HEADLINES

Economy

US: Record high prices, rising mortgage rates depress US home sales. US existing home sales fell for a third straight month in May as record-high prices and a resurgence in mortgage rates sidelined potential buyers from the market. The National Association of Realtors reported that housing inventory jumped last month to the highest level in nearly two years. Rising supply, if sustained, could curb further price gains and improve affordability. (Reuters)

US: Mortgage rates fall for third week. US mortgage rates decreased for a third week in a row amid signs of cooling inflation and expectations of a future Fed rate cut, the Freddie Mac Primary Mortgage Market Survey data showed. The 30-year fixed rate mortgage averaged 6.87% for the week ending June 20 versus 6.95% in the previous week. In the same week last year, the rate was 6.67%. The rate was the lowest since early April, when it was 6.82%. (RTT)

UK: Private sector grows at slowest pace in 7 months. The UK private sector growth weakened to a seven-month low in June as the slowdown in the service sector growth offset the stronger performance in manufacturing, flash survey results published by S&P Global revealed. The flash composite output index dropped unexpectedly to 51.7 in June from 53.0 in May. (RTT)

UK: Public debt highest since 1960s; budget deficit remains below estimate. The UK public sector net debt rose to its highest level since early 1960s, while public sector borrowing remained below the official estimate, the Office for National Statistics reported. Public sector net debt excluding public sector banks was estimated at 99.8% of GDP at the end of May. (RTT)

EU: Euro zone business recovery slows sharply in June, PMI shows. Euro zone business growth slowed sharply this month as demand fell for the first time since Feb, a survey found, with the bloc's services industry showing some signs of weakening while the downturn in manufacturing took a turn for the worse. (RTT)

Japan: Services activity shrinks first time in almost two years. Key measures of Japan’s manufacturing and service activity weakened in June, with the services gauge registering a contraction for the first time in almost two years as companies faced strains from higher input costs. The au Jibun Bank purchasing managers’ services index fell to 49.8 in June from 53.8 the previous month, dipping below the boom-or-bust 50 level for the first time since Aug of 2022, S&P Global reported. (Bloomberg)

Hong Kong: Inflation rises slightly to 1.2%. Hong Kong's CPI rose for the first time in three months in May, though marginally, data released by the Census and Statistics Department showed. The CPI climbed 1.2% YoY in May, following a 1.1% rise in April, which was the weakest inflation since June 2021. (RTT)

India: Private sector growth strengthens in June. India's private sector activity expanded at a quicker pace in June, underpinned by rises in both the manufacturing and service sectors, flash survey data from S&P Global showed. The flash HSBC composite output index rose to 60.9 in June from 60.5 in May. A score above 50 indicates expansion in the sector. (RTT)

Markets

GDB: Clinches RM866m logistics hub contract. GDB Holdings, through its subsidiary Grand Dynamic Builders SB, has been awarded an RM865.7m contract to construct a logistics hub in Seksyen 15, Shah Alam, Selangor. This marks GDB’s second logistics hub project, it said. The contract from Strategic Sonata SB involves designing, constructing, and maintaining a five-storey ramp-up warehouse with offices and facilities. The 30-month project will start in June 2024 and is expected to be completed by Dec 2026. (The Malaysian Reserve)

Ann Joo: Bags RM297m job from Tenaga for electrification of ECRL feeder stations. Ann Joo Resources and its consortium partner have bagged a contract worth RM297.9m from Tenaga Nasional for the electrification of ECRL feeder stations. Its unit Ann Joo Metal SB, in consortium with PT Lumintu Insan Mandiri, had been awarded the contract by Tenaga Switchgear SB, a unit of TNB. The LOA dated 14 June are subject to special conditions, which shall be fulfilled within stipulated deadlines. (The Edge)

Hiap Huat: Earmarks RM100m to build liquid bulk storage terminal in Port Klang. Scheduled waste management company Hiap Huat Holdings announced a RM100m investment over the next five years to build a liquid bulk storage terminal in Port Klang. The terminal will be developed in three phases, Hiap Huat said. The first phase is expected to be operational by 4Q of 2025. The land for the project is leased from Westports Holdings for 46 years, with an option to extend for an additional 12 years. (The Edge)

PJBumi: Lands My Digital ID Onboarding contract with Mimos Semiconductor. PJBumi’s subsidiary, PJBumi Heavy Engineering & Services SB, has accepted a contract to provide My Digital ID Physical Onboarding Services to Mimos Semiconductor (M) SB. The contract involves setting up 500 touch point devices for RM100,000 and receiving RM1.70 per successful onboarding over 24 months, starting from 21 June 2024. The contract is expected to positively impact earnings per share for the fiscal years ending June 2025 and June 2026. (The Malaysian Reserve)

Infomina: Gets RM53.6m IT support service order from Thai Bank. Infomina has secured an order worth USD11.4m (RM53.6m) from a bank in Thailand for IT support services. The IT service firm said that its subsidiary Infomina (Thailand) Co Ltd received the order for technology application, infrastructure operations, maintenance, and support services. The group did not disclose the specific beneficiary of the services, mentioning only that it is a bank in Thailand. Work for the order is scheduled to commence on 1 June 2024, and will span five years and seven months until 21 Dec 2029. (The Edge)

Unisem: To buy RM30m worth of land in Gopeng, Perak for expansion. Unisem (M) is purchasing 38 plots of land in Gopeng, Perak, for RM30.1m to expand its semiconductor packaging and test facilities. The 1.9m sq ft plots are located behind its existing facility. The acquisition from Sungai Raya Development SB, Poh Yoke Lan, and Low Yoon Chin will also provide additional parking and employee hostels. Expected to be completed in three to six months, the acquisition aims to support Unisem’s growth. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open flat today after US stocks coasted to theclose of their latest winning week on Friday, as Nvidia ’s stockcontinued to cool from its startling, supernova run. The S&P 500slipped 0.2%, but it remained close to its all-time high set onTuesday and capped its eighth winning week in the last nine. TheDow Jones Industrial Average edged up by 15 points, or less than0.1%, while the Nasdaq composite dropped 0.2%. Nvidia againdragged on the market after falling 3.2%. The company’s stock hassoared more than 1,000% since October 2022 on frenzied demandfor its chips, which are powering much of the world’s move intoartificial-intelligence technology, and it briefly supplanted Microsoftthis week as the most valuable company on Wall Street. In stockmarkets elsewhere, European stocks fell after the weak continentaleconomic reports, and many Asian indexes were also lower. HongKong’s Hang Seng dropped 1.7%, and South Korea’s Kospi fell0.8%. Back home, Bursa Malaysia ended lower for the fifthconsecutive day today, reversing its earlier gains due to late selling.At the closing bell, the FBM KLCI was marginally weaker by 0.14per cent or 2.32 points to 1,590.37 from Thursday’s close of1,592.69.

Source: PublicInvest Research - 24 Jun 2024