HEADLINES

Economy

US: 10-year Treasury yield inches higher as investors look to key data. Longer-dated US Treasury yields ticked higher as investors awaited key economic data slated for the week and markets considered the latest US political developments. The 10- year Treasury was up about 2bpts to about 4.26%. (CNBC)

EU: Belgium consumer confidence weakens in July. Consumers in Belgium remained more pessimistic in July, the National Bank of Belgium said. The consumer sentiment index dropped to -5 in July from -1 in the previous month. Households were less confident about their own future financial situation and less optimistic about their savings intentions over the coming twelve months. The index measuring the financial situation of households dropped to -2 from +1. The index for savings among households fell to 16 from 20. (RTT)

EU: ECB cut bets not fully misplaced, but not baseline, Kazimir says. Market bets on two more European Central Bank interestrate reductions this year aren’t entirely misplaced, but shouldn’t be taken as a given or a baseline scenario, according to Governing Council member Peter Kazimir. Kazimir spoke after the ECB last week after decided to keep borrowing costs on hold, with President Christine Lagarde saying the next policy gathering, on Sept 11-12, is wide open. (Bloomberg)

EU: Poland retail sales growth eases unexpectedly to 4.4%. Poland's retail sales growth eased unexpectedly in June after accelerating in the previous month, figures from Statistics Poland showed. At constant prices, retail sales climbed 4.4% YoY in June, following a 5.0% rise in May. The expected increase was 5.3%. In June, sales of motor vehicles, motorcycles, and parts grew the most by 24.3% annually, and those of solid, liquid, and gaseous fuels by 11.0%. (RTT)

UK: BOE set to give labour a reality checks over UK growth plans. Prime Minister Keir Starmer’s ambition to lift UK economic growth to 2.5% a year is expected to be dealt a blow when the Bank of England releases new forecasts next week. In its economic update on Aug 1, the BOE will say the UK’s long-term growth potential is less than 2%, economists predict, leaving Chancellor of the Exchequer Rachel Reeves with tough decisions if she is to deliver above-inflation pay rises for public-sector workers and make a start on fixing the UK’s dilapidated public services. (Bloomberg)

BOJ: Weak consumer spending complicating rate call. Bank of Japan officials see weakness in consumer spending complicating their decision over whether to raise interest rates at a policy meeting next week, according to people familiar with the matter. Some officials take the view that skipping a rate hike in July is an option to provide more time to examine incoming data to confirm if consumer spending will pick up as expected, the people said. (Bloomberg)

Hong Kong: Inflation rises to 1.5% in June. Hong Kong's consumer price inflation rose for the second straight month in June to the highest level in three months, data released by the Census and Statistics Department showed. The consumer price index, or CPI, climbed 1.5% YoY in June, following a 1.2% rise in May. Utility costs grew for the first time in eight months in June by 0.1%, versus a 10.9% slump in May. Charges for miscellaneous services increased at an accelerated pace of 2.5%.. (RTT)

Taiwan: Export orders rise 3.1%, less than expected. Taiwan's export orders increased for the fourth straight month in June, albeit at a slower-than-expected pace, according to data released by the Ministry of Economic Affairs. Export orders climbed 3.1% YoY in June, slower than the 7.0% surge in May. Meanwhile, economists had expected the growth to accelerate to 12.5%. Further, this was the weakest increase in three months. (RTT)

Markets

Malaysia Airports: Inks MOU with Menteri Besar Selangor Incorporated to develop Subang Airport's Zones 3 and 4. Malaysia Airports Holdings has signed a MOU with MBI to advance the development and marketing of Zone 3 and Zone 4 at Sultan Abdul Aziz Shah Airport in Subang (Subang Airport). The development of these zones would include the creation of a new area dedicated to business aviation hangars and the amplification of the aerospace ecosystem catering to aerospace manufacturers, assemblers and component maintenance, repair and operations operators. (The Edge)

Eversendai: Seals Abu Dhabi-based partner to supply steel beams for Trojena Ski Village project. Eversendai Corp has teamed up with a unit of Abu Dhabi-based Emirates Steel Arkan Group (ESA), for the development of the Trojena Ski Village project in Saudi Arabia. In a statement, Eversendai said it is collaborating with Emirates Steel, a unit of ESA, which will supply premium steel beams for the construction of the Trojena Ski Village. The outdoor Trojena Ski Village, which is being developed to host the Asian Winter Games in 2029, is part of a series of Saudi state-endorsed construction projects dubbed NEOM. (The Edge)

MPay: Gets Bank Negara nod for Class A money services licence. Managepay Systems’ wholly owned subsidiary, ManagePay Services SB (MPSB) has received approval from Bank Negara for Class A Licence to operate money services, including money exchange and issuing multi-currency prepaid cards and wallets. Managepay said the approval from Bank Negara to carry out Class A money services business for one year, commencing from 18 July 2024 to 17 July 2024 and renewable yearly, pursuant to Money Services Business Act 2011 (MSB Act 2011). (StarBiz)

Grand Central: Gets delisting proposal, exit offer at 46 sen per share. Grand Central Enterprises which operates hotels under the Grand Continental brand, said it has received a buyout offer worth RM90.6m from its major shareholders as part of a delisting plan. Tan Chee Hoe & Sons SB and Hotel Grand Central Ltd which together hold a 72.7% stake in Grand Central are offering 46 sen per share to other shareholders. The offer price represents a premium of 28% from the last closing price. (The Edge)

Crescendo: Proposes three-to-one share split. Crescendo Corp has proposed the subdivision of every one of its shares into three shares to improve the trading liquidity of the property developer's shares. As of 3 July, the issued share capital of Crescendo was 280.5m including 1.1m treasury shares, the company bourse filing showed. Upon completion of the share split, the total number of issued shares will be enlarged to 841.4m, the company said. (The Edge)

YX Precious: Gets SC approval for Main Market transfer. YX Precious Metals has secured approval from the Securities Commission for the transfer of its listing to the Main Market of Bursa Malaysia from the ACE Market. The gold jewellery wholesaler and manufacturer said SC had, vide its letter dated 22 July approved the transfer. In 1Q ended 31 March, YX posted a higher net profit of RM2.7m, or earnings per share of 0.73 sen against RM2.7m, or 0.71 sen in the same period last year. (StarBiz)

MARKET UPDATE

US markets rebounded from last week’s selloff to start off on a positive note, with technology stocks leading gainers on the day. The Nasdaq Composite outperformed amongst the major benchmarks with a 1.6% gain as the S&P 500 rose 1.1%, led by the information technology and communication services sectors. The Dow Jones Industrial Average was 0.3% higher meanwhile. Investors are also keeping an eye on corporate profits as the earnings season ramps up. The small cap-focused Russell 2000 added 1.7%, building on last week’s gain which was seen as a sign of traders moving money away Big Tech names that have seen monster gains this year. European markets were mostly higher as investors reacted to the news that US President Joe Biden had dropped out of the Presidential race. Notable mover of the day on the continent was Ryanair whose shares fell more than 17% after the company said its quarterly profit after tax had fallen 46% in 2Q CY2024, and that fares will be lower than expected in the summer months. Germany’s DAX and France’s CAC 40 rose 1.3% and 1.2% as UK’s FTSE 100 ended 0.5% higher. Asian stocks started off the week poorly earlier in the day, reacting negatively to the evolving US political landscape. China’s central bank cut its rates unexpectedly, with the short term 7-day reverse repurchase rate lowered to 1.7% from 1.8%. The one-year and five-year loan prime rates were also trimmed by 0.1% each to 3.35% and 3.85% respectively. The Shanghai Composite Index and Nikkei 225 fell 0.6% and 1.2% while the FBM KLCI lost 0.9%. The Hang Seng Index bucked regional trends with a 1.3% gain however.

Source: PublicInvest Research - 23 Jul 2024