HEADLINES

Economy

US: Consumer confidence dips on weaker economic expectations. Consumer confidence in the US eased slightly in June as households' economic expectations eroded, survey data from the Conference Board showed. The Conference Board Consumer Confidence Index fell to 100.4 from 101.3 in May. Economists had expected a reading of 100. The Expectations Index, which mirrors consumers' short-term outlook for income, business, and labor market conditions, slid to 73.0 from 74.9 in May. The expectations measure has been below 80, which is the threshold that usually signals a recession ahead, for five consecutive months. Households' average 12-month inflation expectations fell slightly from 5.4% to 5.3%. Economic expectations were continued to be impacted by consumers' view on elevated prices, especially for food and groceries. Concerns about the labor market and US political situation also had an impact. (RTT)

US: Fed’s cook says rate cut needed at some point but timing unclear. Federal Reserve Governor Lisa Cook said it will be appropriate to reduce interest rates at some point, adding that she expects inflation to improve gradually this year before more rapid progress in 2025. With significant progress on inflation and the labor market cooling gradually, at some point it will be appropriate to reduce the level of policy restriction to maintain a healthy balance in the economy. (Bloomberg)

US: Housing market to remain ‘stuck’ until at least 2026. The housing market is unlikely to recover for several years and affordability won’t get any better unless a recession hits, according to Bank of America economists. In a mostly pessimistic outlook on the sector, the bank sees a variety of factors lining up against both a major improvement in sales and a drop in prices that would bring younger buyers back into the market. Among them are pandemicrelated factors that saw a rush of buyers come into the market around 2020 and 2021, driving a dramatic spike in sales and coinciding with an inflation burst that goosed interest rates to their highest level since the turn of the 21st century. (CNBC)

EU: Poland jobless rate falls to 6-month low. The unemployment rate in Poland decreased for the third straight month in May to the lowest level in six months, figures from the statistical office showed. The unemployment rate dropped to 5.0% in May from 5.1% in April, in line with expectations. Further, this was the lowest jobless rate since Nov last year, when it was also the same 5.0%. In the corresponding month last year, the unemployment rate was 5.1%. The number of registered unemployed people declined to 776,600 in May from 797,100 in the previous month. The number of unemployed young people under the age of 24 dropped to 95,800 in May from 99,100 in the previous month. (RTT)

EU: Producer prices in Spain fall further in May. Spain's producer prices continued their falling trend in May amid cheaper energy prices, though at the slowest pace in four months, provisional data from the statistical office INE showed. The producer price index posted an annual decrease of 4.6% in May after a 6.7% decline in April. Producer prices have been falling since March 2023. Within overall prices, energy logged a doubledigit sharp drop of 15.1% versus a 20.7% slump a month ago. Intermediate goods prices were 3.1% lower compared to last year. Meanwhile, prices of consumer and capital goods increased 3.5% and 1.7%, respectively. (RTT)

Hong Kong: Trade gap narrows in May. Hong Kong's foreign trade deficit decreased notably in May from a year ago amid further strong acceleration in export growth, data from the Census and Statistics Department showed. The trade deficit narrowed to HKD12.1bn in May from HKD26.4bn in the same month last year. In April, the trade shortfall was HKD10.2bn. The visible trade deficit of HKD12.1bn was equivalent to 3.1% of the value of imports. The annual increase in exports was 14.8% in May, versus an 11.9% surge in April. Exports to the Mainland of China alone expanded by 23.6% from last year. Total exports to Asia as a whole grew by 18.7%. Within this, shipments to Malaysia advanced the most, by 50.2%. This was followed by Thailand, with a 23.2% jump in exports. (RTT)

Australia: Consumer sentiment rises in June. Australia consumer confidence improved in June but remained firmly in the negative zone largely due to concerns about inflation, growth and interest rate outlook, survey data from Westpac showed. The Westpac-Melbourne Institute Consumer Sentiment Index rose to 83.6 in June from 82.2 in May. Despite the improvement, consumer confidence remained deeply in the pessimistic territory. A score below 100 suggests that pessimists outnumber optimists. The 'family finances vs a year ago' sub-index logged a particularly strong 9.7% lift in June. However, at 69.3, the index remained very weak. (RTT)

Markets

IOI Properties: Receives proposal from CEO to jointly develop Shenton House in Singapore. IOI Properties Group has received a proposal from its group CEO cum major shareholder Lee Yeow Seng to participate in the development of Shenton House, a commercial property located in Singapore that his private vehicle has successfully tendered for, for SGD538m (RM1.9bn). Yeow Seng has proposed that IOIPG acquire all or part of his private vehicle, Shenton 101 Pte Ltd, which is planning to redevelop Shenton House, works for which are scheduled to start at the end of 2025. (The Edge)

Keyfield: Secures RM172m deal for two vessels. Keyfield International’s subsidiary, Keyfield Offshore SB (KOSB), has finalised agreements totaling RM172m for the acquisition of two Dynamic Positioning 2 accommodation workboats (DP2 AWB). According to Keyfield, KOSB has signed a MOA to purchase the secondhand AWB, MV Belait Barakah, from Belait Barakah SB for RM28.3m. Additionally, KOSB has entered into a shipbuilding contract with China’s Jingjiang Nanyang Shipbuilding Co Ltd and Nantong Shunyang Trade and Development Co Ltd for a newbuild DP2 AWB costing RM143.7m. (The Malaysian Reserve)

TRC Synergy: Secures RM125m contract for maintenance work from BHIC. TRC Synergy has secured a RM125m contract to perform scheduled and corrective maintenance work at the Royal Malaysian Navy submarine base in Kota Kinabalu, Sabah. It secured the 60-month project from BHIC Submarine Engineering Services SB, via its wholly owned Trans Resources Corp SB. TRC Synergy said the job will encompass the Zone D area, jetty facility building, bosun building, floating breakwater jetty, shiplift jetty and safety conditioning facilities at the navy submarine base. (The Edge)

Ramssol: Acquires 51% stake in Geekstart for RM6.9m. Ramssol Group is acquiring a 51% stake in Bangkok-based Geekstart Company Ltd for RM6.9m to expand its digital capabilities across Southeast Asia. The company noted that the acquisition exercise comes with a profit guarantee of about RM4.7m for FY2024 and not less than RM7.1m for FY2025. Ramssol group MD and CEO Datuk Seri Cllement Tan Chee Seng said the exercise is expected to contribute positively to the group's financial results this year. (StarBiz)

UWC: Expands capacities amid semiconductor and EV projects. UWC is currently expanding its capacity to cater for its’ existing core business as well as new front-end semiconductor engineering businesses and electric vehicles projects. The group targets to complete Phase Two of its’ new facility in Batu Kawan Industrial Park by Dec 2024. In addition, its new facility in Kamunting, Taiping is ready with the infrastructure setup already ongoing for fabrication works, UWC said. (StarBiz)

FSBM: To solidify its sustainability portfolio. FSBM Holdings plans to utilise up to 10% of its revenue to develop an energy consumption tracing system for companies to solidify their environmental, social, and governance portfolio. FSBM MD Pang Kiew Kun said the company embarked on the project last year to build a system that can extract, process and analyse real-time data on clients’ energy consumption. Some companies continue to record data manually. (StarBiz)

MARKET UPDATE

The FBM KLCI might open flat today after a rebound for Nvidia propped up a weakened Wall Street Tuesday. The S&P 500 rose 0.4% and neared its all-time high set a week earlier, while the Nasdaq composite leaped 1.3% for its first gain in four days. Such strength came even as most stocks outside Wall Street’s frenzy around artificial-intelligence technology fell. The Dow Jones Industrial Average, which doesn’t include Nvidia among its members, was a laggard and sank 299 points, or 0.8%. Nvidia climbed 6.8%, and without that gain, the S&P 500 would have dropped to a loss for the day. The chip company’s shares snapped a three-day losing streak where they had lost nearly 13% for their worst such stretch since 2022. In stock markets elsewhere, indices fell across much of Europe and rose in much of Asia. Back home, Bursa Malaysia extended its losing streak to seven consecutive trading sessions today due to a lack of catalysts, diverging from the regional trend where markets finished mostly higher. At the closing bell, the FBM KLCI erased 4.28 points, or 0.27 per cent, to 1,585.38 from yesterday’s close of 1,589.66.

Source: PublicInvest Research - 26 Jun 2024