HEADLINES

Economy

US: Majority of middle-class Americans say they struggle financially. Almost two-thirds of Americans considered middle class said they are facing economic hardship and don’t anticipate a change for the rest of their lives, according to a poll commissioned by the National True Cost of Living Coalition. By many traditional measures, the US economy is strong, with robust labor, housing and stock markets, as well as solid gross domestic product growth. But the data don’t capture the financial insecurity of millions of households who worry about their future and are unable to save, according to the group, created this year to come up with cost-ofliving tools that help gauge economic well-being. In the large poll of 2,500 adults, 65% of people who earn more than 200% of the federal poverty level — that’s at least $60,000 for a family of four, often considered middle class — said they are struggling financially. (Bloomberg)

US: Job openings fall to lowest since 2021 in broad cooldown. US job openings fell in April to the lowest level in over three years, consistent with a gradual slowdown in the labor market. Available positions decreased to 8.1m from a downwardly revised 8.4m reading in the prior month, the Bureau of Labor Statistics Job Openings and Labor Turnover Survey, known as JOLTS, showed. The vacancies figure was below all estimates in a Bloomberg survey of economists. The pullback was fairly broad, led by declines in health care and government. Openings in accommodation and food services also decreased, possibly reflecting California’s higher minimum wage requirements. Recent data indicate the labor market is cooling, but it’s been gradual through slower hiring rather than outright job cuts. (Bloomberg)

EU: ECB rate-cut expectations start to unravel before first move. Strong economic data and vocal European Central Bank hawks are pushing some analysts and investors to waver in their expectations for interest-rate cuts this year. While most economists still foresee quarterly reductions following this week’s initial move, some reckon sticky inflation, rapid wage growth and surprisingly robust euro-zone output will constrain monetary loosening. Traders, too, have pared easing bets, reinforced by Executive Board member Isabel Schnabel and Bundesbank President Joachim Nagel seeming to take July off the table, as Austria’s Robert Holzmann said two decreases in 2024 may suffice. Cautious officials fret that lowering borrowing costs at consecutive meetings could prompt markets to take that pace as their baseline. (Bloomberg)

EU: German unemployment rises more than forecast. Germany's unemployment increased more than expected in May as the economic recovery was not sufficient to bring a marked improvement in the labor market. The increase in the number of people out of work more than doubled to 25,000 in May, data from the Federal Labor Agency showed. This follows an increase of 11,000 in the previous month, which was revised up from 10,000. Unemployment was expected to rise again by 10,000 in May. The unemployment rate held steady for the sixth successive month, at an adjusted 5.9% in May, and matched economists' expectations. On an unadjusted basis, the unemployment decreased 27,000 to 2.7m in May, data showed. (RTT)

UK: Retail sales log moderate growth in May: BRC. UK retail sales posted a moderate growth in May despite a strong bank holiday weekend, data released by the British Retail Consortium revealed. Total retail sales grew 0.7% on a yearly basis compared to the 3.9% increase seen in the same period last year. Food sales gained 3.6% in three months to May, while non-food sales dropped 2.4%. "Despite a strong bank holiday weekend for retailers, minimal improvement to weather across most of May meant only a modest rebound in retail sales last month," BRC chief executive Helen Dickinson said. (RTT)

South Korea: Inflation slows in May. Consumer prices in South Korea were up just 0.1% on month in May, the Bank of Korea said. That was shy of expectations for an increase of 0.2% following the flat reading in April. On a yearly basis, consumer prices rose 2.7% - again slower than forecasts for a gain of 2.8% and down from 2.9% in the previous month. Core CPI, which excludes the volatile prices of food, was up 0.2% on month and 2.2% on year after advancing 0.2% on month and 2.3% on year a month earlier. (RTT)

Thailand: Manufacturing sector moves back to expansion - S&P Global. The manufacturing sector in Thailand bounced back up into expansion territory in May, the latest survey from S&P Global revealed with a manufacturing PMI score of 50.3. That's up from 48.6 in April and it moves above the boom-or-bust line of 50 that separates expansion from contraction. The PMI had positive contributions in May from the output, employment and suppliers' delivery times components. New orders had a negative influence for the eleventh month running, but the smallest over this period, while stocks of purchases also had a weaker negative influence. (RTT)

Markets

Datasonic: Secures five contract extensions from Home Ministry worth RM182m. Datasonic Group has secured five contract extensions from the Home Ministry, worth a total of RM181.66m. In a filing with Bursa Malaysia, the integrated information and communications technology (ICT) solutions provider said all the extensions are for a period of six months from June 1 to Nov 30 this year. For the first contract, Datasonic received an extension for the supply of MyKad, MyTentera and MyPOCA raw cards and consumables to the National Registration Department (JPN) for an additional ceiling contract value of RM27.81m. (The Edge)

Optimax: Secures licence for aesthetic services for its new outlet Neumax Clinix. Eye specialist service provider Optimax Holdings announced that it has obtained a licence from the MOH to offer aesthetic services at its new outlet, Neumax Clinix. Neumax Clinix, Optimax’s first full-fledged aesthetic clinic, offers a comprehensive range of services, including cosmetic injections, laser treatments, and skin rejuvenation therapy. Located on the ground floor of Atria Mall in Damansara Jaya, the clinic occupies 3,871 square feet, providing patients with a space for consultations and aesthetic procedures (The Edge)

Inta Bina: Gets RM111.98m residential development job from Gamuda. Inta Bina Group has accepted a letter of award from Gamuda Land (T12) SB for the proposed development of 174 units semi-detached houses, worth RM111.98m. Phase 1 will consist of 124 units of semi-detached houses, a guard house, management office and two Tenaga Nasional (TNB) substations. Meanwhile, Phase 2 will comprise 50 units of semi-detached houses. (StarBiz)

Itmax: Appointed smart parking operator at Iskandar Puteri City. ITMax System's 65%-owned subsidiary Southmax SB has accepted an appointment by the Iskandar Puteri City Council (MBIP) to be the smart parking operator of 32,025 street parking bays. The group said in a bourse filing, the appointment will be for a period of 15 years commencing June 1, 2024, to May 31, 2039. Under the terms of the agreement, the revenue from the operations will be split 70:30 between Southmax and MBIP. (StarBiz)

Kimlun: Secures RM234.27m construction job from Saujana Development. Kimlun Corp's wholly-owned subsidiary Kimlun SB has bagged a contract from Saujana Development SB for a highrise residential development in Seksyen U2 in Shah Alam valued at RM234.27m. It said in a filing with Bursa Malaysia, the construction work is expected to be completed in the 3QFY26. The project is expected to contribute positively to the earnings and net assets of Kimlun Group for the financial years during the contract period (StarBiz)

MMHE: Bags RM1.5bn OSS construction job from Petrofac. Malaysia Marine and Heavy Engineering Holdings (MMHE) has via its wholly-owned and major subsidiary, Malaysia Marine and Heavy Engineering SB, secured a RM1.5bn award to build an offshore substation (OSS) high voltage direct current (HVDC) platform consisting of topside and jacket from Petrofac International (UAE) LLC. The Subcontract scope consists of construction engineering, fabrication, mechanical completion, load out and sea fastening, and architectural works on engineering, procurement and construction (EPC) basis. (StarBiz)

MARKET UPDATE

The FBM KLCI might open within a tight range as US stocks were split among winners and losers Tuesday after a report suggested the job market is cooling, the latest signal of a slowing economy that offers both upsides and downsides for Wall Street. The S&P 500 ticked up by 0.2%, though more stocks within the index fell than rose. The Dow Jones Industrial Average rose 140 points, or 0.4%, and the Nasdaq composite added 0.2%. The action was stronger in the bond market, where Treasury yields slid after Tuesday morning’s report showed US employers were advertising fewer job openings at the end of April than economists expected. In stock markets elsewhere, India’s Sensex dropped 5.7% a day after jumping 3.4% following the country’s elections. Indices were mixed across the rest of Asia and lower across much of Europe. Back home, Bursa Malaysia ended higher, bouncing over one per cent as bargain hunting activities emerged following last week’s selloff. At the closing bell, the FBM KLCI jumped 18.72 points, or 1.2%, to 1,615.40 from Friday’s close of 1,596.68.

Source: PublicInvest Research - 5 Jun 2024