiment in the US deteriorated slightly less than previously estimated in the month of May, according to revised data released by the University of Michigan. The report said the consumer sentiment index for May was upwardly revised to 69.1 from the preliminary reading of 67.4. Economists had expected the index to be unrevised. Despite the upward revision, the consumer sentiment index still fell sharply from 77.2 in April, slumping to its lowest level since hitting 61.3 last Nov. (RTT)

US: Durable goods orders unexpectedly increase in April. New orders for US manufactured durable goods unexpectedly increased in the month of April, according to a report released by the Commerce Department, although the growth came following a significantly downwardly revised jump in March. The report said durable goods orders climbed by 0.7% in April following a downwardly revised 0.8% advance in March. Economist had expected durable goods orders to decrease by 0.8% compared to the 2.6% surge originally reported for the previous month. (RTT)

EU: German economy expands slightly in 1QFY24. According to the Federal Statistical Office, the final estimate for Germany’s QoQ GDP report for 1QFY24 revealed that GDP grew by 0.2%. This was a surge from the previous quarter’s -0.5% and in line with analyst estimates. This increase was mainly due to a jump in gross fixed capital formation, which rose to 1.2% in the 1QFY24, from - 2.1% in 4QFY23, primarily driven by advances in construction investment. YoY GDP came in at -0.2% in 1QFY24, which was the same as the previous quarter, as well as in line with market expectations. (Euronews)

UK: Retail sales fell more than expected during rainy spell. UK retail sales fell at the fastest pace this year, as consumers delayed spending due to rainy weather, underlying the hurdles facing the Conservative government’s bid for re-election. The volume of goods sold in stores and online plunged 2.3% in April, after a downwardly revised 0.2% decline the month before, the Office for National Statistics (ONS) said. That was much sharper than the 0.5% drop economists had expected. It was also the worst reading since Dec, when the UK economy had dipped into a recession. (Bloomberg)

China: Housing rescue has a poor track record in pilot cities. China’s big housing rescue aims to build on smaller efforts that are already under way and struggling to get traction. The People’s Bank of China this month unveiled USD42bn of funding to help local governments buy excess inventory from developers. Pilot programs on similar lines have been operating last year in eight cities, but they’ve had limited effect in stabilizing property markets, and apparently managed to deploy only a fraction of the allocated funds. The stakes in the new nationwide push are high. Beijing needs to end a real estate slump that’s left the economy dangerously dependent on exports just when trade wars are ramping up again before it spirals out of control, threatening the survival of premier developers like state-backed China Vanke Co. (Bloomberg)

Markets

Scientex: To acquire 37 land parcels in Penang for RM462.5m. Scientex’s wholly owned subsidiary, Scientex (Skudai) SB, has entered into a conditional sale and purchase agreement with Land Capacity SB to acquire 37 parcels of freehold land in Penang for RM462.5m. The proposed acquisition is expected to be completed in its entirety in the first half of next year. It is a strategic investment opportunity for the Scientex group to expand upon its track record of successful development in Penang to increase its earnings potential over the long term. (Bernama)

Silver Ridge: Bags RM169m contract for Melaka Cruise Terminal. Telecommunication services provider Silver Ridge Holdings’ unit has bagged a RM168.8m contract to construct and build Melaka International Cruise Terminal. It said its 51%-owned subsidiary, Total SR Web 3.0 SB, will handle the project running from 24 May 2024 to 23 Aug 2025. It said the contract included piling, superstructure works, and mechanical and engineering services for the construction of the terminal. (The Malaysian Reserve)

TRC Synergy: Bags RM142m subcontract to 'transform' state legislative building. Construction outfit TRC Synergy said it has secured a RM142.3m subcontract for the "proposed transformation" of a state legislative building. The group said its wholly owned subsidiary Trans Resources Corp SB was awarded the subcontract to undertake architectural, structural and civil works at the building by Performing Arts Centre Consortium SB. Details of the project, including the identity of the building, were not disclosed in TRC's filing to Bursa Malaysia. (The Edge)

MSM: Sues Generali Insurance for RM42.8m over rejected insurance claim. MSM Malaysia Holdings’ unit has initiated a suit against Generali Insurance Malaysia claiming RM42.8m in damages over a rejected insurance claim. The sugar refiner’s wholly owned subsidiary MSM Sugar Refinery (Johor) SB said that its insurance claim filed in 2022 for the loss of profit arising from a boiler failure was rejected by Generali Insurance. The unit’s insurance claim was made under its machinery breakdown insurance policy and machinery breakdown loss of profit insurance policy with Generali Insurance. (The Edge)

Aneka Jaringan: Bags RM22.5m subcontract from IJM construction. Aneka Jaringan Holdings has bagged a RM22.5m subcontract from IJM Construction SB to undertake bored piling works for the Figure 8 Interchange and Ibrahim International Business District in Johor. The company, which specialises in basement and foundation construction, said its wholly owned subsidiary Aneka Jaringan SB accepted the LOA from IJM Construction SB on 24 May 2024, for the works which come under the Johor Bahru-Singapore Rapid Transit System Link project. (Bernama)

Favelle Favco: To build two logistic warehouses in Australia. Favelle Favco said it is spending AUD39.8m (RM124m) to develop two units of single-storey logistic warehouses on its freehold land near Sydney, Australia. The crane manufacturer said it has entered into an agreement with Australian developer Dexus Property Services Pty Ltd, and Dexus Funds Management Ltd, for the construction as well as the construction financing and tenant sourcing. (The Edge)

MARKET UPDATE

US markets ended higher last Friday as the artificial intelligence (AI)-led rally continued to drive optimism in the market. Blockbuster earnings from sector darling Nvidia and bullish sentiment on other tech names powered the market higher despite lingering concerns that the US Federal Reserve is poised to keep interest rates higher for much longer than expected. The Nasdaq Composite gained 1.1% to close at a fresh record-high. The Dow Jones Industrial Average and S&P 500 rose 0.01% and 0.7%. European and Asian markets were mostly lower earlier in the day on rate-related concerns in the US. While the European Central Bank remains on course to cut interest rates in June, the Bank of England’s planned move has been thrown in doubt following release of the country’s inflation numbers. UK’s FTSE 100 and France’s CAC 40 slipped 0.3% and 0.1%. Germany’s DAX was largely unchanged (+2.05- pts) on the day. Hong Kong’s Hang Seng Index led Asian markets lower, falling 1.4%. South Korea’s KOSPI fell 1.3% on weakness in shares of Samsung Electronics following reports that its highbandwidth memory chips are not yet ready for use by US chipmaker Nvidia. Elsewhere, the Shanghai Composite Index and Nikkei 225 fell 0.9% and 1.2% respectively.

Source: PublicInvest Research - 27 May 2024