HEADLINES Economy

EU: German factory orders fall unexpectedly on weak foreign demand. German factory orders logged an unexpected decline in May due to the decrease in foreign demand, official data showed. Factory orders declined 1.6% MoM in May, sharper than the revised 0.6% decrease in April, Destatis reported. This was the fifth consecutive decline and also came in contrast to economists' forecast of 0.5% growth. Excluding large orders, incoming orders were 2.2% lower than in April. New orders in the "manufacture of other transport equipment" logged a sharp decrease of 19.2%. Moreover, there was a 2.9% drop in orders in the automotive industry. By contrast, the "manufacture of computer, electronic and optical products" surged 11.2% from the previous month. Further, data showed that new orders for capital goods slid 4.3%. (RTT)

EU: German construction activity contracts at slowest pace in 10 months. Germany's construction sector contracted at the slowest rate in 10 months in June as the downturn in new orders slowed since May, results of the HCOB Purchasing Managers' survey, compiled by S&P Global, showed. The construction Purchasing Managers' Index rose to 39.7 in June from 38.5 in May. The score was firmly below the neutral 50.0 mark but hit the highest since Aug 2023. The survey showed that the decline in housing activity slowed notably for the second straight month. Nonetheless, housing was the weakest performing among those monitored by the survey. At the same time, contractions in both commercial and civil engineering activity were little-changed from May. Constructors reported a fall in new orders due to challenging demand conditions. (RTT)

UK: Housebuilding stalls as projects delayed before election. Britain’s housebuilding industry put a recovery on hold in June as construction firms delayed projects ahead of the general election that culminates. S&P Global Market Intelligence said its UK purchasing manager index for construction slipped to 52.2 in June from 54.7 in May. It was much lower than the reading of 54 expected by economists surveyed by Bloomberg but still over the threshold of 50 indicating growth. Construction firms blamed the weakest rise in new orders since Feb on uncertainty around the election. The ruling Conservative Party and Labour opposition promise to build more homes, but housebuilding was the weakest segment in the PMI survey. (Bloomberg)

UK: New car registrations rise 1.1% in June, hits 1.0m mark In 1H. Car registrations in the UK rose for the twenty third consecutive month in June and achieved one million sales in the first half of the year for the first time since 2019, data from the Society of Motor Manufacturers & Traders, or SMMT, showed. New car registrations grew by 1.1% YoY in June to reach 179,263 units. During the first half of this year, car sales grew 6.0% annually to more than 1.0m units. Moreover, this million-mile milestone at the half year point happened for the first time since 2019. During June, the overall increase was primarily driven by the fleet sector, where registrations were growing by 14.2%, while private retail demand fell for the ninth consecutive month by 15.3%, the SMMT said. (RTT)

Australia: Trade surplus declines in May. Australia's trade surplus declined in May as the growth in imports exceeded the increase in exports, official data showed. The trade surplus fell to AUD5.77bn in May from AUD6.03bn in April, the Australian Bureau of Statistics said. The surplus was expected to fall to AUD6.2bn. In the same period last year, the trade balance posted a surplus of AUD10.79bn. Exports posted a monthly growth of 2.8% driven by shipment of metal ores and minerals. At the same time, imports advanced 3.9% underpinned by fuels and lubricants. (RTT)

Indonesia: Budget committee to give widest room possible to next govt. Indonesia's parliament will provide the widest possible room for the incoming president to carry out his programmes, its budget committee said. The committee held a hearing to tentatively approve state budget assumptions for 2025, which will be used by the government as a basis before submitting the final proposal to the parliament in Aug. "The committee is committed to give the widest possible leeway for the president-elect to carry out his vision and mission," it said. Prabowo Subianto, the country's current defence minister, will take office in Oct alongside his running mate Gibran Rakabuming Raka, the eldest son of outgoing President Joko Widodo. (Reuters)

India: Services activity logs sustained upturn in June. India's service sector growth accelerated somewhat in June amid robust demand conditions both domestically and internationally, the latest survey data from S&P Global showed. The seasonally adjusted HSBC services purchasing managers' index rose to 60.5 in June from 60.2 in May. A score above 50 indicates expansion in the sector. The flash score was 60.4. Demand strength and rising intakes of new business were cited as the key determinants of growth, the survey said. New orders rose further in June, with the current sequence of growth extending to nearly three years. A record expansion was seen in export orders amid more demand from Asia, Australia, Europe, Latin America, the Middle East, and the US. (RTT)

Markets

Awantec: Bags RM26m contract to provide cloud-based solutions to all schools under MOE. AwanBiru Technology, a technology and talent digitalisation enabler, has bagged a RM25.69m contract from the Ministry of Education (MOE) to provide cloud-based solutions, such as Google Workspace for Education and Google Cloud Platform, to all schools under the MOE. Awantec is of the view that the project presents a positive opportunity for the group, as it aligns with its strategic goals and will contribute to its growth and success. In a filing with Bursa Malaysia, Awantec said its wholly owned subsidiary Awantec Systems SB (ASSB) had accepted a letter of award (LOA) issued by the MOE. (The Edge)

SHH Resources: Deputy managing director to step down next month, cites health concerns. Johor-based furniture manufacturer SHH Resources Holdings has announced its deputy managing director Datin Teo Chan Huat is stepping down effective Oct 2, 2024, citing retirement and health concerns. In a filing with Bursa Malaysia on Thursday, SHH Resources said the group had received a resignation letter from Chan Huat, 64, on July 3. Chan Huat has given a three-month notice period. According to SHH Resources' Annual Report 2023, Chan Huat was appointed to the board in May 1996. (The Edge)

Keyfield: Wins work barge, tug supply contracts from Hess. Keyfield International's subsidiary Keyfield Offshore SB has been awarded two contracts by Hess Exploration and Production Malaysia B.V. These contracts involve providing one accommodation work barge (AWB) and one anchor handling tug supply (AHTS) vessel for Hess' offshore operations totalling RM40m. According to a filing with Bursa Malaysia, the contracts began in July 2024 and June 2024 respectively, with charter periods of five months and six months. (BTimes)

Pelikan: Changes name to PBS. Pelikan International Corp has changed its name to PBS, with the name change to take effect from 9 am on July 9. Bursa Malaysia, in a statement, said the company would be traded and quoted on the exchange under a new stock short name PBSB. The stock number remains unchanged. (SunBiz)

Naim: Sells 180.8ha Kuching land for RM223.38m. Naim Holdings, a pioneering property developer in Sarawak, has sold 180.8 hectares of land in Kuching that was acquired some 16 years ago for RM223.38m. Naim said the disposal was a strategic step to inject working capital and pare down part of its debts of some RM437m as at March 31 2024. At the same time, Naim said it is shifting its focus towards developing affordable homes in line with the state government's effort to provide affordable housing. (BTimes)

GHL: NTT DATA Japan's bid to delist GHL Systems crosses 90% threshold. NTT DATA Japan Corp (NTTD Japan) is now in control of GHL Systems after accumulating 92.71% of the payment solutions provider's total issued shares as at July 4, paving the way for GHL to be delisted from Bursa Malaysia. The offer will remain open for acceptances until 5pm on July 9. In a statement, CIMB Investment Bank, which is acting on NTTD Japan's behalf in its privatisation bid, said the offeror does not intend to maintain the listing status of GHL on the Main Market of Bursa Malaysia. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after Japan’s benchmark Nikkei 225 surged Thursday to a record close of 40,913.65, while most other major world markets also advanced. Investors worldwide are keen to see the Federal Reserve cut rates that it has been keeping at two-decade highs to slow growth and tame inflation, and hopes have been reviving that price pressures are easing enough to make that possible. In European trading, Germany’s DAX rose 0.4% and the CAC 40 in Paris gained 0.8%. In London, the FTSE 100 was up 0.9%. British voters were choosing a new government in a parliamentary election Thursday that is widely expected to bring the opposition Labour Party to power. The Nikkei 225 gained 0.8% to 40,913.65, with buying of automakers’ shares and other export oriented stocks pushing the benchmark to an all-time high. The Nikkei 225’s all-time high during intraday trading is 41,087.75, on March 22. Its previous record close was 40,888.43, also set on March 22. The index surpassed its longstanding record of 38,915.87, set on Dec. 29, 1989, in February. Elsewhere in Asia, Hong Kong’s Hang Seng recovered from early losses, rising 0.3%, and the Shanghai Composite index shed 0.8%. Taiwan’s Taiex jumped 1.5% as chip maker and market heavyweight Taiwan Semiconductor Manufacturing Corp. gained 2.7%. In Australia, the S&P/ASX 200 surged 1.2%, while the Kospi in Seoul advanced 1.1%. Bursa Malaysia closed marginally higher today as gains in utility giants were trimmed by profit-taking in selected index-linked telecommunication heavyweights. At the closing bell, the FBM KLCI rose 1.43 points to 1,616.75 compared to Wednesday's close of 1,615.32.

Source: PublicInvest Research - 5 Jul 2024