HEADLINES

Economy

US: Real US household income rose in 2023 for first time in four years. US inflation-adjusted household income increased 4% last year, the first annual gain since 2019, as price increases moderated. The median income last year was USD80,610 (RM351,173) compared with USD77,540 in 2022, according to the Census Bureau’s annual report. (Bloomberg)

US: Small business sentiment ebbs in Aug amid rising uncertainty. US small-business confidence fell in Aug, reversing the prior month's jump amid growing uncertainty ahead of the Nov 5 presidential election and expectations of weak sales. The National Federation of Independent Business (NFIB) said its Small Business Optimism Index dropped 2.5 points to 91.2 last month. The index had surged in July to the highest reading since Feb 2022. The survey's Uncertainty Index increased two points to 92, the highest since Oct 2020. Economists, however, cautioned against reading too much into the ebb in sentiment and rise in uncertainty. (Reuters)

EU: German inflation slows as estimated. Germany's consumer price inflation weakened, as initially estimated, in Aug due to falling energy prices, final data from Destatis showed. Consumer price inflation softened to 1.9% in Aug from 2.3% in July. The rate matched the provisional estimate published on Aug 29. The last time inflation was below 2% was in March 2021, when the rate was 1.8%. EU harmonized inflation also softened to 2.0%, as estimated, from 2.6% in July. A similar rate was last reported in March 2021. The decline in energy prices deepened to 5.1% from 1.7% in the previous month. (RTT)

UK: Labor market cools in July. The UK unemployment rate dropped in the three months to July and the wage growth softened to a two-year low, signalling that the labor market conditions continued to cool, official data revealed. The unemployment rate fell to 4.1% in the three months to July from 4.2% in the preceding period, data published by the Office for National Statistics showed. The rate came in line with expectations. Annual growth in average earnings, excluding bonuses, was 5.1% in the three months to July, as expected, but weaker than the 5.4% posted in the prior period. This was the weakest since 2022. Earnings including bonuses climbed 4.0% from a year ago, following a 4.6% rise in three months to June. (RTT)

China: Exports up solidly but slowing imports dim trade outlook. China's exports grew at their fastest pace in nearly 1-1/2 years in Aug, suggesting manufacturers are rushing out orders ahead of tariffs expected from a growing number of trade partners, while imports disappointed amid weak domestic demand. The mixed trade data highlights the challenge facing Beijing as policymakers try to bolster overall growth without becoming too reliant on exports, especially given the tightening of consumers' purse strings. China's economy has failed to fire over the past year amid a prolonged property sector downturn, and a survey last week showed exports in the doldrums and factory gate prices at their worst in 14 months, pointing to producers slashing prices to find buyers. (Reuters)

Japan: BOJ said to see little need to hike key rate next week. Bank of Japan (BOJ) officials see little need to raise the benchmark rate when board members gather next week, as they are still monitoring lingering volatility in financial markets and the impact of the July hike, according to people familiar with the matter. The BOJ is likely to keep borrowing costs unchanged at 0.25% at the Sept 20 conclusion of its two-day gathering, according to the people. The bank needs to carefully monitor financial markets given recent ructions that include the Nikkei 225’s biggest plunge in history on Aug 5, just days after the central bank raised its rate, the people said. Most economists surveyed after the sharpest market moves in August expect the central bank to wait until Dec or Jan before raising rates again. (Bloomberg)

Markets

Chin Hin and Atlan: To develop RM478m Johor Bahru project. Chin Hin Group Property is partnering with Atlan Holdings on a high-rise project in Johor Bahru, with a gross development value of RM478.42m. The project will feature two blocks of serviced apartments, 1,260 residential units, 10 retail lots, and multi-storey car parks on a 4.29-acre site. Atlan’s subsidiary, Kelana Megah SB, will hold an 18% share of the project’s net saleable area. (The Malaysian Reserve)

HE Group: Bags RM30.6m semiconductor jobcentre. HE Group has secured a contract worth RM30.6m for the proposed semiconductor manufacturing plant construction at the Ulu Klang free trade zone here. The electrical engineering service provider said its subsidiary Hexatech Engineering Sdn Bhd had accepted a letter of award from an engineering, procurement and construction contractor to undertake the works of a 132kV powerhouse. "The company will commence the works contract upon execution of the letter of award and is expected to be completed by 1 July 2025," HE Group said. (Business Times)

Magma: Receives go-ahead to raise RM100m. Magma Group has received the green light from shareholders at its EGM for its proposed issuance of redeemable convertible notes (RCN) aimed at raising up to RM100m. It said the move is expected to strengthen Magma’s financial standing and support the company’s long-term growth objectives across its core business segments. According to Magma, the funds raised from the issuance will be allocated towards bolstering the company’s working capital requirements, modernising hotel facilities through refurbishment and upgrades, expanding business ventures, and repaying existing financing facilities. (The Star)

ITMAX: Executive director offloads 6% stake for RM201m, ceases to be substantial shareholder. ITMAX System Bhd’s nonindependent executive director Datin Afinaliza Zainal Abidin has ceased to be a substantial shareholder of the smart city integrated system solution provider after disposing of 61.9m shares. Afinaliza, through her private vehicle Ganda Sensasi SB, sold the block of shares in off-market transactions on 6 Sept for over RM201.1m, according to ITMAX. The identity of the buyer was not disclosed. (The Edge)

Globetronics: Reassures stability after auditor resignation. Globetronics Technology Bhd has provided reassurance to investors that its operations will remain unaffected following the resignation of its auditors, KPMG PLT. The company’s share price experienced a steep decline of 32.5%, closing at 54 sen, while its substantial shareholder, APB Resources, also saw a drop in its stock price. APB Resources holds a 10.36% stake in Globetronics and had acquired shares at a premium earlier this year. (The Malaysian Reserve)

Dataprep: Teams up with a Japan-based firm for ICT collaboration. Dataprep Holdings is collaborating with Neoreka Asia Sdn Bhd, a subsidiary of NEOJAPAN Inc, a Tokyo-listed firm, as strategic partners in information and communications technology (ICT). According to Dataprep, the collaboration includes the appointment of Dataprep as an authorised reseller of DESKNET’s NEO, a web-based groupware platform designed to serve as the information sharing foundation for enterprises. (The Edge)

MARKET UPDATE

The FBM KLCI might open flat today after US stocks drifted to a mixed finish on Tuesday following several weeks of sharp swings. The S&P 500 rose 0.4% to pull within 3% of its record set in July. It flipped between small gains and losses through the day, but the moves were nothing like its careens since the summer, driven by worries about the slowing US economy and whether coming cuts to interest rates will keep it out of a possible recession. The Dow Jones Industrial Average fell 92 points, or 0.2%, and the Nasdaq composite rose 0.8%. The Fed is turning its focus away from stifling high inflation and toward protecting the economy. The debate on Wall Street is now focused on how much the Fed will cut the federal funds rate, which has been sitting at a two-decade high, and whether the easing will ultimately prove to be too late to prevent a recession. Reports coming this week on inflation could influence the size of the Fed’s upcoming cuts. The worst case for the Fed would be if inflation were to reaccelerate when the job market is weakening, because helping either of those would require opposing moves. On Wednesday, though, economists expect the latest report on inflation to show prices for US consumers were 2.6% higher in August than a year earlier. That would be a slowdown from July’s inflation rate of 2.9% In stock markets elsewhere, indices fell in much of Europe after finishing mixed in Asia. Stocks rose 0.2% in Hong Kong and 0.3% in Shanghai after China’s customs office reported the country’s exports grew for a fifth consecutive month, in a sign of growing demand abroad. Back home, the FBM KLCI added 8.86 points or 0.54% to 1660.35.

Source: PublicInvest Research - 11 Sept 2024