HEADLINES

Economy

Global: Darkening global outlook, central bank pivots signal more turbulence. Growing signs of lacklustre growth and risks emerging to the job market overshadowed a gathering of global policymakers at the US Federal Reserve's annual Jackson Hole conference, highlighting the changing trajectory of monetary policy as US and European central banks eye cutting interest rates. (Reuters)

US: Business spending on equipment starts third quarter sluggishly. New orders for key US-manufactured capital goods unexpectedly fell in July and data for the prior month was revised lower, suggesting a loss of momentum in business spending on equipment that extended into the early part of the third quarter. The report from the Commerce Department also indicated that the manufacturing sector continued to tread water amid higher interest rates. While orders for long-lasting manufactured goods rebounded sharply last month, aircraft accounted for the increase. (Reuters)

EU: German business outlook lowest since Feb on weak economy. Germany’s business outlook held at its lowest level since Feb — highlighting the gloom once again engulfing Europe’s biggest economy after an early-year rebound fizzled out. The Ifo Institute’s expectations gauge dipped to 86.8 in Aug from a revised 87 the previous month, beating the 85.8 seen by analysts in a Bloomberg poll. (Bloomberg)

China: Central bank rolls over maturing loans, injects cash. China's central bank rolled over maturing medium-term loans and injected cash through its liquidity instruments, underlining market expectations for further easing as the economy struggles to gain traction. The PBOC said it was keeping the rate on CNY300bn (USD42.1bn or RM183bn) worth of one-year medium-term lending facility (MLF) loans to some financial institutions at 2.30%, unchanged from the previous operation. And it injected another 471 billion yuan through seven-day reverse repos while keeping borrowing costs unchanged at 1.70%. (Reuters)

Singapore: Industrial output rebounds unexpectedly. Singapore's industrial production increased unexpectedly in July after falling in the previous month, preliminary data from the Economic Development Board revealed. Industrial production rose 1.8% YoY in July, reversing a 4.3% fall in June. Meanwhile, output was expected to decline further by 1.1%. (RTT)

Markets

Tropicana: Sells land in Johor to Japan's NTT for RM383m. Tropicana Corporation's subsidiary Tropicana Firstwide SB is selling 27.7 hectares of freehold land in Gelang Patah, Johor Bahru to subsidiaries of Japan's NTT Data Group for RM383m. Tropicana said that the sale denotes its agility and capability to seize opportunities in the digital economy while complying with Malaysia's strict land requirements for data centre development. Tropicana said it has over 728 acres of premium landbank in Johor and will continue to build sustainable townships as well as look for strategic partners to jointly develop the land. (BTimes)

KUB: Unit sells 70% stake in KUB Sepadu for RM103.37m. KUB Agro Holdings SB (KUBAH), an indirect wholly-owned subsidiary of KUB Malaysia (KUB), has entered into a share purchase agreement (SPA) with Sinong Enterprise SB (SESB) for the disposal of 70% of KUBAH’s equity interest in KUB Sepadu SB (KUBS) for RM103.37m. KUB said in a stock exchange filing that the proposed disposal consists of 4.55m ordinary shares and is expected to be completed by the second quarter of 2025. (StarBiz)

Infraharta: Refutes Consortium Zenith's claims pertaining to Penang third link. Construction company Infraharta Holdings is refuting the allegations and reliefs sought by Consortium Zenith Construction SB (CZC) in a suit against its unit pertaining to issues related to the major roads and Penang third link (PMRT) project. According to IHB's bourse filing, CZC alleged that its payments amounting to RM13.12m made to IHB's wholly-owned subsidiary Infraharta SB (ISB) were tainted with fraud and deceit and that ISB is liable to return the same amount to CZC. (The Edge)

Texchem: Yuma Konishi is new Texchem CEO as Yap Kee Keong retires. Texchem Resources has redesignated its executive director Dr Yuma Konishi as the group CEO, following the retirement of Yap Kee Keong from the post. Yuma, who is the son of executive chairman Tan Sri Dr Fumihiko Konishi, joined the group back in 2005. Yuma has more than 19 years of experience in the plastics industries and almost a decade spearheading Texchem’s venture into the medical life sciences industry, the group said. Yuma holds a direct 0.09% stake in Texchem. (The Edge)

T7 Global: Bags RM74.6m job from Mindef. Energy solutions provider, T7 Global's subsidiary, T7 Kemuncak SB has secured a letter of award worth RM74.6m from Ministry of Defence Malaysia (Mindef). Under the contract terms, T7 Global will be responsible for supplying, delivering, testing and commissioning airfield surveillance radar (ASR) system, communication system, and associated air traffic management (ATM) system equipment to the Royal Malaysian Air Force (RMAF) and the government of Malaysia. (BTimes)

Globaltec: Australian unit makes cash call to raise AUS8.17m for Indonesian gas sales initiative. Globaltec Formation said its Australian-listed unit NuEnergy Gas Ltd is making a cash call to raise gross proceeds up to AUD8.17m (RM24.05m) to fund its early gas sales initiative in Indonesia. The funds will be raised via a renounceable pro-rata entitlement offer of up to 408.54m new shares in NuEnergy, on the basis of eight new shares for every 29 shares held by existing shareholders, at an issue price of AUD0.02 per share. The offer is partially underwritten by NuEnergy, in which Globaltec has a 64.66% stake. (The Edge)

MARKET UPDATE

The FBM KLCI might open with positive bias today after the Dow Jones Industrial Average climbed to an all-time high, even as big tech companies weighed on the broader market, leading US stock indices to a mixed finish on Wall Street. The S&P 500 fell 0.3% Monday, remaining within 0.9% of its record set in July. The Nasdaq composite fell 0.9%, pulled down by several technology companies that tend to tip the market because of their big values. Nvidia lost 2.2%, Microsoft fell 0.8%, Amazon dropped 0.9%, Meta Platforms slid 1.3% and Tesla lost 3.2%. The Dow rose 0.2%, to 41,240.52, eclipsing its previous high set in mid-July. The average is less influenced by big tech, with only Apple and Microsoft among the most valuable “Magnificent Seven” stocks in the index. That helped limit the impact of the big tech decliners. The key report for investors this week will come on Friday, when the government serves up its latest data on inflation with the PCE, or personal consumption and expenditures report, for July. It is the Federal Reserve’s preferred measure of inflation. Inflation has been steadily easing and economists polled by FactSet expect the latest PCE data to show a 2.6% inflation reading. The PCE was as high as 7.1% in the middle of 2022. Elsewhere, European shares ended slightly down, with trading subdued in the London market, which is closed for a public holiday. Japan's blue-chip Nikkei stock index also closed down almost 0.7% as the yen firmed. MSCI's World Index of stocks across the globe fell 0.20% to 829.64. Back home, Bursa Malaysia ended on a firm note in tandem with most regional peers, buoyed by the US Federal Reserve’s remarks on Friday which indicated a lean towards a more accommodative monetary policy. At the close, the FBM KLCI rose 3.22 points or 0.20% to 1,638.96 from Friday's close of 1,635.74.

Source: PublicInvest Research - 27 Aug 2024