HEADLINES

Economy

US: Pending home sales suffer largest drop in three years. Contract signings for US home purchases fell by the most in three years in April and the overall level of activity was the lowest since the onset of the Covid-19 pandemic in the spring of 2020, as high interest rates keep a lid on the housing market. Pending home sales index fell 7.7% in April to 72.3 from an upwardly revised 78.3 reading in March. The drop was the largest since Feb 2021 and the index level was the lowest since the record-low reading of 71.8 in April of 2020. The index is meant to be predictive of completed home sales transactions one to two months later. (Reuters)

US: GDP growth slows more than previously estimated in Q1. Revised data released by the Commerce Department showed US economic growth slowed by more than previously estimated in the 1QFY24. The Commerce Department said GDP climbed by 1.3% in the first quarter compared to the previously reported 1.6% jump. The downwardly revised increase, which was in line with economist estimates, compares to the 3.4% surge in GDP in the 4QFY23. (RTT)

UK: Car production falls for second month. UK car production declined for the second straight month in April, reflecting factory adjustments in preparation for next generation models and their electrified powertrains. Car production declined 7.0% on a yearly basis to 61,820 units in April, data showed. Car manufacturing output was down 0.8% on 2023 volumes in the YTD period. (RTT)

EU: Sweden economic confidence falls in May. Sweden's economic confidence dropped slightly in May after showing some resilience in the previous three months, survey results published by the National Institute of Economic Research showed. The economic tendency index fell to 94.0 in May from 94.9 in the previous month. The latest figure continued to show weaker sentiment than normal in the Swedish economy. (RTT)

EU: Irish construction output plunges 12.7% in Q1. Ireland's construction output continued to decline in the first quarter, and at a deeper pace, figures from the Central Statistics Office showed. Construction output fell 12.7% annually in the first quarter, following a 6.2% decrease in the final quarter of 2023. (RTT)

China: May factory activity likely expanded at steady pace, recovery still fragile. China's manufacturing activity in May likely grew at a similar pace to the previous month when it barely managed to stay expansionary, a Reuters poll showed, reinforcing the fragile nature of the recovery in the world's No.2 economy. The official PMI was forecast at 50.4 in May, unchanged from April, according to the median forecast of 33 economists in the poll. (Reuters)

Taiwan: Raises 2024 GDP on stronger exports, domestic consumption. Taiwan’s trade-reliant economy is expected to grow at a faster pace in 2024 than previously forecast, owing to high demand for artificial intelligence applications abroad and solid consumption at home. Taiwan is a key link in the global technology supply chain for companies such as Apple and Nvidia, and is home to the world’s largest contract chipmaker, TSMC. Taiwan’s GDP this year is now expected to be 3.94% higher than last year, the Directorate General of Budget, Accounting and Statistics said, revising upward the 3.43% forecast it issued in Feb. (BTimes)

India: Home prices to rise steadily, affordable housing supply to lag demand. Average home prices in India are expected to rise steadily over the next few years as the country's rich drive-up demand for luxury housing. Home purchases are increasingly driven by a select few in a country of more than 1.4bn people, mostly those unaffected by higher interest rates. (Reuters)

Markets

Tropicana: To launch properties with estimated RM4bn GDV. Tropicana Corp plans to roll out exciting residential or commercial developments across Malaysia, with an estimated GDV of RM4bn. “We expect our financial position to strengthen with the upcoming handover of six vacant possessions this year from Tropicana Aman, Tropicana Miyu, Tropicana Metropark, and Tropicana Uplands. We are also enhancing our digital and customer loyalty segment, offering more benefits and rewards to our purchasers and business partners,” the developer said in a statement. (StarBiz)

Dutch Lady: RM540m factory set to begin ops. Dutch Lady Milk Industries’ (DLMI) state-of-the-art RM540m manufacturing facility here is set to be fully operational by July, says its MD Ramjeet Kaur Virik. The plant, located on a 13.2ha site at the Bandar Enstek halal hub and which is thrice the size of its present facility in Petaling Jaya, will also double the existing production capacity once it is fully commissioned. Its inauguration was also held in conjunction with World Milk Day, which falls on 1 June. (StarBiz)

RGB International: Bags RM382m contract from Philippine state casino regulator. Electronic gaming machine maker RGB International has secured a contract worth USD81.3m (RM383m) from the Philippines’ state-owned casino regulator Philippine Amusement and Gaming Corp (Pagcor). RGB, whose share price has climbed 54% YTD, said the contract was awarded to its wholly owned unit RGB (Macau) Ltd to supply and deliver slot machine equipment for Casino Filipino Branches. The project involves supplying 1,968 electronic gaming machines (EGMs) along with their related accessories, light-emitting diode (LED) signage and displays. (The Edge)

HSS Engineers: Land RM15m contract for Phnom Penh-Bavet Expressway project. HSS Engineers’ wholly owned subsidiary HSS Engineering SB has entered into a contract agreement with Cambodia’s ministry of public works and transport, Kingdom to provide consultant’s services for the assignment of contract engineer for the Phnom Penh-Bavet Expressway project. It said the contract was estimated to run from June 2024 to June 2028. It said HSSE’s scope of services were to provide technical support and consultancy services to the client on all technical aspects related to the design. (The Malaysian Reserve)

Mah Sing: Enters data centre market, strikes JV with Bridge Data Centre. Property developer Mah Sing Group is joining forces with Bridge Data Centres (BDC) to develop data centre facilities and infrastructure in Bangi, Selangor, a plank to diversify its income stream. With 150 acres of land earmarked for future expansion, Mah Sing said it aimed to establish a data centre hub with a capacity of up to 500MW. (The Malaysian Reserve)

Genting: Posts whopping RM589m net profit for 1Q, six times higher YoY. Genting has just completed a stellar quarter through March 2024 with its net profit jumping six times YoY to RM588.9m on a revenue of RM7.4bn. It said the higher profit for 1Q ended 31 March 2024 mainly due to higher adjusted earnings before interest, taxes, depreciation, and amortisation (EBITDA), coupled with lower net finance cost, lower share of losses in joint ventures and associates. (The Malaysian Reserve)

MARKET UPDATE

The FBM KLCI might open lower today after the S&P 500 sank 31.47 points, or 0.6%, to 5,235.48, even though the majority of stocks within the index and across Wall Street were higher. The Dow Jones Industrial Average dropped 330.06, or 0.9%, to 38,111.48, and the Nasdaq composite lost 183.50, or 1.1%, to 16,737.08. Salesforce, which helps businesses manage their customers, lost nearly a fifth of its value after reporting weaker revenue for the latest quarter than analysts expected. The cloudbased software company also gave forecasts for revenue in the current quarter and fiscal year that fell short of Wall Street’s. Shares tumbled 19.7%. Yields fell Thursday after a couple reports showed the US economy isn’t quite as strong as expected. The hope on Wall Street is that the economy can cool down, but not by too much, so that the Federal Reserve can hit a precise landing where it gets high inflation under control without causing a bad recession. In stock markets abroad, indices rose modestly in much of Europe after struggling in Asia. Back home, Bursa Malaysia recouped some of its earlier losses to settle marginally lower, in line with the weaker regional market performance, ahead of the release of key US economic data. At the closing bell, the FBM KLCI slipped 1.09 points, or 0.06 %, to 1,604.26 from yesterday’s close of 1,605.35. Regionally, Japan’s Nikkei 225 slid 1.30% to 38,054.13, Hong Kong’s Hang Seng Index slipped 1.34% to 18,230.19, South Korea’s Kospi shed 1.56% to 2,635.44, and Shanghai’s SSE Composite Index down 0.62% to 3,091.68.

Source: PublicInvest Research - 31 May 2024