HEADLINES

Economy

US: Housing starts plunge to four-year low in July. New residential construction in the US saw a steep drop in the month of July, according to a report released by the Commerce Department. The report said housing starts plunged by 6.8% to an annual rate of 1.238m in July after jumping by 1.1% to a revised rate of 1.329m in June. Economists had expected housing starts to slump by 1.7% to an annual rate of 1.330m from the 1.353m originally reported for the previous month. With the sharp pullback, housing starts tumbled to their lowest level since hitting an annual rate of 1.053m in May 2020. Single-family housing starts led the way lower, plummeting by 14.1% to an annual rate of 851,000 in July after edging down by 0.1% to rate of 991,000 in June. (RTT)

EU: Czech producer price inflation highest in 11 months. The Czech Republic's industrial producer prices increased at the fastest pace in nearly a year, figures from the Czech Statistical Office showed. The industrial producer price index rose 1.7% YoY in July, after a 1.0 increase in the previous month. Further, this was the quickest rate of increase since Oct 2023, when prices had risen 1.8%. (RTT)

EU: Eurozone trade surplus surges in June. The euro area trade surplus surged in June driven by the increase in surplus for machineries and vehicles, chemicals and other manufactured goods. The trade surplus rose to EUR22.3bn in June from EUR14.0bn in May, data published by Eurostat showed. This was well above economists' forecast of EUR 13.3bn. The statistical office said that the improvement reflects an increase of the surplus for machineries and vehicles by EUR 2.9bn and chemicals by EUR1.2bn. (RTT)

UK: Retail sales bounce back in July after discounts by department stores. UK retail sales bounced back in July after sunnier weather unleashed spending for department stores and sporting equipment following summer discounts. The volume of goods sold in stores and online in the UK rose 0.5% in July after a revised drop of 0.9% the month before. Economists had expected a 0.6% gain, but the drop in June was shallower than the 1.2% previously reported. (Bloomberg)

China: Faltering growth revives cash vouchers talk. Another round of bad Chinese economic figures is raising pressure on Beijing to loosen the fiscal spigot further and even dole out shopping vouchers to get growth back towards this year's target of roughly 5%. After a dismal second quarter, the world's secondlargest economy lost momentum further in July, new home prices fell at the fastest pace in nine years, industrial output slowed, export and investment growth dipped and unemployment rose. (Reuters)

Hong Kong: GDP growth improves as estimated in Q2. Hong Kong's economy expanded at an accelerated pace, as initially estimated in the second quarter, the latest data from the Census and Statistics Department showed. GDP advanced 3.3% YoY in the second quarter, faster than the 2.8% growth in the first quarter. That was in line with the flash data published earlier. On a seasonally adjusted QoQ basis, real GDP rose by 0.4%, following a 2.5% rise in the preceding three-month period, as estimated. (RTT)

Singapore: Non-oil domestic exports recover sharply in July. Singapore's non-oil domestic exports increased for the first time in six months in July, and at a faster-than-expected pace, data from Enterprise Singapore showed. Non-oil domestic exports surged 15.7% YoY in July, reversing an 8.8% decline in the previous month. The strong recovery in July was due to the growth in both electronics and non-electronics segments. (RTT)

New Zealand: RBNZ says rate-cut path could change on price, wage setting. New Zealand’s central bank wants to see wage and price setting continue to decline as it decides the appropriate pace of future interest rate cuts, assistant governor Karen Silk said. The Reserve Bank of New Zealand (RBNZ) this week began its easing cycle much earlier than previously signaled as the economy slumps and inflation slows. (Bloomberg)

Markets

Bumi Armada: Secures USD400m syndicated facilities to refinance RM1.5bn sukuk. Bumi Armada announced that its wholly owned subsidiary, Bumi Armada Holdings Labuan Ltd (BAHLL), has secured syndicated facilities with a six-year tenor at an aggregate principal amount of up to USD400m to refinance a RM1.5bn sukuk. The company said the facilities comprised a USD135m conventional syndicated term loan and a USD265m Islamic syndicated commodity Murabahah facility. "The proceeds are to be applied inter alia, towards the full redemption of the sukuk and its related cross currency and interest rate hedge liabilities,” it said. (StarBiz)

ITMAX: Bags RM539m DBKL contract for AI surveillance system. ITMAX System has secured a RM539m contract from DBKL to deploy its AI enhanced video surveillance system throughout the city. Under this contract, ITMAX said it will install 5,000 closed circuit cameras to complement the existing video surveillance infrastructure in KL. The contract spans 10 years, comprising a one-year installation phase followed by a nine-year subscription phase, it noted. (Bernama)

SBC Corp: To sell KL land for RM36m. SBC Corp has proposed to dispose of a piece of land measuring 8,962 sqm in KL for RM36m to MEGX Holdings SB. SBC said its indirect wholly owned subsidiary, Kiara East Property SB entered into a sale and purchase agreement with MEGX for the proposed land disposal, assuming the disposal is completed between the period of 1 April 2024 to 31 March 2025. SBC is expected to record a consolidated gain of approximately RM23.8m for the financial year ending 31 March 2025 from the disposal. (StarBiz)

LKL: Signs pact with Karl Group to explore hospital furniture manufacturing in Philippines. Medical bed manufacturer LKL International said it has signed a pact with Karl Group to explore opportunities and collaborate on manufacturing hospital furniture in the Philippines. Under MOU signed, LKL will be responsible for providing technical expertise and technology, supporting training and capacity building, and assisting in identifying potential investors and financial support, the company said. (The Edge)

MNRB: Posts higher net profit of RM92.2m in 1Q25. MNRB Holdings recorded a higher net profit of RM92.2m in 1Q25 from RM69.5m in 1Q24. It attributed the higher profit to the higher insurance service result driven by improved claims experienced compared to the corresponding period in the prior year. Revenue, however, was slightly lower at RM941.1m from RM945.3m amid the drop in insurance revenue from the family takaful business, which was offset by growth in general takaful and reinsurance businesses. (StarBiz)

MBSB: Mohamed Rafe appointed MBSB Bank’s new CEO effective 19 Aug. MBSB Bhd has appointed Mohamed Rafe Mohamed Haneef as MBSB Bank’s new CEO effective from 19 Aug 2024. It said that Mohamed Rafe who is currently MBSB’s Group CEO holds a Master of Laws from Harvard Law School and Bachelor of Laws (Hons) from International Islamic University, Malaysia. He received four professional qualification namely from Chartered Institute of Islamic Finance Professionals; Securities and Futures Authority (SFA); New York Bar; and Bar Council. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open higher today after Wall Street coasted to the close of its best week since November, as US stocks drifted a bit higher Friday. The S&P 500 rose 0.2% for a seventh straight gain and pulled back within 2% of its all-time high set last month. The Dow Jones Industrial Average gained 96 points, or 0.2%, and the Nasdaq composite added 0.2%. Treasury yields eased in the bond market following a couple mixed reports on the US economy. One showed homebuilders broke ground on fewer projects last month than forecast, which threw some cold water on the market. Optimism had been rising earlier in the week following a flurry of better-than-expected reports on everything from inflation to sales at US retailers. But a report later in the morning suggested US consumers are feeling better about the economy than expected. That’s a big deal for Wall Street because their spending makes up the bulk of the economy. In stock markets elsewhere, MSCI's main world stock index rose 0.5%, adding to its recovery from market turmoil last week generated by US recession fears and foreign exchange gyrations. The pan-European STOXX 600 index rose 0.3% on the day, still hovering at its two-week high and logging its best week since May 6, up 2.4%. Japan’s Nikkei 225 jumped 3.6% to cap its best week in more than four years. It was a strong rebound from its sharp losses the week before, which included the worst day for the Japanese stock market since the Black Monday crash of 1987. Back home, the FBM KLCI was 0.68%, or 10.96 points, firmer at 1,623.90 compared with Thursday’s close of 1,612.94.

Source: PublicInvest Research - 19 Aug 2024