HEADLINES

Economy

US: NY Fed finds moderating near-term inflation expectations in June. Inflation a year from now was seen at 3% as of June, from the expected rise of 3.2% in May, while three years from now inflation was seen at 2.9% from May’s 2.8%, according to Federal Reserve Bank of New York’s latest Survey of Consumer Expectations. Inflation five years from now was seen at 2.8% from May’s 3%. (Reuters)

EU: Euro zone investor morale drops, breaking streak of gains in "setback". Investor morale in the euro zone broke an eightmonth streak of improvements with a bigger-than-expected decline in July, describing the results as a "bitter setback". Sentix's index for the euro zone fell to -7.3 points for July from 0.3 in June, putting the barometer firmly back in the red. Analysts polled by Reuters had expected it to drop more moderately to 0.0 this month. The index on expectations also saw a drop, falling to 1.5 in July from 10.0 in June, a move that Sentix said was "likely to worry forecasters". (Reuters)

EU: German exports fall more than forecast in May. German exports fell more than expected in May due to weak demand from China, the United States and European countries, data from the federal statistics office showed. Exports fell by 3.6% in May compared with the previous month, almost double the 1.9% decrease forecast by analysts in a Reuters poll. (Reuters)

UK: Rachel Reeves takes aim at growth barriers. Britain's finance minister Rachel Reeves set out plans on Monday to increase house building, unblock infrastructure projects and attract private investment as part of a new "national mission" to drive economic growth. Reeves said the government would restore mandatory house-building targets for local authorities, fund the hiring of more planning officers, speed up planning approval for infrastructure projects and prioritise unresolved planning decisions. (Reuters)

UK: BoE's Haskel says he wants to keep interest rates on hold. BoE policymaker Jonathan Haskel said that he does not want to cut interest rates from their current 16-year high as inflationary pressures remain in the job market and it is unclear how rapidly they will fade. Financial markets currently price in a roughly 60% chance that the BoE will cut interest rates on Aug 1 for the first time since 2020, but Haskel stuck with his position as one of the policymakers who is more cautious about looser policy. (Reuters)

Japan: Posts current account surplus of USD17.7 bn in May. Japan's current account surplus grew for the 15th straight month in May as a record primary income surplus more than offset the trade deficit, the Ministry of Finance said on Monday, reflecting an ongoing shift of the country's sources of earnings. The current account grew to JPY2.85 tr (USD17.74 bn) in May, compared with a median forecast from economists for a surplus of JPY2.45 tr and the prior month's JPY2.05 tr surplus. (Reuters)

India: Central bank data shows far more jobs than private surveys. India's central bank said the country added 46.7m jobs in the fiscal year ended March, far exceeding numbers in private surveys that point to high unemployment rates in the South Asian nation. (Reuters)

Markets

Maybank (Trading Buy, TP: RM10.40): Aims to double Vietnam assets by 2027, expand investment. Malayan Banking plans to double assets in Vietnam to USD2bn (RM9.42bn) by 2027 and become the country’s top foreign bank for syndicated loans, to capitalise on a booming economy. It also aims for its securities unit to be the leading foreign broker, according to Maybank Vietnam country chief executive officer Michael Foong. The bank also aims to strengthen its role in foreign direct investment in Vietnam and will target new mid-tier corporate clients with annual revenues ranging from USD50m to USD100m. (The Edge)

Tex Cycle: Proposes to transfer listing to Main Market. Tex Cycle Technology (M) has proposed to transfer its listing from the ACE Market of Bursa Malaysia to the Main Market. In a statement, the waste management and recycling solutions provider said the transfer was driven by Tex Cycle’s consistent financial achievements, meeting the stringent profit requirements set by the Securities Commission Malaysia for such a move. The company said it had recorded an aggregate profit after tax exceeding RM20m over the last three to five financial years and RM7.9m in the most recent fiscal year. (StarBiz)

Southern Cable: Bags RM99.6m contract from TNB. Southern Cable Group has secured a RM99.6m contract from Tenaga Nasional Bhd (TNB) for the supply of underground cables and conductors. In a statement, the cable and wire manufacturer said the latest contract increases the total value of its ongoing supply agreement with TNB to RM854.3m. “We are committed to supporting TNB’s development initiatives through our cable and wire solutions that enable grid expansion, renewable energy integration, and modernisation efforts. (StarBiz)

Eurospan: Casio King’s children raises stake in Eurospan to 73.99% as MGO closes. The takeover bid by the children of businessman Tan Sri Robert Tan Hua Choon for Eurospan Holdings has closed, with the offerors increasing their stake in the furniture maker to 73.99%. The takeover bid was triggered on May 24 when Datuk Seri Tan Han Chuan and his sister Datin Tan Ching Ching increased their shareholdings in Eurospan to 71.8%. They are the children of Hua Choon, widely known as Malaysia's first Casio watch distributor, earning him the ‘Casio king’ moniker. The offerors intend to maintain Eurospan’s listing status on the Main Market of Bursa Malaysia. (The Edge)

GHL Systems: NTT Data Japan, holding 94.61% of GHL System shares, extends takeover closing date to July 23. NTT DATA Japan Corp (NTTD Japan) is extending the closing date of its unconditional mandatory takeover offer of RM1.08 per share for GHL Systems by two weeks. CIMB Investment Bank Bhd, acting on behalf of NTTD Japan in its privatisation bid, announced that the offer’s closing date has been extended from July 9 to July 23. (The Edge)

Pestech: Pestech, Sesco nix RM110m substation project in Sarawak. Pestech International and Syarikat SESCO (SSB) have opted for annulment of the notification of award for the Entinggan project after taking into consideration economic factors. PSB through a joint venture (JV) with Sky High Construction SB had in Dec 2023 secured a substation construction project in Entinggan, Kuching, Sarawak from SSB worth RM110m. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after a subdued day of trading on Wall Street ended Monday with a mixed finish for the major stock indices and more market milestones. The S&P 500 and Nasdaq composite each notched all-time highs after finishing with gains of 0.1% and 0.3%, respectively. The Dow Jones Industrial Average gave up an early gain and closed 0.1% lower. The indices have been gaining ground steadily over the last several months and that has helped push the benchmark S&P 500 index to 35 records so far this year. Federal Reserve Chair Jerome Powell addresses Congress on Tuesday and Wednesday. The central bank has kept its benchmark interest rate at its highest level in more than two decades in an effort to tame inflation. European stocks were mixed after France’s elections left its legislature divided among left, center and far right, with no single political faction getting close to a majority. Meanwhile, stocks in Asia fell with the Hang Seng Index dropped 1.55% and the Shanghai Composite Index lost 0.93%.

Source: PublicInvest Research - 9 Jul 2024