HEADLINES

Economy

US: Fed is about to get validation for its jumbo rate cut. The Federal Reserve’s preferred price metric and a snapshot of consumer demand are seen corroborating both the central bank’s aggressive interest-rate cut and Chair Jerome Powell’s view that the economy remains strong. Economists see the personal consumption expenditures price index rising just 0.1% in Aug for the second time in three months. The inflation gauge probably climbed 2.3% from a year earlier, the smallest annual gain since early 2021 and a shade higher than the central bank’s 2% goal. (Bloomberg)

UK: Debt hits 100% of GDP, adding to Rachel Reeves' headache. British government debt hit 100% of economic output for the first time in recent history and there was another large budget deficit last month, adding to the problems for finance minister Rachel Reeves as she readies her tax and spending plans. (Reuters)

UK: Retail sales beat expectations during Aug sunny spell. UK retail sales picked up pace in Aug, as consumers’ desire to take advantage of sunny weather and summer discounts offset gathering political and fiscal anxieties. The volume of goods sold in stores and online increased 1% after shoppers splashed out on food and clothing, the Office for National Statistics (ONS) said. The reading, which was stronger than the 0.4% increase expected by economists, follows a revised gain of 0.7% in the previous month. (Bloomberg)

China: August youth jobless rate rises to nine-month high. China's August youth jobless rate climbed to the highest level since last Dec, the statistics bureau said, as new graduates started to hunt for offers on the job market, adding to the pressure on policymakers to take action. The unemployment rate for 16-to-24- year-olds, excluding college students, rose to 18.8% last month, up from the 17.1% in July. Other economic indicators have shown economic growth momentum slowed in Aug, putting the country at risk of missing its annual growth target of around 5%. China resumed the publication of youth unemployment ratio last Dec after excluding college students from the survey pool. (Reuters)

Japan: BOJ keeps interest rate steady, upgrades view on consumption. The Bank of Japan (BOJ) kept interest rates steady and revised up its assessment on consumption, signalling its confidence a solid economic recovery will allow the central bank to raise interest rates again in coming months. Markets are focusing on any hints from Governor Kazuo Ueda on the timing and pace of future rate hikes at his post-meeting news conference. As widely expected, the BOJ kept short-term interest rates steady at 0.25% at a two-day meeting that ended. "Private consumption has been on a moderate increasing trend despite the impact of price rises and other factors," the BOJ said in a statement announcing the decision. (Reuters)

Hong Kong: Inflation steady at 2.5%. Hong Kong's consumer price inflation remained stable in Aug after rising in the previous three months, data released by the Census and Statistics Department showed. The consumer price index, or CPI, climbed 2.5% YoY in Aug, the same as in July, which was the highest inflation in eight months. Housing costs grew at a stable rate of 3.3% annually in Aug, while the price growth in electricity, gas, and water accelerated to 4.8% from 2.3% in July. Food prices showed a slower increase of 1.8%, while those for durable goods dropped by 0.9%. Netting out the effects of all the government's one-off relief measures, the underlying inflation also remained stable at 1.2%. The average monthly rate of increase for the 3-month period ending in Aug was 0.6%. (RTT)

Thailand: Cenbank chief says no need for rate cut now as govt pushes for easing. Thailand need not reduce interest rates immediately after the Fed eased policy as its economic outlook remains unchanged, the chief of its central bank said on Friday, while stressing its independence amid government pressure for a cut. Bank of Thailand (BOT) governor Sethaput Suthiwartnarueput also said reducing borrowing costs would not help the country's debt problems, pushing back at a government that contends the current policy rate is hamstringing its efforts to revive the stuttering economy. Thailand's key interest rate has been at 2.50% for a year, a decade-high, and the BOT has resisted calls for easing in an extended stand-off with the government as it struggles to kick-start an economy that grew just 1.9% in 2023 and is forecast to expand just 2.6% this year. (Reuters)

Markets

TNB (Outperform, TP: RM16): Signs agreement to supply another 100MW electricity to Singapore. Tenaga Nasional has inked an agreement with Singapore’s Keppel Electric Pte Ltd to supply up to 100MW of electricity to the island-state. Separately, the Malaysian utility company also signed a cross-border power trade interconnection agreement with SP Power Assets Ltd (SPPA) to ensure stable electricity transmission between Malaysia and Singapore. These agreements support Asean’s broader energy transition, prioritising interconnectivity and grid efficiency as the region faces growing energy demand. The 100MW supply agreement, it said, is part of the Lao PDR-Thailand-MalaysiaSingapore Power Integration Project (LTMS-PIP). (The Edge)

PTT Synergy: Snaps up RM11m Sepang factory, land from Sime Darby Property. Integrated construction and property company PTT Synergy has acquired a semi-detached factory, together with a piece of land, in Sepang from Sime Darby Property for RM11m. PTT Synergy’s wholly-owned subsidiary PTT Synergy SB entered into a sale and purchase agreement with Sime Darby Property (Serenia City) SB for the acquisition. The factory, identified as Type Cm, sits on 2,633.4 sqm of land in Pusat Perindustrian Serenia. (The Edge)

PBA Holdings: To complete three water pipeline projects over next two years. PBA Holdings said the group is undertaking three major pipeline projects in Penang, scheduled for completion in 2025 or 2026 at a total cost of RM189m. These pipelines will allow the group's subsidiary and Penang's water supply operator, Perbadanan Bekalan Air Pulau Pinang SB (PBAPP), to pump more water at higher pressures from the Sungai Dua water treatment plant, said PBA Holdings CEO Datuk K Pathmanathan. (The Edge)

Sunzen Biotech: Aims for RM18m from Shah Alam property sale. Sunzen Biotech plans to divest its land and factory in Kota Kemuning, Shah Alam, Selangor, with a market value estimated between RM16m and RM18m. Executive chairman Ching Chee Pun said the company aims to raise additional capital to support its subsidiaries' expansion in human health products (Ecolite) and financial services (Finsource Credit). The factory is valued at approximately RM16m to RM18m. (StarBiz)

Pharmaniaga: Plant to start ops in 2026. Pharmaniaga’s newly launched biopharmaceutical plant is expected to contribute 30% to 35% to gross profit margin for the 2026 financial year (FY26). The facility, located in Puchong here will be the first locally owned biopharmaceutical plant in Malaysia. Pharmaniaga managing director Zulkifli Jafar said the plant, which manufactures human insulin and vaccines, will commence operations in 2026. (StarBiz)

Solar District: Bags Avisena hospital job. Newly-listed Solar District Cooling Group has accepted two letters of award from Mitrajaya Construction SB. They are sub-contract works for one block of 11-storey hospital for Avisena Healthcare SB in Seksyen 14, Shah Alam valued at RM8.13m. Solar District is involved in the provision and maintenance of BMS, solar thermal systems and energy saving services. The company provides energy performance services to the concession companies that are providing hospital support services for public hospitals. (BTimes)

MARKET UPDATE

The FBM KLCI might open flat today after a record-setting week for Wall Street closed on a quieter note Friday, as US stocks drifted around the highs they hit during a worldwide rally the day before. The S&P 500 slipped 0.2% from its record, and the Nasdaq composite fell 0.4%. The Dow Jones Industrial Average, meanwhile, added 38 points, or 0.1%, to its all-time high. No economic releases were on the calendar for Friday to show where the economy may be heading. This week will have preliminary reports on US business activity, the final revision for how quickly the economy grew during the spring and the latest update on spending by US consumers. The S&P 500 ended this week at 5,702.55 after slipping 11.09 points. The Dow rose 38.17 to 42,063.36, and the Nasdaq fell 65.66 to 17,948.32. In stock markets elsewhere, indices slumped across much of Europe after rising in Asia. Tokyo’s Nikkei 225 rose 1.5% after the Bank of Japan left interest rates steady, as was expected. Back home, the FBM KLCI closed higher by 3.17 points or 0.19% to 1668.82.

Source: PublicInvest Research - 23 Sept 2024