HEADLINES

Economy

US: Job openings fall marginally; consumers' views of the labour market dimming. US job openings fell modestly in June and data for the prior month was revised higher, suggesting the labour market continued to gradually slow and was not in danger of rapidly weakening. Consumers' perceptions of the labour market are, however, deteriorating. A survey from the Conference Board showed the share of consumers who viewed jobs as "hard-to-get" rising to the highest level in more than three years. (Reuters)

US: Consumer confidence up on improved economic outlook. US consumer confidence rose in July as improving expectations for the economy and labour market offset bleaker views of current conditions. The Conference Board’s gauge increased to 100.3 from a downwardly revised 97.8 in June, data out showed. The median estimate in a Bloomberg survey of economists called for a reading of 99.7. A measure of expectations for the next six months climbed to 78.2 in July, the highest since Jan. The largest share of consumers since the start of the year expect better business conditions. Still, the group’s gauge of present conditions fell to the lowest in more than three years. Even with the monthly advance in the overall measure, confidence remains subdued and well below levels seen prior to the pandemic. (Bloomberg)

EU: Economy grows but outlook far from rosy. The euro zone's economy grew slightly more than expected in the three months to June, data showed, but a mixed underlying picture and a string of pessimistic surveys cloud the outlook for the rest of the year. The figures portray a bloc struggling to regain ground in global trade but continuing to enjoy a domestic rebound fuelled by higher real incomes and public spending. Output in the 20 countries that share the euro increased by 0.3% in the second quarter of the year, Eurostat data showed, keeping up the pace from the previous quarter and just ahead of economists' expectations. (Reuters)

EU: German inflation accelerates unexpectedly, casts doubt on ECB rate cut in Sept. Consumer price inflation in Germany unexpectedly increased in July and the core figure remained stubbornly high as well as way above the ECB's 2% target amid the persistence of sticky services inflation and cast doubts on the chances of an interest rate cut in Sept. The consumer price index rose 2.3% YoY following a 2.2% increase in June, preliminary figures from the statistical office Destatis showed. Economists had expected the inflation rate to remain unchanged. In May, the rate was 2.4%. Inflation, based on the harmonized index of consumer prices, climbed to 2.6% from 2.5% in June. Economists had expected the rate to slow to 2.4%. (RTT)

China: Vows to focus on consumption with growth target at risk. China’s ruling Communist Party pledged to make boosting consumer spending a greater policy focus, as weak domestic demand threatens the nation’s annual growth target despite an export boom. “The focus of economic policies needs to shift towards benefiting people’s livelihood and promoting spending,” senior leaders agreed at a meeting of the 24-member decisionmaking body led by President Xi Jinping, the official Xinhua News Agency reported. Officials also vowed to roll out a batch of new measures to support the economy at an appropriate time, without elaborating. (Bloomberg)

Japan: Bank of Japan to outline bond taper plan, debate rate hike. The Bank of Japan is expected to detail plans to taper its huge bond buying and debate whether to raise interest rates, signalling its resolve to steadily unwind a decade of massive monetary stimulus. The decision comes as the US Federal Reserve looks to cut interest rates, possibly as early as Sept, reversing an aggressive rate-hike cycle that drove up the dollar and caused a painful yen sell-off for Japan. At the two-day meeting ending on Wednesday, the BOJ will decide on a quantitative tightening (QT) plan that will likely halve monthly bond buying in 1-1/2 to two years' time - a pace roughly in line with broad market forecasts. (Reuters)

Markets

ITMAX: To operate smart parking in Kulai. ITMax System, via its subsidiary Southmax SB, has been appointed by Kulai Municipal Council as the smart-parking operator for Kulai area. In a statement, ITMAX said that under Phase 1, Southmax will operate the smart-parking system for 3,974 street parking bays across 28 locations in Kulai. The appointment, effective Aug 1, 2024, spans a duration of 15 years. Under a revenue-sharing model, Southmax will receive 70% of the revenue generated from parking collections and parking compounds through its application Parkmax@JOHOR. (StarBiz)

Advancecon: Wins RM38m Sime contract. Advancecon Holdings’ wholly-owned subsidiary, Advancecon Infra SB, has secured a RM38.3m contract from Sime Darby Property, marking its eighth earthworks contract for the Bandar Bukit Raja township. Advancecon said the contract encompasses the construction and completion of earthworks and ancillary works for Phase 4B (i17) of Stage 3 of the Bandar Bukit Raja township in Klang, Selangor. (StarBiz)

Awantec: Inks MOU with Nacsa to develop cybersecurity technologies. AwanBiru Technology, which provides technology and talent solutions software services, said it is teaming up with the country's cybersecurity regulator to develop new technologies in cybersecurity. The group signed a two-year memorandum of understanding (MOU) with the National Cyber Security Agency (Nacsa), Awantec said in a filing with Bursa Malaysia. The MOU, which expires on July 29, 2026, could be extended for another year if both parties agree. (The Edge)

TCS: Bags RM130m related-party contract to build apartments in Kuala Langat. Building and infrastructure construction company TCS Group Holdings has secured a RM130.15m contract to undertake the construction of serviced apartments in Selangor, in a related party transaction. The 630-unit serviced apartment project, known as Arcadia Residences, is located in the Kuala Langat district, the company said in a bourse filing. It said the threeyear contract was awarded by Saujana Permai Development SB, a wholly owned subsidiary of CDB Group Holdings SB. (The Edge)

Enra: Seeks mandate to sell vessel, to fund expansion or purchase of newer vessels. Oil and gas services firm Enra Group plans to sell its Ratu Enra ship for an indicative USD15m (RM70.06m), to capitalise on rising market value due to high demand in the industry. Enra will seek shareholders’ approval for the disposal of the chemical tanker to an external buyer to be identified, for at least 85% of its market value. The provisional market value of RM70m indicates pro forma after-tax gain of RM8.51m, Enra noted. (The Edge)

Bursa Malaysia: Will only shift its 'front office' to TRX, not entire operation, says chairman Wahid. Bursa Malaysia will only move its “front office” to the Tun Razak Exchange (TRX), not its entire operation, according to its chairman Tan Sri Abdul Wahid Omar. The front office, Wahid said, includes the stock exchange operator's marketing segment which will provide visibility and branding for Bursa Malaysia at TRX. Beyond that, “bulk of Bursa Malaysia’s operations will remain in the current headquarters,” he said. Wahid was the chairman of Permodalan Nasional when the fund manager was constructing the Merdeka 118, the world’s second tallest building. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after more drops for Big Tech stocks dragged on Wall Street Tuesday, overshadowing gains for much of the US stock market. The S&P 500 slipped 0.5%, even though two out of every three stocks within the index rose. The Dow Jones Industrial Average rose 203 points, or 0.5%, and the Nasdaq composite sank 1.3%. The Russell 2000 index of smaller stocks added 0.3% Tuesday to stretch its market-leading gain for the month to 9.5%. No one expects the Fed to cut interest rates this week, when it announces its decision on Wednesday. But the widespread expectation is that it will do so at its next meeting in September. Expectations for a soon-to-be easier Fed have sent yields tumbling in the bond market, and they eased further Tuesday. The yield on the 10-year Treasury fell to 4.14% from 4.17% late Monday and from 4.70% in April. In stock markets elsewhere, indices were mixed across Asia and Europe ahead of decisions by central banks there that could shake things up. Japan’s Nikkei 225 added 0.1% ahead of a meeting by the Bank of Japan, where the expectation is for an increase in interest rates. The FTSE 100 in London slipped 0.2% ahead of a decision by the Bank of England that could feature a cut in rates. Indices were stronger in continental Europe after a report indicated that economic growth was a touch stronger than expected in the second quarter among the 20 countries that use the euro currency, according to official figures released Tuesday by European Union statistics agency Eurostat. Back home, the FBM KLCI fell 12.62 points or 0.78% to 1,611.94 from Monday's close of 1,624.56.

Source: PublicInvest Research - 31 Jul 2024