HEADLINES Economy

US: Leading economic index decreases more than expected in April. Suggesting softer economic conditions lay ahead, the Conference Board released a report showing a continued decrease by its reading on leading US economic indicators in the month of April. The Conference Board said its leading economic index fell by 0.6% in April after dipping by 0.3% in March. Economists had expected the index to decrease by another 0.3%. (RTT)

EU: Inflation steady at 2.4% as estimated. Eurozone inflation remained stable in April as initially estimated. The harmonized index of consumer prices grew 2.4% on a yearly basis, the same rate as seen in March. At the same time, core inflation that excludes prices of energy, food, alcohol and tobacco weakened to 2.7% from 2.9%. On a monthly basis, the HICP grew 0.6% and core consumer prices gained 0.7% in April. (RTT)

China: Industrial output gains strength; retail sales & investment data disappoints. China's industrial growth accelerated in April driven by robust exports but softening growth in retail sales and fixed asset investment reflects an uneven economic recovery necessitating more efforts from the part of the government to achieve the official growth target. Industrial production registered an annual increase of 6.7% after rising 4.5% in March, the National Bureau of Statistics reported. (RTT)

China: April gasoline exports fall to lowest level since July 2015 on recovering domestic demand. China's gasoline exports in April fell to the lowest level since July 2015, as domestic travel and fuel use increased in the recovering economy. April exports of gasoline stood at 400,000m tons, down 50.8% from a year earlier, General Administration of Customs data showed, and 65% below March's 1.15m tons. A growing tourist preference for short-distance travel is favouring car trips over flights and boosting domestic gasoline demand. (Reuters)

Japan: BOJ may raise rates as soon as June. The BOJ may raise its benchmark interest rate as many as three more times this year, with the next move potentially coming as early as June, given how much room there is to adjust its excessively easy settings, according to a former BOJ chief economist. (Bloomberg)

Singapore: Non-oil domestic exports fall 9.3%. Singapore's non-oil domestic exports decreased for the third straight month in April, though at a slower pace than in March, data from Enterprise Singapore showed. Non-oil domestic exports fell 9.3% YoY in April, much slower than the 20.8% plunge in the previous month. The decline was driven largely by non-electronics, including pharmaceuticals, while electronics advanced. (RTT)

Markets

ITMax System: Secures RM105.3m contract from DBKL. ITMax System has been awarded a RM105.3m Variation Order (VO) from the Kuala Lumpur City Hall (DBKL). The VO includes an extension of phase 1 of the video surveillance and Video Messaging Signages (VMS) integrated transport information system (ITIS) contract. Originally set to end in 2026, phase 1 of the ITIS contract is now extended until 2029. ITMAX is primarily involved in the supply, installation and provision of public space networked systems. (Bernama)

Malayan Flour Mills: Earmarks RM300m capex for FY24. Malayan Flour Mills (MFM) has earmarked RM300mil for capital expenditure (capex) in its financial year 31 Dec, 2024 (FY24) to strengthen its growth engines. MFM announced that Dindings Tyson SB (DTSB), which oversees the poultry integration segment (PI), plans to invest up to RM200m in capital expenditures for FY24. The funds will be used to upgrade and expand breeder farms and further automate the poultry processing plant in Sitiawan, Malaysia. Seeing better capacity utilisation in its flour milling operations in Malaysia and Vietnam, MFM plans to invest RM100mil in FY24. (The Star)

NationGate Holdings: Secures SC nod for transfer to Main Market. NationGate Holdings has secured approval from the Securities Commission Malaysia (SC) for its transfer to the Main Market of Bursa Malaysia. NationGate said the approval was granted under an "accelerated transfer process". The group previously said that the proposed transfer is expected to be completed in the first half of 2024. As of May 17, 2024, NationGate has an issued share capital of RM304.54m, comprising 2.07 bn shares. As at May 3, 2024, approximately 32.88% of the share capital of the company is held by 4,819 public shareholders holding not less than 100 shares each. (The Edge)

GIIB Holdings: Affirms financial statements integrity amid former director's forgery charges. GIIB Holdings announced that its interim financial statements for the period ended on 31 March, 2023, issued on May 29, 2023, are consistent with the interim financial statements for the same period, which were approved by the board through formal processes. The company reiterated that both its audit and risk management committee and the board of directors had confirmed the legitimacy of these financial statements. (Bernama)

PIE Industrial: Posts 31% drop in 1Q earnings as integrated circuit shortages hit demand. PIE Industrial's net profit for the first quarter ended 31 March, 2024 (1QFY2024) dropped 31.24% to RM9.7m, from RM14.11m a year earlier, due to reduced demand caused by shortages of major integrated circuits. EPS stood at 2.55 sen per share, from 3.67 sen per share a year ago. Quarterly revenue fell 28.06% to RM239.18 m, from RM332.45 m recorded for 1QFY2023. Despite reporting lower quarterly earnings, the company is positive on its outlook, after it secured a new customer specialising in servers and switches last month. (The Edge)

Ho Hup Construction: Property development unit applies for judicial management. Ho Hup Construction Company said its 52%-owned unit Golden Wave SB GWSB) has applied with the High Court to be placed under judicial management. Judicial management is a corporate rescue mechanism where companies seek the appointment of a judicial manager when they are unable to pay their debts, creditors or directors. (The Edge)

MARKET UPDATE

The FBM KLCI might open higher today after the Dow Jones Industrial Average finished a day above the 40,000 level for the first time on Friday as US stock indices drifted around their records while closing out their latest winning week. The Dow rose 134.21 points, or 0.3%, to 40,003.59, a day after briefly topping the 40,000 level for the first time. It and other indexes on Wall Street have been climbing since the autumn of 2022 as the U.S. economy and corporate profits have managed to hold up despite high inflation, the punishing effects of high interest rates and worries about a recession that seemed inevitable but hasn’t arrived. The S&P 500, which is the much more important index for Wall Street and most retirement savers, added 6.17 points, or 0.1%, to 5,303.27. It finished just 0.1% shy of its record set on Wednesday and closed out a fourth straight week of gains. The Nasdaq composite slipped 12.35 points, or 0.1%, to 16,685.97.

In stock markets abroad, indices jumped 1% in Shanghai and 0.9% in Hong Kong after China’s central bank announced moves to bolster its struggling property market. It reduced required down payments for housing loans and cut interest rates for first and second home purchases, among other moves. Indices fell in Seoul, Tokyo and across much of Europe. Back home, shares on Bursa Malaysia closed in an upbeat mode last Friday as investors cheered the nation’s first-quarter gross domestic product (GDP) growth, which beats consensus estimates. At 5pm, the FBM KLCI settled 5.51 points higher at 1,616.62 from yesterday’s closing of 1,611.11.

Source: PublicInvest Research - 20 May 2024