Economy

US: Weekly jobless claims highest in more than eight months. The number of Americans filing new claims for unemployment benefits rose last week to the highest level in more than eight months, further evidence that the labour market was cooling. The weekly jobless claims report from the Labor Department, the most timely data on the economy's health, followed news last week that the economy added the fewest jobs in six months in April, while job openings dropped to a three-year low in March. Ebbing labour market momentum has put two interest rate cuts from the Federal Reserve this year back on the table. (Reuters)

UK: Bank of England holds rate for sixth straight time. The Bank of England maintained its key policy rate for the sixth consecutive meeting. The Monetary Policy Committee decided to hold the Bank Rate at 5.25% again in a split vote. The current bank rate is the highest since early 2008. While seven members judged that maintaining the rate at the current level was warranted, Swati Dhingra and Dave Ramsden sought a quarter-point reduction at the meeting. Dhingra and Ramsden said the Bank Rate needed to become less restrictive to enable a smooth and gradual transition in the policy stance, and to account for lags in transmission. (RTT)

China: Exports and imports return to growth, signalling demand recovery. China's exports and imports returned to growth in April after contracting in the previous month, customs data showed, signalling an encouraging improvement in demand at home and overseas in a boost to a shaky economic recovery. The data suggests a flurry of policy support measures over the past several months is gaining traction and helping to stabilise fragile investor and consumer confidence. Shipments from China grew 1.5% YoY last month, in line with the increase forecast in a Reuters poll of economists. (Reuters)

Japan: Real wages fall in March, marking two years of decline. Japan's inflation-adjusted real wages in March fell 2.5% from a year earlier, marking declines for two straight years, labour ministry data showed. The pace of declines accelerated from the previous month's 1.8% drop as the rising costs of living outpaced nominal wages, the data showed. Japan is seeing early signs of achieving a positive cycle of rising wages and inflation. Workers' earnings, however, are still lagging behind rising costs, underscoring the challenges policymakers face in getting companies to boost salaries. (Reuters)

Hong Kong: Wew home sales hit record high of USD5.4bn. New home sales in Hong Kong surged to a record high in April, as buyers rushed to the market after the government removed property curbs. The value of first-hand residential property sales reached HKD42bn (USD5.4bn or RM25.5bn) last month, more than triple the value of transactions in March, according to Ricacorp Properties Ltd. That’s the highest in data going back to 1996. The number of sales at 3,545 was also the most since 2006. This sales boom follows the removal of extra taxes in Feb, which led Hong Kong’s developers to speed up new project launches and discount properties to capture increased demand. (Bloomberg)

Markets

Scientex: To deploy large scale solar PV system at its facilities nationwide. Packaging manufacturer and property developer Scientex will be deploying a 21-megawatt peak rooftop solar photovoltaic (PV) system at its facilities nationwide. In a tie-up with clean energy expert Solarvest Holdings, Scientex said in a joint statement that it will deploy the solar PV systems across 10 key manufacturing plants nationwide and at its headquarters. Scheduled to commence in May 2024 and by Jan 2025, the project is expected to generate enough renewable energy to offset approximately 14,000 tonnes of carbon dioxide equivalent (tCO2e) annually. (SunBiz)

Pharmaniaga: Auditors raise going concern issue again as current deficit, capital deficiency widen. Pharmaniaga’s has been flagged by its independent auditors again, as its current deficit and capital deficiency for the financial year ended 31 Dec 2023 (FY2023) widened from a year ago. Messrs PricewaterhouseCoopers PLT (PwC) raised material uncertainty on Pharmaniaga, saying its audit indicated that the group and the company incurred net losses of RM78.7m and RM63.3m respectively. (The Edge)

Supermax: Buys remaining 33% stake in SHCI for RM18.96m. Supermax Corp has acquired the remaining 33% equity interest in Supermax Healthcare Canada Inc (SHCI) for RM18.96m. Supermax owns a 67% equity interest in SHCI and the remaining equity interest is owned by its executive vice-president, partner Sylvain Bergeron. The fourth-largest listed glove maker said the company had entered into a share sale agreement with Bergeron in Montreal, Canada. (SunBiz)

Salcon: Bags RM9.7m sewerage treatment plant contract. Salcon has secured a sewerage treatment plant contract worth RM9.71m from Rantau Urusan (M) SB. Salcon said Envitech SB, a 60%-owned subsidiary of Salcon Engineering, which in turn is a wholly-owned subsidiary of the company accepted the letter of award from Rantau Urusan. The 20-month contract involves the design and construction of a sewage treatment plant to cater for a population of 54,000 PE in Perak. (StarBiz)

Sunway: Sunway Velocity 3 residential development 60% taken up at launch. The property arm of Sunway, Sunway Property's newly launched Sunway Velocity 3 residential project has achieved a take-up rate of 60%, with over 400 out of 695 units snapped up during its opening weekend on May 4. As the latest addition to the integrated Sunway Velocity Kuala Lumpur, Sunway Velocity 3 features three blocks: the first phase comprises two 61- storey serviced residence blocks (Towers A and B) sited on a 3.43- acre land, with an estimated gross development value (GDV) of RM1.28bn. (The Edge)

Mah Sing: Officially launches M Zenya serviced apartment in Kepong with 92% take-up. Mah Sing Group, via its unit Star Residence SB, officially launched its latest serviced apartment development named M Zenya in Kepong, KL during the opening ceremony of its sales gallery at Sungai Mas Plaza at Jalan Ipoh. Spread across a 4.88-acre tract, the RM500m M Zenya will comprise a 38-storey tower with 619 residential units that come in four different two- to four-bedroom layouts with built-up sizes from 762 to 1,067 sq ft. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after US stocks rose Thursday to pull the S&P 500 back within 1% of its record following a rough April. The S&P 500 rose 26.41 points, or 0.5%, to 5,214.08. The Dow Jones Industrial Average gained 331.37, or 0.8%, to 39,387.76, and the Nasdaq composite added 43.51, or 0.3%, to 16,346.26. A report showing a pickup in layoffs helped to support the market. The number of workers applying for unemployment benefits rose by more last week than economists expected, though it remains relatively low compared with history. That could be a sign the economy can pull off a hoped-for balancing act of staying solid enough to avoid a bad recession, but not so strong that it puts upward pressure on inflation. Treasury yields erased earlier gains immediately after the report’s release, an indication of expectations for the Federal Reserve to deliver long-sought cuts to interest rates later this year. Across the Atlantic, indices rose in London and other markets in Europe after the Bank of England hinted it may soon cut its key interest rate from a 16-year high.

Back home, the FBM KLCI finished marginally lower today but remained above the key 1,600 level, amid mixed cues from the regional markets performance. At the closing bell, the FBM KLCI fell 0.22% or 3.53 points to 1,601.22 compared to Wednesday’s close of 1,604.75. In the region, indices were mixed. They climbed 1.2% in Hong Kong and 0.8% in Shanghai after China reported its exports rose 1.5% in April from a year earlier, while imports jumped 8.4%. The renewed growth suggests a stronger recovery in demand than earlier data had suggested.

Source: PublicInvest Research - 10 May 2024