PublicInvest Research

PublicInvest Research Headlines - 30 May 2024

PublicInvest
Publish date: Thu, 30 May 2024, 10:39 AM
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An official blog in I3investor to publish research reports provided by PublicInvest Research team.

All materials published here are prepared by Public Investment Bank Berhad. For latest offers on Public Invest trading products and news, please refer to: https://www.publicinvestbank.com.my/pbswecos/default.asp

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HEADLINES

Economy

US: Mortgage applications pulled back sharply last week. The Mortgage Bankers Association released a report showing a sharp pullback by US mortgage applications in the week ended May 24th. The MBA said the Market Composite Index, a measure of mortgage loan application volume, plunged by 5.7% last week after jumping by 1.9% in the previous week. Mortgage rates increased for the first time in four weeks, with the 30-year fixed rate up to 7.05% and all other loan types also seeing increases. The uptick in rates led to a decline in mortgage applications heading into Memorial Day weekend. Both purchase and refinance applications fell, pushing overall activity to the lowest level since early March. (RTT)

EU: German inflation rises as consumer confidence hits 2-year high. Germany's annual inflation recorded its first increase of 2024 in May, aligning with economists' forecasts. According to preliminary data published by the Federal Statistical Office (Destatis), the CPI surged by 2.4% in May 2024 compared to the previous year, up from the 2.2% rate in April and matching the expected 2.4% rise. On a monthly basis, inflation advanced at a modest 0.1% pace, the lowest increase since Dec 2023, decelerating from the previous 0.5% growth and falling below the anticipated 0.2%. (Euronews)

EU: Poland inflation rises slightly to 2.5%. Poland's CPI increased for the second straight month in May, though marginally, the preliminary data from Statistics Poland showed. The CPI climbed 2.5% YoY in May, slightly faster than the 2.4% increase in April. That was slower than the 2.8% rise expected by economists. Prices for food and non-alcoholic beverages grew 1.6% annually in May, while utility costs were 1.8% lower. Data showed that expenses in connection with fuels for personal transport equipment showed an increase of 3.6%. (RTT)

EU: Sweden retail sales rise 0.5%. Sweden's retail sales increased for the second straight month in April amid more demand for consumables, figures from Statistics Sweden showed. Retail sales rose a working-day adjusted 0.5% YoYin April, though slower than the 1.1% recovery in March. Sales of consumables, excluding sales at the state-owned chain of liquor stores, grew 3.4% annually in April, while those of durables decreased 1.9%. On a monthly basis, retail sales moved up 0.3% in April after remaining flat in the prior month. (RTT)

EU: Italy consumer confidence improves; business morale weakens. Italy's consumer confidence increased more-thanexpected in May after falling in the previous two months as all subcomponents made positive contributions, survey results from the statistical office Istat showed. Consumer sentiment rose to 96.4 in May from 95.2 in the previous month. The expected score was 96.0. Among components, the economic climate index strengthened to 101.9 in May from 99.4 in April. The index measuring the future climate also improved strongly to 95.7 from 93.9, and the personal climate advanced from 93.7 to 94.4. Similarly, the current climate index rose to 97.0 from 96.2. (RTT)

China: IMF upgrades China's GDP growth forecasts but warns of risks ahead. China's economy is set to grow 5% this year, after a strong first quarter, the International Monetary Fund said, upgrading its earlier forecast of 4.6% expansion though it expects slower growth in the years ahead. The global lender's new projections come as Beijing steps up efforts to shore up an uneven recovery in the world's second-biggest economy, which has stumbled in the face of a protracted property crisis and its ripple effects across investors, consumers and businesses. The IMF said it had revised up both its 2024 and 2025 GDP targets by 0.4ppts but warned that growth in China would slow to 3.3% by 2029 due to an ageing population and slower expansion in productivity. It now expects China's economyto grow 5% in 2024 and to slow to 4.5% in 2025. (Reuters)

Australia: Inflation quickens to 5-month high, sounding rate alarm. Australian CPIunexpectedly picked up to a five-month high in April due in part to increases in petrol, health and holiday costs, bolstering expectations that interest rates would not be lowered any time soon. Data from the Australian Bureau of Statistics showed its monthly CPI rose at an annual pace of 3.6% in April, up from 3.5% in March and above market forecasts of 3.4%. Moreover, a closely watched measure of core inflation, the trimmed mean, also accelerated to an annual 4.1%, from 4.0%. The CPI excluding volatile items and holiday travel stayed at an annual 4.1%. (Reuters)

Japan: BOJ policymaker hints at rate hike if yen's impact on inflation is big. The BOJ may raise interest rates if sharp falls in the yen boost inflation or the public's perception of future prices move more than expected, board member Seiji Adachi said. While short-term currency moves alone would not trigger a policy shift, the central bank could raise interest rates if excessive yen falls persist and have a big impact on inflation expectations, Adachi said in a speech. He also said the BOJ must look not just at downside risks to the economy and prices, but upside risks, in guiding policy.. (Reuters)

Singapore: Producer price inflation accelerates. Singapore's producer price inflation (PPI) accelerated in April amid an increase in both the oil and the non-oil index, data from the Department of Statistics showed. The manufacturing PPI climbed 3.2% YoY in April, faster than March's 2.3% rise. The non-oil index rose 2.8% annually in April, and the oil index showed an increase of 5.4%. Domestic supply prices were 0.1% lower in April than a year ago, following a 2.0% decline in the prior month. On a monthly basis, producer prices increased at a stable rate of 0.3%. The import price index fell at a slower pace of 1.7% over the year, following a 4.0% decrease in the previous month. Data showed that export prices declined 0.5% annually in April, slower than the 2.2% drop a month ago. (RTT)

Markets

Paramount: To launch seven projects with RM2.4bn GDV in 2024. Paramount Corp targets to launch seven projects (including new phases of existing projects) in 2024 with a projected GDV of RM2.4bn, of which RM81m was launched in 1Q of 2024. Response is encouraging from the recently launched The Ashwood in May 2024, a luxury high rise residential development at the prestigious U-Thant enclave in Kuala Lumpur. Together with The Ashwood launch, Paramount expects to launch a total GDV of RM1.6bn by the first half of 2024. (StarBiz)

E&O: To launch projects with RM1.63bn GDV. Eastern & Oriental (E&O) is poised to launch about three projects with a combined GDV of RM1.63bn over the next couple of years. Its managing director Kok Tuck Cheng outlined these upcoming ventures, which encompass a diverse range of offerings including landed homes, The Lume, and marina apartments boasting seafront views. The Andaman Island developments continues to build momentum, with even Senna and Fera showing strong sales performance, with over 90% take up rate, since its launch in Jan 2024. (StarBiz)

Vizione: Wins RM250m construction job. Vizione Holdings (VHB) has accepted a LOA from Midlands City SB to design, build and deliver the construction for phase two and three of a housing development in Semenyih, Selangor, worth RM250m. VHB said the project consists of two 15-storey apartment blocks of 446 units, as well as three 18-storey apartment blocks, with another 446. “The date of commencement shall be on the date of issuance of architect instruction. The completion period shall be 36 months from the date of commencement,” the company said. (StarBiz)

Mitrajaya: Accepts RM86m data centre foundation works from Lendlease. Mitrajaya Holdings (MHB) has accepted a works contract from Lendlease Projects (M) SB for the foundation works of the NEXTDC KL1 data centre project in Petaling Jaya worth RM86.6m. Its wholly owned subsidiary Pembinaan Mitrajaya SB has accepted and signed a works contract for the job for the Australian company with expertise in designing, constructing, and operating data centres. (The Malaysian Reserve)

Farm Fresh: Full-year net profit rises 27% to RM63.5m on higher sales, lower costs. Farm Fresh’s net profit for FYE 31 March 2024 rose 27% to RM63.5m, from RM50.1m a year ago, as full-year revenue surged to RM810.4m from RM629.7m. Farm Fresh said its net profit for 4Q rose to RM23.9m from RM4.9m. Reviewing its performance, Farm Fresh said the increase in revenue was due to higher Horeca (hotels, restaurants and cafes) and ultra-high treatment (UHT) product sales, positive impact of the launching of new products. (The Edge)

Capital A: Logs third straight quarterly loss despite record revenue in 1QFY2024. Capital A has recorded its third consecutive quarterly loss, on the back of a massive forex loss and depreciation. The owner of low-cost carrier AirAsia posted a net loss of RM91.6m for 1QFY2024, in contrast to a net profit of RM57.1m in the same period last year, Capital A said. It incurred RM370.9m in forex losses as well as RM358.5m in aircraft depreciation charges. (The Edge) MARKET UPDATE

The FBM KLCI might open lower today after US stocks sank under the weight of higher yields in the bond market on Wednesday. The S&P 500 dipped 39.09 points, or 0.7%, to 5,266.95 and fell further from its record set last week. It trimmed its gain for May, which had been on track to be its best month since November, as four out of every five stocks in the index dropped. The Dow Jones Industrial Average lost 411.32, or 1.1%, to 38,441.54, and the Nasdaq composite slipped 99.30, or 0.6%, to 16,920.58 after setting its latest all-time high. A report from the Fed released Wednesday said that it’s heard from businesses and other contacts around the country that consumers are pushing back against more increases to prices. That in turn is eating into companies’ profits as their own costs for insurance and other expenses continue to rise. In stock markets abroad, indices were mostly lower across Asia and Europe. Hong Kong’s Hang Seng fell 1.8%, South Korea’s Kospi dropped 1.7% and France’s CAC 40 fell 1.5%. Stocks in Shanghai were roughly flat after the International Monetary Fund raised its forecast for China’s economic outlook, saying it expects the No. 2 economy to grow at a 5% annual pace this year. But it also warned that consumer-friendly reforms are needed to sustain strong, highquality growth. Back home, Bursa Malaysia ended at an intraday low, tracking the mostly downbeat performance of regional peers. At the closing bell, the FBM KLCI slid 10.47 points, or 0.64%, to 1,605.35 from Tuesday’s close of 1,615.82.

Source: PublicInvest Research - 30 May 2024

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