HEADLINES

Economy

US: Producer prices inch up 0.1% in July, in line with estimates. Producer prices in the US crept higher in the month of July, according to a report released by the Labor Department. The Labor Department said its producer price index for final demand inched up by 0.1% in July after rising by 0.2% in June. The uptick by producer prices matched economist estimates. (RTT)

US: Small business confidence continues to improve despite inflation worries. Small business sentiment in the US strengthened to a 2.5-year high in July though inflation remained the top concern for businesses, the monthly survey results from the National Federation of Independent Business showed. The NFIB Small Business Optimism Index rose for the fourth month in a row in July, up 2.2pts to 93.7 from 91.5 in June. Economists had expected the reading to remain unchanged. The latest reading was the highest since February 2022, the NFIB said. (RTT)

EU: Spain inflation confirmed at 2.8%. Consumer price inflation softened in Spain as expected in July to the lowest level in five months, the latest data from the statistical office INE showed. Consumer price inflation eased to 2.8% in July from 3.4% in June. A similar lower rate was last reported in Feb. That was in line with the flash data published on 30 July. The annual price growth in housing eased to 3.2% in July from 5.1% in June, driven by a fall in electricity costs. (RTT)

UK: Pay growth drops to lowest in nearly 2 years, joblessness falls. British pay grew at its slowest pace in nearly two years, likely reassuring the BOE that inflation pressures are easing, and there was a surprise drop in unemployment, official figures showed. Average weekly earnings, excluding bonuses, were 5.4% higher than a year earlier in the three months to the end of June, down from 5.8% in the three months to May and the lowest since Aug 2022, the Office for National Statistics said. However, the jobless rate fell from 4.4% to 4.2%, its lowest since Feb. (Reuters)

Japan: Wholesale inflation quickens to fastest in nearly a year. Japan's wholesale inflation accelerated in July, with the pace of YoY growth the fastest in 11 months, as a weak yen pushed up commodity import bills that were already high. The CGPI, which measures the price companies charge each other for goods and services, rose 3% in July from a year earlier, BOJ data showed, matching a median market forecast. (Reuters)

Australia: Elevated wages, consumer mood reinforce RBA Signal. Australia’s elevated wage growth and improved consumer confidence after a fiscal injection highlight price pressures in the economy and reinforce the Reserve Bank’s view that interest-rate cuts remain some way off. The Wage Price Index rose an annual 4.1% in the three months through June, matching its first quarter reading, according to government. (Bloomberg)

Singapore: Sees 2024 GDP growth at upper half of forecast. Singapore said it expects the island’s economy to expand between 2% and 3% this year, narrowing the forecast on a resilient external demand outlook despite lingering risks. The updated growth view from the Ministry of Trade and Industry was published along with final 2Q GDP numbers, which showed expansion during the period matched the pace estimated initially. GDP grew 0.4% in the three months through June from the previous quarter. (Bloomberg)

Markets

Uzma: PETRONAS capex cut has less impact. Any potential cut in Petroliam Nasional (PETRONAS) capital expenditure (capex) will have “less impact” on a brownfield player like Uzma Bhd, says group CEO Datuk Kamarul Redzuan Muhamed. “We heard that there is a cut in spending by PETRONAS, which will obviously impact some industry players. “However, Uzma’s oil and gas (O&G) activities are in the brownfield sector which focuses on operations. (The Star)

Signature International: To dispose of Techpark Lands for RM25.7m. Signature International’s wholly owned subsidiary Signature Realty SB plans to dispose of two pieces of vacant freehold land in Negeri Sembilan for RM25.7m. The company said the lands are located within an industrial park in Bandar Baru Enstek called Techpark @ Enstek Phase 2. “The proposed disposal will also realise an estimated gain on disposal of RM3.71 million. A part of the proceeds will be utilised for repayment of intercompany loans. (Bernama)

FGV: Reaffirms bonus issue plan pending government approval. FGV Holdings has reaffirmed its intention to proceed with a bonus issue, pending government consent for its controlling shareholder, Federal Land Development Authority (Felda), to move forward. Felda, which owns an 81.9% stake in FGV, is awaiting approvals from the Ministry of Finance and the Prime Minister’s Department. The proposed bonus issue involves issuing 364.82m new FGV Islamic redeemable preference shares (RPS-i) on a onefor-10 basis, aimed at reducing Felda’s stake to comply with public shareholding spread requirements. (The Malaysian Reserve)

Minetech: Wins RM36.79mil sewage job in Terengganu. Minetech Resources’ subsidiary Coral Evergreen SB has secured a contract worth RM36.79m from Puncak Utara SB for sewage system upgrade in Wilayah Ketengah, Terengganu. The project entails the enhancement of the sewage system and associated infrastructure in the Ketengah Jaya, Bukit Besi, and Seri Bandi areas. The project is set to begin on 29 July with completion anticipated by 13 June 2027. Minetech executive chairman Abang Abdillah Izzarim said with Ketengah being a respected government agency, the project not only strengthens the company's portfolio but also enhances its credibility in the industry. (Business Times)

Tex Cycle: 2Q net profit halves to RM2.51 mil. Tex Cycle Technology saw its net profit halved to RM2.51m in the second quarter ended June 30, 2024 (2QFY2024) from RM5.07m a year earlier, due to the absence of fair value gains on quoted securities and unit trusts, as well as unrealised foreign exchange gains. Its revenue for the quarter declined 2.57% to RM8.26m compared to RM8.47m previously, Tex Cycle's bourse filing showed. No dividends were declared for the quarter. (The Edge)

Seng Fong: Sees five-fold rise in 4Q net profit on higher sales, reduced diesel costs. Seng Fong Holdings Bhd said its net profit jumped by more than five folds to RM16.5m in its fourth quarter ended 30 June 2024 (4QFY2024), from RM2.98m a year earlier, driven by higher sales volume coupled with reduced diesel costs following the operation of both biomass systems. Earnings per share rose to 2.29 sen from 0.41 sen. Revenue increased 38.7% to RM331.3m from RM238.8m in 4QFY2023, primarily due to higher contributions from the processing segment.

MARKET UPDATE

The FBM KLCI might open higher today as US stocks rallied Tuesday to one of their best days of the year after the first of several highly anticipated reports on the economy this week came in better than expected. The S&P 500 jumped 1.7% for its third-best day of 2024 after the US government reported inflation at the wholesale level slowed last month by more than economists expected. The Dow Jones Industrial Average rose 408 points, or 1%, and the Nasdaq composite clambered 2.3% higher. High inflation has been the scourge of shoppers and financial markets for years. It finally looks to be slowing enough to get the Federal Reserve to ease up on high interest rates, which the Fed has been keeping at economycrunching levels in order to stifle inflation. In stock markets elsewhere, indices were modestly higher across much of Europe and Asia. Japan’s Nikkei 225 was an outlier and jumped 3.4%.

Back home, Bursa Malaysia stayed in the negative territory for most of the day in listless trading but eked out slight gains at closing in line with the regional market trend. At the closing bell, the FBM KLCI rose by 0.17% or 2.86 points to its intraday high of 1,609.52 from Monday’s close of 1,606.66.

Source: PublicInvest Research - 14 Aug 2024