HEADLINES

Economy

US: Weekly jobless claims, equipment spending data point to slowing economy. First-time applications for US unemployment benefits drifted lower last week, but the number of people on jobless rolls jumped to a 2-1/2 year high in mid-June, suggesting that labor market conditions were easing amid slowing economic growth. Ebbing economic momentum was underscored by other data showing business spending on equipment declined in May, while a slump in exports pushed up the goods trade deficit. The stream of softer data on the heels of a sharp slowdown in economic growth in the first quarter increases the probability of the Fed cutting interest rates in Sept. Retail sales were tepid in May and inflation pressures subsided considerably. Economists do not see the data as suggesting that a recession was imminent. (Reuters)

US: Pending home sales unexpectedly slump 2.1% in May. Pending home sales in the US unexpectedly saw a continued decrease in the month of May, the National Association of Realtors revealed in a report released. NAR said its pending home sales index slumped by 2.1% to 70.8 in May after plunging by 7.7% to 72.3 in April. Economists had expected pending home sales to jump by 2.5%. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. The unexpected decrease by pending home sales partly reflected a steep drop in the South, where pending home sales tumbled by 5.5%. (RTT)

US: Durable goods orders unexpectedly inch higher in May. The Commerce Department released a report showing new orders for US manufactured durable goods unexpectedly crept higher in the month of May. The report said durable goods orders inched up by 0.1% in May after rising by a downwardly revised 0.2% in April. Economists had expected durable goods orders to slip by 0.1% compared to the 0.6% increase that had been reported for the previous month. The unexpected uptick by durable goods orders partly reflected an increase by orders for transportation equipment, which climbed by 0.6% in May after dipping by 0.1% in April. (RTT)

EU: Italy producer prices fall least in 13 months. Italy's producer prices continued to decline in May, though at the slowest pace in just over a year, data from the statistical office ISTAT showed. Producer prices posted an annual decrease of 3.5% after a 5.9% drop in April. Further, this was the slowest decline since April 2023, when prices had fallen only 1.5%. The annual decline in March was largely driven by a 10.1% plunge in energy costs. Prices for intermediate goods were 3.9% lower. Meanwhile, costs for consumer goods grew by 1.0%. (RTT)

UK: Car production falls 11.9% in May. UK car production declined for the third straight month in May, as factories continued to retool for an electric mobility future, the Society of Motor Manufacturers and Traders, or SMMT. Car production declined 11.9% yearly to 69,652 units in May. Production for the domestic market rose 9.7% in May but failed to offset a 17.4% decrease in production for the export market. The EU remained the industry's largest global market, claiming 52.5% of exports, followed by the US with 18.2%. (RTT)

UK: Grocery sales growth slows in June as wet weather weighs. Sales growth at British supermarkets slowed in June, reflecting wet weather, strength in sales last year and lower food inflation, industry data showed. Market researcher NIQ said sales at UK supermarkets rose 1.1% in the four weeks to June 15 YoY, versus growth of 3.3% in its May report and of 12.1% in the same period last year when Britain enjoyed an early June heatwave. The data is the most up to date snapshot of UK consumer behaviour ahead of the July 4 national election. This time last year UK food inflation had just peaked at 14.6%. It was 3.2% in May this year, according to NIQ. (Reuters)

Japan: Retail sales climb 3.0% on year in May. The total value of retail sales in Japan was up 3.0% on year in May, coming in at 13.504trn yen. That exceeded expectations for an increase of 2.0%, which would have been unchanged from the April reading following a downward revision from 2.4%. On a monthly basis, retail sales jumped a seasonally adjusted 1.7% after rising 0.8% in the previous month. Sales from large retailers were up 1.7% on month and 4.0% on year after gaining 1.2% on month and 3.0% on year a month earlier. Commercial sales were up 2.0% on month and 5.6% on year at 48.947trn yen, while wholesale sales added 2.3% on month and 6.7% on year at 35.443trn yen. (RTT)

Markets

Kim Loong: Targets 5% FFB production increase, plans 1,000 hectares replanting. Kim Loong Resources aims to achieve at least 5% higher fresh fruit bunches (FFB) production for FY25, driven by improved age profiles of young palm productive areas and ongoing replanting initiatives. The group targets to replant about 1,000 hectares in FY25. As for palm oil mling operations, Kim Loong targets to achieve a total processing throughput of 1.6m tonnes of FFB for the current financial year. It said despite the volatile and unpredictable nature of CPO price movements, the average CPO price in FY25 will hover around RM4,000 per tonne. (StarBiz)

YNH Property: Extends the conditional period for RM215m sale of 163 Retail Park to Sunway REIT till 26 Sept. YNH Property said the conditional period of the sale and purchase agreement for it to sell 163 Retail Park to Sunway Real Estate Investment Trust (Sunway REIT) has been extended by three months to 26 Sept. The conditional period ended on 26 June. This is the second extension for the deal. The property developer said both parties have mutually agreed to the extension. (The Edge)

Dataprep: Shareholders reject reappointment of chairman Mohd Rizal and two directors at AGM. Dataprep Holdings’ shareholders rejected the reappointment of non-independent and non-executive chairman, Datuk Mohd Rizal Jaafar, and two independent directors, Abdul Aziz Ishak and Nur Zarina Ghazali at its AGM. Dataprep announced their cessation of office because resolutions on their re-appointment were not carried out at the group’s 35th annual general meeting. (The Edge)

Crescendo: Data centre land sales propel earnings. Land sales to data centre developers lifted Crescendo Corp’s 1Q revenue to a record-high of RM527m. The property developer noted its revenue for 1Q25 surged by about nine-fold YoY, from just RM58.3m a year earlier. More than 90% of the revenue was contributed by the data centre land sales in Nusa Cemerlang Industrial Park (NCIP). Land sales at NCIP alone represent 69% or RM335m of Crescendo’s committed property sales of RM486m as of 25 June 2024. (StarBiz)

Sapura Energy: 1Q earnings drop by 44% to RM82m. Sapura Energy reported a 43.8% decline in net profit for 1Q25, dropping to RM82.1m from RM146.1m YoY. The company attributed this decrease to higher operating expenses and finance costs. Despite the profit decline, revenue increased to RM1.2bn from RM951.7m, driven by significant progress in the engineering and construction (E&C) segment, which surged by 42.5% to RM818.9m compared to 1Q24. (The Malaysian Reserve)

United Malacca: Quarterly net profit jumps 78% on higher oil palm prices, declares 7 sen dividend. United Malacca reported a 77.8% rise in quarterly net profit to RM15.3m from RM8.6m a year earlier, driven by stronger revenue contributions from its main business segments which offset losses from its investment activities. The plantation group's earnings per share rose to 7.29 sen for its 4QFY2024 from 4.1 sen previously. Revenue increased 26.8% to RM171.5m from RM135.3m in 4QFY2023. United Malacca declared a second interim dividend of 7 sen per share, payable on 9 Aug. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after major stock indices on Wall Street closed little changed Thursday as traders looked ahead to a key report on inflation that could influence the Federal Reserve’s next move on interest rates. The S&P 500 eked out a 0.1% gain. The benchmark index has been hovering near the alltime high it set last week. The Nasdaq composite rose 0.3% and remains just below its all-time high. The Dow Jones Industrial Average closed 0.1% higher. Gains in retailers and communications services companies helped outweigh losses in consumer goods makers, financial stocks and elsewhere in the market. Amazon.com rose 2.2% and Meta Platforms added 1.3%. European shares slipped on Thursday on investor caution ahead of crucial global economic data and the first round of French elections, while retailer H&M sank after missing quarterly profit forecasts. The pan-European STOXX 600 closed 0.4% lower, extending losses for the third straight sessions.

Bursa Malaysia closed lower today after notching modest gains yesterday, dragged by the weakness in selected oil and gas heavyweights. At the closing bell, the FBM KLCI eased 0.38% or 6.01 points to 1,584.94 from Wednesday’s close of 1,590.95. In the region, another set of measures to boost the Chinese property market failed to lift market sentiment. Hong Kong’s Hang Seng fell 2.06%, while the Shanghai composite index was down 0.9%.

Source: PublicInvest Research - 28 Jun 2024