HEADLINES

Economy

US: Some good news for bond traders stuck in Fed waiting game. Bond traders who are stuck in a waiting game over Federal Reserve rate policy will soon get some welcome support. For the first time since the early 2000s, the Treasury Department will launch a series of buybacks targeting seasoned and harder-totrade debt. In June, the US central bank is set to begin tapering the pace of its balance-sheet unwind, known as quantitative tightening. (Bloomberg)

EU: German business confidence remains unchanged. German business sentiment remained unchanged in May, reports said citing survey results from the ifo Institute. The business climate index posted 89.3 in May, unchanged from April. The score was forecast to improve to 90.3 in May. The score for April was revised down from 89.4. Companies' assessment of current situation deteriorated in May, while their expectations improved from April.. (RTT)

EU: Poland unemployment rate falls to 4-month low. The jobless rate in Poland decreased for the second straight month in April to the lowest level in four months, figures from the statistical office showed. The unemployment rate dropped to 5.1% in April from 5.3% in March, in line with expectations. Further, this was the lowest jobless rate since Dec last year, when it was also the same 5.1%. In the same month last year, the unemployment rate was 5.3%. The number of registered unemployed people declined to 797,100 in April from 822,200 in the previous month. (RTT)

EU: Norway jobless rate rises to 4.3%. Norway's unemployment rate increased for the second straight month in April, the labor force survey data from Statistics Norway showed. The seasonally adjusted jobless rate came in at 4.3% in April, up from 4.0% in March. In the corresponding month last year, the rate was 3.5%. The number of unemployed people increased to 131,000 in April from 119,000 in the prior month, the agency said. (RTT)

China: Industrial profits increase. China's industrial profits increased in Jan to April period driven by foreign demand, data from the National Bureau of Statistics showed. Industrial profits registered an increase of 4.3% in the first four months of 2024 from the same period last year. The pace of increase was same as seen in the three months to March. In April, industrial profits advanced 4.0%, in contrast to the 3.5% decline in March. (RTT)

China: Raises USD47bn for chip industry in drive for selfsufficiency. China has concluded its largest funding round to date in support of its embattled semiconductor industry, with the socalled Big Fund raising CNY344bn (USD47bn) to aid President Xi Jinping's self-sufficiency drive in the face of US efforts to restrict the country’s access to the latest technology. The third round of the fund, officially called the National Integrated Circuit Industry Investment Fund Phase III, is China’s largest pool of capital to be targeted at seeding companies and technologies to overcome what Beijing refers to as chokepoints for its chip industry. (FTimes)

Japan: BoJ signals room for interest rate hikes after price norm shift. BoJ Governor Kazuo Ueda and his deputy indicated there is scope for gradually raising interest rates now that the nation has shifted away from an inflation norm of 0%. Earlier Ueda pledged that the bank will proceed cautiouslyafter making progress in moving away from zero-inflation expectations. The governor’s opening comments at the conference also touched on the need to avoid interest rates losing their effectiveness by getting too low. (Bloomberg)

Hong Kong: Trade gap narrows sharply on exports surge. Hong Kong's foreign trade deficit decreased considerably in April from a year ago as export growth accelerated amid more outflows to the Mainland and the US, data from the Census and Statistics Department showed. The trade deficit narrowed to HKD10.2bn in April from HKD36.6bn in the same month last year. In March, the trade shortfall was HKD45.0bn. (RTT)

Markets

Pesona Metro: Secures RM411m apartment construction job in Bukit Jalil. Pesona Metro Holdings has secured a RM410.5m contract to undertake the construction of two blocks of 52-storey apartments in Bukit Jalil. The construction outfit said the contract was awarded by Gaya Kuasa SB, which is 68%-owned by Chin May Yong, who is the spouse of Pesona’s major shareholder and non-executive director Wie Hock Kiong. The new job win, with a value significantly higher than Pesona’s market value of RM128.6m, is expected to contribute positively to the group’s earnings and enhance its net assets during the period. (The Edge)

KIP REIT: To acquire DPulze Shopping Centre for RM320m. KIP Real Estate Investment Trust (KIP REIT) has entered into a conditional sale and purchase agreement with DPulze Ventures SB for the proposed acquisition of DPulze Shopping Centre in Cyberjaya for RM320m cash. The seven-storey commercial building has two basement levels and comprises a supermarket, retail spaces, a cinema, a fitness centre and an entertainment centre. KIP REIT said that it is buying the property with a RM1m discount as the property has been valued at RM321m. (Bernama)

Inta Bina: Bags fourth construction contract of the year worth RM199m. Inta Bina Group has bagged a construction contract worth RM198.7m to develop a residential apartment project in Ara Damansara, Petaling Jaya. The construction group said the contract was awarded by Sime Darby Property (Ara Damansara) SB, a wholly owned subsidiary of Sime Darby Property. The project involves the construction of two blocks of 18-storey apartments and one block of 23-storey apartments, consisting of a total of 450 residential units. (The Edge)

Kimlun: Bags RM143mil construction job. Kimlun Corp’s wholly owned subsidiary, Kimlun SB, has accepted an award of a construction contract from Melia Spring SB for main building works for a serviced apartment in Johor Baru, Johor, worth RM143m. The company said the construction work is expected to be completed in 4Q 2026. The project is expected to contribute positively to the earnings and net assets of Kimlun Group for the financial years during the contract period. (StarBiz)

Powerwell: Secures RM57.6m orders from global tech giants. Powerwell Holdings’ wholly owned subsidiary, Powerwell International SB has secured purchase orders RM57.6m from a renowned multinational technology corporation. Powerwell said the purchase orders are expected to be fulfilled within one year from the date of the purchase orders. Powerwell expects the purchase orders to contribute positively to its consolidated earnings and net assets for the financial year ending 31 March 2025. (StarBiz)

Guan Chong: Posts record RM92m net profit for 1Q. Guan Chong posted a record-breaking net profit of RM92m in 1Q24, more than tripled from RM23.8m in the previous corresponding quarter. The fourth-largest cocoa grinder attributed the higher profit due to better grinding margins, driven by high demand for cocoa ingredients surpassing bean supply in the current global shortage. Its revenue during the quarter jumped 69.6% to RM1.9bn compared with RM1.1bn previously, driven by increased selling prices and higher sales volumes of cocoa ingredients. (StarBiz)

MARKET UPDATE

The FBM KLCI might open higher today after shares advanced in Europe and Asia ahead of Monday’s Memorial Day holiday in the United States. European shares saw modest gains after the opening while Asian benchmarks gained upward momentum as the day wore on. Germany’s DAX edged 0.44% higher and the CAC 40 in Paris rose 0.46%. Markets in London were closed for a bank holiday. Tokyo’s Nikkei 225 added 0.7% and the Kospi in Seoul jumped 1.2%. Australia’s S&P/ASX 200 surged 0.8% and the Shanghai Composite index gained 0.8% as the government reported corporate profits rose 4.3% year-on-year in January-April. Hong Kong’s Hang Seng reversed early losses, gaining 1.2% to 18,827.35. In Taiwan and South Korea, heavy buying of computer chip-related shares pushed benchmarks higher. The Taiex ended 1.1% higher after touching a fresh record. MediaTek, a semiconductor company that provides chips for wireless communications, high-definition television and handheld mobile device jumped 7.5%. Back home, Bursa Malaysia gave up earlier gains to close marginally lower today despite the improvement in regional markets as local investors continued to take profit. At the closing bell, the FBM KLCI dipped 1.13 points, or 0.07%, to 1,618.27 from last Friday’s close of 1,619.40.

Source: PublicInvest Research - 28 May 2024