HEADLINES

Economy

US: Housing inflation likely to fall in year ahead, Fed paper says. US housing inflation is likely to ease in the coming year as the gap between supply and demand for homes narrows, by the Federal Reserve Bank of San Francisco. That decline will likely add to downward pressure on inflation, the researchers said in the regional Fed bank's latest Economic Letter. In recent months housing inflation has come down, but it remains well-above prepandemic levels and continues to account for a large share of overall inflation. (Reuters)

US: Manufacturing mired in weakness; construction spending falls. US manufacturing contracted at a moderate pace in August amid some improvement in employment, but a further decline in new orders and rise in inventory suggested factory activity could remain subdued for a while. The survey from the ISM also showed manufacturers continuing to pay higher prices for inputs last month. It did not change expectations that the Federal Reserve will cut interest rates by 25bps when it kicks off its long awaited easing cycle this month. (Reuters)

EU: Swiss economic output boosted by Olympics, European football championships. The Swiss economy grew by 1.8% in the second quarter, boosted by income from the Paris Olympics and the European football championship as well as higher pharmaceuticals and chemical production. The annual increase beat Reuters forecasts for 1.4% as broadcast revenues from both sporting events almost doubled GDP generated in the arts, entertainment and recreation. (Reuters)

UK: Summery weather helps boost consumer spending, surveys show. British consumer spending increased modestly in annual terms during August, fuelled by spending on food and drink during summery weather that added to signs of steady economic growth in the second half of 2024. Barclays said consumer spending on its credit and debit cards rose by 1.0% YoY in August, bucking two months of decline. (Reuters)

UK: British home price rises to outpace inflation, but affordability to improve: Reuters poll. British home prices will make solid gains in the next two years, outpacing overall inflation, but affordability for first-time buyers is likely to improve based on expectations for lower borrowing costs, a Reuters poll of housing market experts forecast. Home values would rise 2.5% this year and then 3.0% in 2025 and 4.0% in 2026, the Aug. 19-Sept. 3 poll of 21 analysts predicted, largely unchanged from a May survey. (Reuters)

India: World Bank urges to boost labour-intensive exports for jobs. India should focus on labour-intensive exports to boost employment, The World Bank said on Tuesday, noting that the country's manufacturing industry has not fully seized opportunities from China's exit from these sectors. "India should also try to conquer less advanced markets," said Auguste Tano Kouame, World Bank country director, during the release of the "India Development Update" report. He said there was a lot of untapped demand for Indian goods, such as textiles and footwear in Africa and Latin America. (Reuters)

Markets

AWC: Gets RM20m job from Gamuda. AWC has accepted a letter of award from Gamuda Engineering SB for the construction of water harvesting and sewerage services among others in Gombak, Selangor, worth RM19.9m. AWC said the sub-contract was secured by its wholly-owned subsidiary, Qudotech SB, adding that works would commence from Sept 2, 2024 and completed by Nov 18, 2025. “The sub-contract works are in the ordinary course of business of Qudotech. “The potential risks involved in these subcontract works are considered normal operational risks and are the same with any other works of such nature undertaken.” (StarBiz)

Solarvest: Bags RM113m EPCC job for 30MW solar plant in Pahang. Solarvest Holdings has secured a RM113.3m contract from P Solar SB to construct a 30MW solar plant in Pekan, Pahang. Solarvest's unit Atlantic Blue SB is expected to complete the project within 18 months from the date of acceptance of the letter of award. The project was awarded to P Solar, a 70%-owned unit of Malaysian Renewable Energy Group SB, under the Corporate Green Power Programme (CGPP) awarded by the Energy Commission. (The Edge)

Euro Holdings: Court strikes out RM19m suit against Euro Holdings. Euro Holdings said the High Court struck out the lawsuit filed by Surian Creation SB against the furniture maker and its former managing director Datuk Seri Lim Teck Boon. Euro Holdings said the court struck out the suit filed in Melaka last year with costs. Surian had sought a payment of RM19.3m from the defendants, which included Euro Holdings' subsidiaries Eurosteel Line SB, Euro Space Industries (M) SB and Euro Space System SB. (The Edge)

Wellcall: Buys land in Ipoh for RM32m. Wellcall Holdings is acquiring three parcels of leasehold land in Ipoh, Perak for RM32m. The group said the three parcels, with a total land area of 18.31 acres, are located within the vicinity of its existing manufacturing facilities in Kawasan Perindustrian Pengkalan II. The lands are expected to facilitate future expansion and provide the group with the flexibility to be able to plan ahead for any expansion of its operations without land space constraints. (The Edge)

Malaysia Marine and Heavy Engineering: Teams up with HD Hyundai for green retrofit related works. Malaysia Marine and Heavy Engineering said it has entered into a partnership with HD Hyundai Marine Solution Co Ltd (HD HMS) to serve as the South Korean marine aftermarket engineering and technology company's partner in undertaking work related to green retrofit solutions. MHB's wholly-owned subsidiary, Malaysia Marine and Heavy Engineering SB (MMHE), has signed a two-year MoU with HD HMS, with an option to extend for an additional two years. (The Edge)

Hexza: Buys 50,000 shares in chip designer giant Arm after selling stake in robotics firm Symbotic at a loss. Hexza Corp said it had acquired 50,000 shares in British semiconductor and software design giant Arm Holdings PLC for USD6.4m (RM29.5m), cash, with the intention of deriving dividend income and for potential capital gains. Hexza said that the shares were purchased in the open market on Nasdaq, funded by internal funds. The investment, Hexza added, was non-operational in nature and was undertaken mainly as an alternative to fixed deposits, money market financial products and unit trusts. (The Edge)

MARKET UPDATE

Malaysian market is expected to fall today, especially tech-related stocks following the decline in major markets overnight. US market fell sharply with the Dow Jones falling 1.5% to 40,936 while the Nasdaq tumbling 3.2% to 17,136 as investors assessed the weak ISM manufacturing data that reignited concerns over the state of the economy. Also, chipmaker Nvidia lost over 9% in regular trading, dragging other counterparts along with it. The company received a subpoena from the Department of Justice as part of an antitrust investigation. European stocks were not spared from the weakness. The German DAX fell 0.9% to 18,747, the French CAC 40 lost 0.9% to 7,575, and the FTSE 100 retreated by 0.7% to 8,298. Meanwhile, Asian stocks were mixed as investors awaited key US economic data that could influence the Federal Reserve's decisions on interest rates, amid ongoing concerns about the strength of China's economic recovery. Tokyo's Nikkei 225 closed little changed at 38,686, while the Hang Seng Index edged lower by 0.2% to 17,651, and the Shanghai Composite shed 0.3% to 2,802.

Back home, the FBM KLCI lost 1.54 points to close at 1,676.65. Solarvest has secured a RM113m contract from P Solar SB to construct a 30MW solar plant in Pekan, Pahang while Malaysia Marine and Heavy Engineering has entered into a partnership with HD Hyundai Marine Solution Co Ltd to serve as the South Korean marine aftermarket engineering and technology company's partner in undertaking work related to green retrofit solutions.

Source: PublicInvest Research - 4 Sept 2024