HEADLINES

Economy

US: Record house prices depress US home sales in June. US existing home sales fell more than expected in June as the median house price set another record high, but improving supply and declining mortgage rates offered hope that activity could rebound in the months ahead. The fourth straight monthly decline in home resales reported by the National Association of Realtors added to weak homebuilding and permits data in suggesting that the housing market contracted in the second quarter after providing a boost to economic growth in the Jan-March quarter. Home sales dropped 5.4% last month to a seasonally adjusted annual rate of 3.89m units, the lowest level since Dec. Economists polled by Reuters had forecast home resales would slip to a rate of 4.00m units. (Reuters)

EU: Turkey keeps interest rate on hold. Turkey central bank kept its key interest rate at the current level for the fourth straight meeting. The Monetary Policy Committee of the Central Bank of the Republic of Turkey, or CBRT, governed by Yasar Fatih Karahan decided to maintain the policy rate at 50.0%. Previously, the bank had lifted the policy rate by a sharp 500bps in March. The MPC reiterated that the tight monetary stance will be maintained until a significant and sustained decline in the underlying trend of monthly inflation is observed, and inflation expectations converge to the projected forecast range. (RTT)

EU: Hungary cuts key rate, flagging more easing for the year. Hungary’s central bank extended its more than yearlong easing cycle after inflation came in lower-than-expected last month and the forint touched a six-week high against the euro. The National Bank of Hungary cut the benchmark rate by a quarter of percentage point to 6.75%, matching the median estimate of 25 economists surveyed by Bloomberg. (Bloomberg)

EU: Poland jobless rate falls to 4.9%. The unemployment rate in Poland decreased for the fourth straight month in June, figures from the statistical office showed. The unemployment rate dropped to 4.9% in June from 5.0% in May, in line with expectations. In the corresponding month last year, the unemployment rate was 5.1%. The number of registered unemployed people declined to 762,200 in June from 776,600 in the previous month. The number of unemployed young people under the age of 24 dropped to 92,900 in June from 95,800 in the previous month. (RTT)

UK: Bank of England plans expanded repo facilities to avert money market crunch. The Bank of England said that banks should get ready to make greater use of its repo facilities as it sells down its government bond holdings, and that it plans a major expansion of its current six-month repo operation. Repos, or repurchase agreements, allow banks to temporarily swap bonds and other collateral they own for cash from the central bank, helping to keep market interest rates in line with the bank's policy rate. (Reuters)

India: Trims fiscal deficit target, rupee hits record low on capital gains tax hike. Sticking to the commitment of fiscal consolidation, India's Finance Minister Nirmala Sitharaman unveiled a budget that aims to provide impetus to job creation, startups and small enterprises, while proposals for raising the tax rates on capital gains damped market sentiment and send the rupee to a record low. (RTT)

Taiwan: Industrial output grows sharply, retail sales rise further. Taiwan's industrial production expanded strongly for the fourth successive month in June, preliminary data from the Ministry of Economic Affairs showed. Separate official data showed that retail sales expanded at a slightly faster pace in June. Industrial production advanced 13.23% YoY in June, slower than the 15.73% surge in May. (RTT)

South Africa: Leading index falls in May. South Africa's composite leading index decreased in May after improving in the previous month, survey data from the South African Reserve Bank showed. The composite leading index dropped 1.0% MoM to 111.9 in May from 113.0 in April. Compared to a year ago, the index climbed 2.0%, versus an increase of 1.8% in the prior month. In May, seven out of ten of the component time series decreased, while the remaining three strengthened, the survey said. (RTT)

Markets

IOI Properties: Buys PJ mall for RM680m. IOI Properties Group is purchasing Tropicana Gardens Mall in Petaling Jaya for RM680m, in addition to three other acquisitions over the past eight months. The four deals total about RM1.2bn, with the group saying the addition of Tropicana Gardens Mall is in line with its growth strategy and will strengthen its footprint in the retail industry, providing it with a platform to leverage its expertise. The agreement for the mall was signed between IOIProp’s whole unit IOI Mall Damansara SB and Tropicana Indah SB. (StarBiz)

YTL: Acquires NSL stake for RM792m. YTL Corp’s subsidiary YTL Cement has entered into a conditional sale and purchase agreement (SPA) with 98 Holdings Pte Ltd for the proposed acquisition of shares in NSL Ltd for SGD227.6m (about RM792.3m) in cash. YTL Corp said the SPA involved the proposed acquisition of 303.5m shares in NSL, representing about 81.2% equity interest. The acquisition provides a unique opportunity for YTL Corp’s expansion via YTL Cement and its subsidiaries into the industrialised building system sector in Malaysia, Dubai, Finland and Singapore. (StarBiz)

Uzma: Secures RM19m contract for infill well preparation services in Thailand. Uzma said on that its Thai unit has secured a RM19m contract to provide infill well preparation services for offshore platforms. The one-year contract, awarded by PTTEP Energy Development Company Ltd to Uzma's subsidiary MMSVS Group Holding Co Ltd Thailand, is valid until 15 July 2025, according to Uzma's bourse filing. The scope of work includes providing hydraulic workover unit equipment and services for infill well preparation on up to six of PTTEP’s offshore platforms in the Gulf of Thailand. (The Edge)

Advancecon: Bags mining services job from Imerys Minerals in Johor. Advancecon Holdings has inked a mining services agreement with Imerys Minerals Malaysia SB. The company said its 51% indirect subsidiary Spring Energy SB will provide a wide range of mining services, which include quarry development and maintenance, drilling and blasting, marble handling and processing, waste management, and environmental protection measures, at the quarry site in Gunung Terundum, Johor. (The Edge)

T7 Global: Wins Pteronas Carigali job. T7 Global’s wholly owned subsidiary, Tanjung Offshore Services SB, has received a LOA from PETRONAS Carigali SB (PCSB) for the provision of a lowcost jack-up drilling rig for the Petronas Carigali Plug and Abandonment Programme. T7 Global said PCSB will pay Tanjung Offshore in accordance with the contract price as specified in the LOA. The award will have no effect on the total issued share capital and shareholdings of the substantial shareholders of the company for the financial year ending 31 Dec 2024. (StarBiz)

Varia: Bags subcontract worth RM555m, sending shares to near eight-month high. Varia said it had secured a construction subcontract worth RM555m, sending shares in the company formerly known as Stella Holdings to their highest in nearly eight months. Under the subcontract, Varia will supply labour, plants, materials, equipment, tools, transport, temporary works and ancillary needed to build a sewage treatment plant in Penang. The contract is for a period of 57 months and expected to complete by 24 March 2029, the company said. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after US stocks held relatively steady in a calm Tuesday on Wall Street, as earnings reporting season ramped up for big companies. The S&P 500 slipped 8.67 points, or 0.2%, to 5,555.74. The Dow Jones Industrial Average edged down by 57.35, or 0.1%, to 40,358.09, and the Nasdaq composite dipped 10.22, or 0.1%, to 17,997.35. But the smaller stocks in the Russell 2000 continued their big run and rose 1%. They’ve flipped the market’s leaderboard recently and zoomed higher amid hopes for coming cuts to interest rates. The mixed trading came as dozens of companies reported their results for the spring, with the headliners of Alphabet and Tesla coming after trading closed for the day. In stock markets elsewhere, indices were mixed across Asia and Europe. Chinese markets were some of the weakest, and stocks fell 0.9% in Hong Kong and 1.6% in Shanghai as moves by China’s central bank to cut two key interest rates on Monday as not particularly inspiring. Back home, the FBM KLCI ended higher by 0.47% to 1629.68.

Source: PublicInvest Research - 24 Jul 2024