HEADLINES

US: Home-price gains outpace inflation with 5.4% annual increase. Home-price gains in the US slowed in June as buyers pulled back from the market while listings started to climb. A national measure of prices rose 5.4% from a year earlier, according to data from S&P CoreLogic Case-Shiller. That compares with a 5.9% annual increase in May. While listings are ticking up, house hunters are still struggling to find affordable properties. But thanks to high mortgage rates, there aren’t enough buyers in the market to create the level of competition that would drive prices up more significantly. (Bloomberg)

US: Mortgage rates drop again to lowest level since April 2023. US mortgage rates fell again last week to the lowest level since April 2023, spurring a modest pickup in applications to buy a home. The contract rate on a 30-year fixed mortgage eased for a fourth week to 6.44%, the longest stretch of declines this year, according to Mortgage Bankers Association data. That provided a small boost to home-purchase applications in the week ended Aug 23 after a sizeable drop in the prior period. (Bloomberg)

EU: Private sector credit growth rises in July. Eurozone private sector credit increased in July but the pace of growth remained weak as high interest rate continued to weigh on borrowing, official data revealed. Adjusted loans to the private sector expanded 1.3% from a year ago in July, faster than the 1.1% rise in June, the ECB reported. Among the borrowing sectors, loans to households grew at a faster pace of 0.5% in July after a 0.3% rise in June. Meanwhile, growth in loans to non-financial corporations slowed slightly to 0.6% from 0.7% in the prior month. Further, data showed that claims on the private sector gained 0.8%, the same rate as seen in June. (RTT)

EU: French consumer confidence strongest since early 2022. French consumer confidence improved in August to the highest point since the start of the war in Ukraine, survey results published by the statistical office INSEE showed. The consumer confidence index rose to 92 in Aug, in line with forecast, from 91 in July. This was the highest since Feb 2022. Nonetheless, the score remained below its long-term average. The survey showed that households were less negative about future and past standard of living. (RTT)

Japan: BOJ deputy governor sees rate hike justified if outlook realised. Deputy governor Ryozo Himino said the Bank of Japan (BOJ) will raise interest rates as long as inflation moves in line with the bank’s view, underscoring the central bank’s essentially unchanged stance following ructions in the financial markets earlier in the month. The BOJ’s basic stance “is that it will examine the impact of market developments and the July rate hike”, Himino said. “If it has growing confidence that its outlook for economic activity and prices will be realised, it will adjust the degree of monetary accommodation.” (Bloomberg)

Australia: Inflation eases in July. Australia's consumer price inflation moderated in July on energy rebates, official data showed. The monthly consumer price index indicator posted an annual increase of 3.5% in July, following June's 3.8% rise, the Australian Bureau of Statistics reported. Inflation was forecast to ease to 3.4%. Excluding volatile items and holiday travel, the monthly CPI indicator gained 3.7%, weaker than June's 4.0% rise. (RTT)

Markets

IOI Properties: Turns down offer to buy Shenton House from CEO but will manage its redevelopment. IOI Properties Group has declined the offer to purchase Singapore commercial property Shenton House from its CEO and major shareholder Lee Yeow Seng. However, subsidiaries of IOI Properties have been appointed to be the sole project manager and property manager for the redevelopment of the commercial property. Shenton House was acquired by Lee’s private vehicle Shenton 101 Pte Ltd in a tender for SGD538m (RM1.9bn). It was the sole bidder. (The Edge)

SkyWorld: To pay PR1MA RM32m for development rights in Brickfields. SkyWorld Development will pay Perbadanan PR1MA Malaysia (PR1MA) RM32.17m for the development rights to build 491 affordable housing units in Brickfields. SkyWorld, through its wholly owned subsidiary Aspirasi Cekap SB (ACSB), received a letter of acceptance (LOA) from PR1MA to undertake the project. A joint development agreement will be inked between ACSB and PR1MA within 60 days from the LOA or another date set by PR1MA. PR1MA, an affordable housing agency under the Ministry of Housing and Local Government, will provide the land for the development. SkyWorld will finance and complete the project using its own funds. (The Edge)

Paramount: To launch projects with RM700m GDV in 2H. Paramount Corp aims to launch four more projects in the 2HFY24, including new phases of existing developments, with a projected gross development value (GDV) of RM700m, according to group CEO Jeffrey Chew. Expected launches in the 3QFY24 include Greenwoods Salak Perdana Senna in Sepang, featuring semidetached cluster townhouses. The group’s property launches in the 1HFY24 exceeded RM886m, more than double the value of launches in 2023. The total RM1.7bn in launches by June 30, comprising RM81m in 1Q24 and RM1.6b in 2Q24, will drive strong sales and positively impact the group’s financial performance. (StarBiz)

Sentoria: Maintains CEO Loh Yuen Tuck repudiated his own service contract as it confirms his departure. Sentoria Group has confirmed the departure of its chief executive officer Datuk Loh Yuen Tuck from the company via a bourse filing. It also maintains that it does not accept Loh's constructive dismissal claim, saying it was Loh who repudiated his own service contract. In a bourse filing, Sentoria acknowledged the ongoing dispute between the company and Loh as it announced that Loh considers himself to have been terminated due to constructive dismissal which we do not accept and take issue with. (The Edge)

IPO: Solar District to raise RM45.09m from IPO. Solar District Cooling Group plans to raise RM45.09m through its initial public offering (IPO) upon listing on Bursa Malaysia's ACE Market on Sept 19. This will be through the issuance of 118.67m shares at 38 sen each. Of the total proceeds, RM1.90m will be allocated for the expansion of its headquarters in Kajang, Selangor, while RM5m for tender bonds and/or performance bonds for future projects. A total of RM18.70m will be used for the purchase of materials for building management system (BMS) segment, and solar thermal systems and energy-saving services segment, and RM12.67m for general working capital. (BTimes)

MARKET UPDATE

The FBM KLCI might open weaker today after stocks on Wall Street closed lower Wednesday as a pullback in big technology companies outweighed gains elsewhere in the market. The S&P 500 fell 0.6%, weighed down by drops in Nvidia, Apple, Microsoft and Amazon. About 56% of the stocks in the benchmark index finished in the red. Tech sector stocks include many companies with outsized values that tend to lean more heavily on the index. The Dow Jones Industrial Average, which was coming off two consecutive all-time highs, fell 0.4%. The Nasdaq composite, which is heavily weighted with technology stocks, closed 1.1% lower. The selling came ahead of an eagerly anticipated earnings report from the semiconductor company Nvidia, whose chips power AI applications. The company is one of the most influential stocks on Wall Street, with a total market value topping $3trn. Elsewhere, markets were mostly lower in Europe and mixed in Asia. Bursa Malaysia defied the regional downturn with the benchmark index climbing 1.39%% at the close on stronger corporate earnings, particularly in the banking sector. Meanwhile, regional bourses were in a selling mode amid sluggish performance on Wall Street overnight, with Singapore’s Straits Times Index dropping 0.22%, Hong Kong's Hang Seng shedding 1.02% and Japan’s Nikkei added 0.12%.

Source: PublicInvest Research - 29 Aug 2024